Three Federal Government initiatives to boost an age pensioner’s income have passed the House of Representatives and, if endorsed by the Senate, will come into effect on 1 July this year.
YourLifeChoices reported in depth on all these measures from the Budget Lockup in May 2018.
But to recap, the Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018 introduced on 13 February by Paul Fletcher, Minister for Families and Social Services, includes extra dollars through the pension work bonus for those still working, widened access to ‘pension home loans’ and new means testing rules.
Mr Fletcher states that this bill, costing $258.6 million over the forward estimates, will mean a better deal for 90,000 older Australians.
So how, specifically, will you be better off?
Increasing and extending the Pension Work Bonus
Older workers who receive an Age Pension, but who are still working will, from 1 July, be able to earn an extra $300 a fortnight without affecting their Age Pension entitlements (the current work bonus allows for a $250 per fortnight exemption). Those who are self-employed will be eligible for the first time.
Expanding the Pension Loans Scheme
Currently the Pension Loans Scheme excludes those on a full Age Pension and self-funded retirees. To date, the uptake has been low, but the new legislation will see the Pension Loans Scheme widened to include all eligible Australians of pension age who own their own home. Couples and singles will be able to borrow significant amounts against this asset. The combination of a pension payment and a loan payment will be up to 150 per cent of the full pension, or $1374.45 a fortnight for a single person of pension age. Mr Fletcher notes the convenience of this single payment, combining pension and loan, will afford older Australians increased income “rather than needing to enter into a reverse mortgage through a bank”.
Changes to the means test
The legislated changes to the means test will assess newer financial products, including pooled lifetime retirement income streams. “The new rules will make sure that these products are fairly and consistently assessed,” Mr Fletcher said.
One more thing …
On a somewhat lighter note, those pensioners who reside overseas and are aged over 80 will now need to prove to Centrelink that they are still alive. How will you be required to do this, you wonder? Breath test? A shining light to the eyeball? Deemed movement within a 24-hour period? No, you will need to produce a “proof of life certificate”, obtained by visiting an Australian embassy or consulate every two years to register that you are, indeed, still alive (otherwise you couldn’t have gotten there) and thus entitled to continue receiving payments.
At last some good news? Or not? How do you view these legislative changes? Will your situation be better or worse?
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