Government update

YourLifeChoices keeps you up to date with government changes that could affect your retirement.

Stimulus payments Pensioners have been allocated cash payments as part of the federal government’s stimulus packages in the wake of the coronavirus pandemic. In the first package, about 2.5 million pensioners, 680,000 JobSeeker – or Newstart – recipients and all those receiving a Carer’s Allowance were eligible to receive $750 from 31 March. In a second package, an additional $750 is to be made automatically to about five million Australians, including those receiving the Age Pension, a Carer’s Allowance or family tax benefit and Commonwealth senior card-holders, from 13 July. Age Pension payment rates On 20 March, the Age Pension payment rates were increased and income and asset thresholds changed. This means some people who were previously ineligible for a pension or a concession card may now be eligible.

Maximum fortnightly Age Pension payment rates Previous Current Increase Single Base $850.40 $860.60 $10.20 Supplement $68.90 $69.60 $0.70 Energy Supplement $14.10 $14.10 — Total $933.40 $944.30 $10.90 Couple (each) Base $641.00 $648.70 $7.70 Supplement $51.90 $52.50 $0.60 Energy Supplement $10.60 $10.60 — Total $703.50 $711.80 $8.30

Pension Disqualifying Income Limits from 20 March Situation For full pension For part /allowance pension (pf) (per fortnight) Single up to $174 less than $2062.60 Couple (combined) up to $308 less than $3155.20 Illness separated (couple combined) up to $308 less than $4085.20

Centrelink asset test limits for Allowances and full Age Pensions from 1 July 2019 Situation Homeowners Non-homeowners Single $263,250 $473,750 Couple (combined) $394,500 $605,000 Illness separated (couple combined) $394,500 $605,000 One partner eligible (couple combined) $394,500 $605,000

Deeming rates Centrelink determines Age Pension payments and eligibility by assessing income and assets under each of the means tests. Income deemed by Centrelink to be received from financial assets is taken into account. In response to a series of cuts to official interest rates by the Reserve Bank of Australia and the government’s response to the coronavirus pandemic, deeming rates have been lowered twice in the past month. From May, the lower deeming rate will be 0.25 per cent for financial investments up to $51,800 for single pensioners and $86,200 for pensioner couples, and the upper deeming rate will be 2.25 per cent for balances over those amounts.

Family situation

Single

Allowee couple - per person (1) Pensioner couple - combined (2) Assets threshold $0 – $51,800 Above $51,800 $0 – $43,100 Above $43,100 $0 – $86,200 Above $86,200 Rate of deemed income 0.25% 2.25% 0.25% 2.25% 0.25% 2.25%

Centrelink changes In other news affecting Centrelink customers, income streams including Newstart, Sickness, Wife Pension and Bereavement Allowances have been axed, with the majority of those welfare recipients being transferred onto JobSeeker payments. The JobSeeker payment became the main income support from 20 March for eligible Australians who are at least 22 years of age but under Age Pension age. A spokesperson for Services Australia – formerly known as the Department of Human Services – said the changes were “part of the government’s commitment to making Australia’s welfare system simpler and fairer”. For more information, go to ServicesAustralia. For detailed information on the Age Pension, pension eligibility, income and assets test, Rent Assistance, the work bonus and much more, go to YourLifeChoices’ dedicated information site.

Retirement Income Review Treasury is reviewing all aspects of retirement income in Australia. A public consultation paper was released in November 2019, submissions from key bodies including YourLifeChoices were submitted in February and a final report is expected by June 2020.