Older Australians are urged to reassess their finances at least once a year. That’s especially important at three key calendar dates and given the plethora of changes to retirement income in recent months.
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The Age Pension is indexed twice a year on 20 March and 20 September.
The Age Pension plus the Disability Support Pension and the Carer Payment are indexed according to whichever is highest out of the Consumer Price Index (CPI) and the Pension and Beneficiary Living Cost Index (PBLCI). The payments are then also benchmarked against Male Total Average Weekly Earnings to make sure they keep up with wages.
The full Age Pension, with supplements, is $1026.50 per fortnight for singles and $773.80 per fortnight for each member of a couple.
Also on 20 March, the pension assets and income limits will be indexed. These are the thresholds above which you cannot qualify for a pension.
Commonwealth Rent Assistance is also indexed in March. Both the maximum rate and the rent threshold you must pay before you’re eligible are adjusted based on the CPI.
Finally, the Commonwealth Rent Assistance is also indexed in March. Both the maximum rate and the rent threshold you must pay before you’re eligible are always adjusted based on the CPI.
In July, the assets and income limits for a full rate pension will be indexed. This happens only once a year.
Currently, a pensioner homeowner couple can have $419,000 (excluding their home) before it affects their rate of payment, while a single homeowner can have $280,000 in assets.
For non-homeowners, the thresholds are $643,500 for couples and $504,500 for singles.
The disqualifying asset thresholds also changed on 1 July and increases the number of retirees who may become eligible to receive a pension.
The asset thresholds for eligible couple homeowners is $915,500 and for non-homeowner couples $1,140,000. For eligible single homeowners, the threshold is $609,250 and for single non-homeowners $833,750.
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Age Pension
A new Centrelink rule came into effect on 1 January making it easier for older Australians to work.
Under the new rule, if your if your employment income goes over the cut-off point for more than six fortnights in a row, Services Australia can now temporarily suspend your Age Pension payment rather than cutting it off completely and forcing people to reapply.
Similarly, Pensioner Concession Card holders are now able to retain benefits for two years if support payments are suspended due to the income test.
Commonwealth Seniors Health Card
The income test threshold for the CSHC has increased to $90,000 for singles (up from $57,761) and to $144,000 for couples (up from $92,416).
The card gives older Australians access to government concessions on medical and pharmaceutical costs. They may also be eligible for state, territory and local government savings such as discounted rates, electricity and gas bills, ambulance, dental, eye care, recreation and public transport.
Read: When do you have to start withdrawing your super?
The cards are available to Australian residents of pension age who are not already receiving a pension and have an adjusted taxable income under the threshold.
There is no assets test for the card.
Deeming rates
Deeming rate thresholds increased last July – to $93,600 for eligible couples (up by $4600) and by $2800 for eligible singles (a $2800 increase). Deeming has been frozen until 2024.
Work Bonus
The Work Bonus allows pensioners to earn more income before it affects their Age Pension entitlements. The first $300 of fortnightly income from work is not assessed and is not counted under the pension income test.
In September, Prime Minister Anthony Albanese announced a temporary increase to the Work Bonus Income Bank maximum by $4000 to $11,800. The measure was to remain in place only for the 2022–23 financial year, however an extension will take it to the end of 2023.
Superannuation
The superannuation work test for retirees was removed last July.
Previously, retirees aged 67 to 75 must have worked at least 40 hours within 30 consecutive days before their super fund could accept any voluntary contributions.
That changed with the government recognising that many retirees missed out on a chunk of compulsory superannuation when it was introduced in 1992 and removing the work test allows them to continue to top up their balances.
The $1.7 million cap on lifetime superannuation contributions, concessional and non-concessional caps, continues to apply.
For more information, go to the Australian Tax Office.
Read: Why cost-of-living pressures bite pensioners the hardest
Super guarantee extended: Since last July, more employees are eligible for the super guarantee (SG) – the minimum amount employers must pay to their workers.
The $450 per month minimum wage threshold for super payments was removed.
Super payments: The SG increased from 10 per cent to 10.5 per cent on 1 July and will increase a further 0.5 per cent each year until it reaches 12 per cent in 2025.
Downsizer changes: Australians aged 55-plus are able to make a $300,000 non-concessional (after tax) downsizer contribution to super so long as they are eligible. Previously, contributions could be paid only by those aged 60-plus.
To make a downsizer contribution the property being sold must be the family home (main residence) and must be eligible for the main residence exemption for capital gains tax (CGT). The property must be in Australia and cannot be a caravan, houseboat or other mobile home.
Read: Is it possible to receive two pensions?
Bring forward rule: Eligibility to make non-concessional contributions under the bring-forward rules were extended from those aged 67 at the start of the financial year to those aged under 75 without having to meet the work test.
Minimum drawdown rates: Temporary minimum drawdown rates continue until 30 June 2023. The 50 per cent reduction started in March 2020 in response to the impact of COVID.
Cheaper medication
The concessional co-payment for Pharmaceutical Benefits Scheme (PBS) scripts increased by 50 cents from $6.80 to $7.30 on 1 January.
The PBS safety net threshold for concession card holders was lowered to $244.80 from $262.80. Concession card holders receive their PBS medicines free when they reach the lowered threshold.
Do you review your finances at least every year? Do you have any tips for other retirees? Let us know in the comments section below.