Government update

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

Support payments The third and fourth one-off Economic Support Payments of $250 will be made to eligible Australians from November 2020 and February 2021. The payments aim to provide financial support for age and disability pensioners, veterans, people on carer payments and family tax benefit recipients. Anyone eligible for a Commonwealth Seniors Health Card (CSHC) and Pensioner Concession Card (PCC) will also receive the payment, which will be paid into around five million recipients’ bank accounts. Check if you are eligible here.

Age Pension rates The twice-yearly indexation of the Age Pension is due to occur in March. The rates were left on hold in September due to a drop in the consumer price index as the nation continued to battle the economic impact of the coronavirus.

Super changes, in case you missed them The following changes to superannuation came into effect on 1 July 2020. Super funds must allow for portability of super and allow members to bring their own super funds to new jobs to prevent people accumulating funds and paying multiple sets of fees. The government will be monitoring and taking action against funds that are underperforming. Until June this year, super members aged 65 and 66 were unable to contribute to super unless they could prove they were working at least 40 hours over 30 consecutive days. A change on 1 July means those members can continue to put up to $25,000 into their retirement savings as a concessional contribution, or $100,000 as a non-concessional contribution. The extension in July of the Bring Forward Rule allows retirees aged 65 and 66 to make up to three years’ worth of voluntary after-tax (nonconcessional) contributions to their super, to a maximum of $300,000, as long as no additional after-tax contributions are made for two years following. The Bring Forward Rule lasts for five years and then expires. Super members with total balances of less than $500,000 will be able to carry forward their unused concessional cap amounts from 1 July 2018. The age limit for receiving spouse contributions to super has been lifted from age 69 to 74. This means that a person can now keep making voluntary payments to their partner’s super until that person turns 74. The work test must be met prior to the spouse contributions being made to the fund. In the 2020 Federal Budget, the government announced it would create a new online comparison tool called YourSuper, which would rank funds by fees and returns.

Royal commission The Royal Commission into Aged Care Quality and Safety is due to hand down its final report in February. It has already concluded that the aged care system fails to meet the needs of its older, vulnerable, citizens. You can download a full list of its recommendations to date here.

Retirement Income Review The Retirement Income Review was handed to Treasury in late July but a government response is yet to be made and no date has been given for its release. Superannuation Minister Jane Hume says she has read the 650-page document.