When it comes to the federal budget, the media often focus on providing summaries of the impact to families and small business. In contrast, the impact to pensioners tends to get less attention. So, we’ve done a quick run down of what we think are the most relevant parts for pensioners.
With the announcement of the 2013-14 Budget, the federal government declared a commitment of $127 million aimed at improving the wellbeing of senior Australians. Informed by the Advisory Panel on Positive Ageing, changes directly affecting senior Australians include the following.
Downsizing of homes
Housing was identified as a primary challenge of our ageing population – $112.4 million has been allocated towards assisting senior Australians in downsizing their homes to more suitable accommodation, without affecting their pension payments.
Currently, the Age Pension means test is not affected by the value of a senior Australian’s home. If, however, the home is sold, any cash assets can be considered and can result in a reduction of pension payments.
From 1 July 2014, pensioners who have owned their home for 25 years or more and decide to downsize will be able to invest surplus earnings (capped at $200,000) into a special account. This amount and any interest earned will be exempt from the Age Pension means test (for up to 10 years). Conditions to consider:
- At least 80 per cent of the earnings from the sale must be deposited
- This money will be exempt provided no withdrawals are made
- Those moving into granny flats or retirement villages can also benefit
- Those moving into residential aged-care facilities will not be eligible
- The trial will be closed to new customers from 1 July 2017
The government also announced an extension of the Broadband for Seniors initiative. An additional $9.9 million to be invested over four years will result in the establishment of further Broadband for Seniors kiosks, offering internet services for older Australians.
Andrew Fisher Applied Policy Institute
A new $4.6 million institute for ageing will be established to examine support options for an ageing population. Challenges and opportunities relating to demographic changes, infrastructure and health and wellbeing will be investigated.
Increase of services
With the commencement of the $3.7 billion 10-year plan announced in 2012, the Living Longer Living Better package will commence with a focus on in-home care. In addition, a $660 million investment over five years aims to encourage aged care providers to invest in residential care facilities.
Improvement of services
From 1 July 2013, the government will offer a new supplement to aged care service employers who agree to minimum wage increases for their workers. This is aimed at decreasing workplace pressures and increasing the quality of services by ensuring a skilled workforce.
In order to offer older Australians greater support when making decisions about their future care, the My Aged Care website will launch this year. The website, as well as a new call centre, will offer information about available services for seniors and their families.
For further information regarding the 2013-14 Federal Budget and how it may affect you, be sure to visit www.budget.gov.au.