The 2018-19 Budget includes a big increase in the number of aged Care Home Care packages, to enable older people to receive increased services in their home rather than in residential aged care.
It also includes a number of initiatives designed to encourage older people to remain engaged in the workforce, including changes aimed at older small business owners.
The Budget provides $1.6 billion to support 14,000 additional high level home care packages by 2021–22. This adds to the 6,000 places the Government has provided since the last Budget.
Pension Work Bonus
Expanding the Pension Work Bonus. Age Pensioners will be able to earn up to $300 each fortnight, which is an additional $50 each fortnight; without reducing their pension payments, that is an extra $1,300 each year. For the first time, older Australians who are self employed will be able to benefit from accessing the Work Bonus, so they too can earn up to $300 each fortnight without reducing their pension; that is an extra $7,800 each year. The change will cost the Budget $227.4 million over the forward estimates and will support participation by improving age pensioners’ labour market incentives.
Pension Loans Scheme
The little-utilised Pension Loans Scheme is being expanded so eligible retirees can borrow a maximum of 150 per cent of the age pension. The loan is paid fortnightly, is tax-free and attracts compound interest of 5.25 per cent on the outstanding balance. Eligibility for the scheme is being expanded from pensioners and part-pensioners to include all people over Age Pension age at a cost to the Budget of $11.0 million. The change will enable Australians to use the equity in their homes to increase their incomes. Full rate pensioners will be able to support their income by up to $11,799 (singles) or $17,787 (couples) each year by unlocking the equity in their home
More Choices for a Longer Life Package
The Government is delivering its More Choices for a Longer Life Package which maximises the opportunities that a longer life brings. It includes measures which support Australians to be prepared to live a healthy, independent, connected and safe life. Retirement savings will be enhanced by the one year work test exemption, allowing recent retirees to make voluntary superannuation contributions for a year after they are no longer working.
The Government is making it easier for people to navigate the aged care system and access the care that suits them. This includes $61.7 million to improve the My Aged Care website and $14.8 million to streamline the assessment process for aged care services.
The Government is investing in the health of older Australians by providing: $82.5 million for mental health services for people in residential aged care facilities; $20 million to pilot services for older Australians to help them remain connected to their communities; and $22.9 million to boost the physical activity of older Australians.
Other changes include:
• clarifying the Age Pension treatment of innovative income stream products, and introducing a retirement income covenant for superannuation trustees to formulate a retirement strategy for members and offer a wider variety of products. Retirees will be assisted in making decisions and comparing retirement income products through enhanced disclosure requirements on providers
Reskilling older workers
The Government will provide up to $10,000 in Restart wage subsidies for employing Australians aged 50 and over. The Skills and Training incentive will provide up to $2,000 to fund up-skilling opportunities for mature aged workers identified as being at risk.
Despite widespread calls for its increase, including from business, the Budget contains no change to the Newstart rate.
Disclaimer: This article contains general information only and is not intended to constitute financial product advice. Any information provided or conclusions made, whether express or implied, do not take into account the investment objectives, financial situation and particular needs of an investor. It should not be relied upon as a substitute for professional advice.