The Carbon Tax: What’s in it for self-funded retirees

If the treasury modeling is correct, and prices rise by 0.7 percent, with a supplement of 1.7 percent you should have an extra ten dollars each week, starting July 2012. But if your energy bills are higher than 2.5 per cent of your income, you may find this gain is eaten away. How much better off you will be really depends upon how much of your income goes on power.

What will you receive?
A one-off lump sum advance
As with Age Pensioners, Australian self-funded retirees who hold a Commonwealth Seniors Health Card (CSHC) will receive assistance in two ways. Commonwealth Seniors Health Card holders who do not receive a Seniors Supplement will need to provide their bank account details and elect to receive the Seniors Supplement to get the one-off Clean Energy Advance payment. To check or update your bank details with Centrelink, go to Online Services by visiting www.centrelink.gov.au or call the Centrelink Seniors Line on 13 2300.


Firstly, as an upfront payment, called a Clean Energy Advance, delivered during May and June 2012.
This is a one-off payment of $250 for singles and $190 for each eligible couple member, to those holding the CSHC.
It is designed to assist with extra costs which will be applied by the top-500 polluting companies from 1 July 2012. It is a supplement to cover the costs from 1 July 2012 to March 2013 when the Seniors Supplement will commence.
You do not have to apply for this advance – you will receive it automatically if your contact details are up to date.
If you are a self-funded retiree and do NOT hold a CSHC, how can you find out if you are eligible to receive one and apply?
An ongoing Seniors Supplement
The second benefit is a Seniors Supplement as mentioned above. This is assistance which equals a 1.7 per cent increase on Age Pension rates - $338 for singles and $255 for each eligible member of a couple – per year. This increase is called a Clean Energy Supplement and will be paid quarterly from 20 March 2013. It will be indexed for CPI so it stays in line with general price increases.
As with the advance, you do not have to apply for this increase – you will receive it automatically if your contact details are up to date.
Veterans will receive assistance through service pensions and other payments such as disability pensions and war widow/widower pensions.
Tax cuts
All taxpayers earning up to $80,000 will receive a tax cut. The tax-free threshold will move from $6000 to $18200. The Low Income Tax Offset (LITO) is reduced to $445 and the Senior Australians Tax Offset (SATO) will also be modified, and renamed the Seniors and Pensioners Tax Offset. Further tax cuts will follow in 2015-6.

Additional payments
For those with higher energy bills due to a reliance on medical equipment, an annual Essential Medical Equipment Payment of $140 can also be claimed. This will be paid through Centrelink of the Department of Veterans’ Affairs and can be claimed by the recipient of the DSP or their carer if that is who incurs the cost.
To be eligible, you must meet the relevant medical criteria and hold a relevant concession card.
This payment must be claimed for and will not automatically be paid.

What extra costs can you expect?
Prices are expected to rise by about 0.7 per cent, starting July 1 2012. For those households on about $40000 this is about $298 per year. This is to be covered by the $338 supplement (and advance for the first nine months) and tax offsets of about $500.

Will you be better off?
If the treasury modeling is correct, and prices rise by 0.7 percent, with a supplement of 1.7 percent you should have an extra ten dollars each week, starting July 2012.
But if your energy bills are higher than 2.5 per cent of your income, you may find this gain is eaten away. How much better off you will be really depends upon how much of your income goes on power.
What no government or financial modeller can predict is variables such as floods or drought and external economic factors, such as oil prices, wars and terrorist attacks, which all can have a huge affect on the prices of goods and services in Australia. The fact that the supplement is indexed for CPI should go some way toward nullifying major price hikes.

 


To find more about your individual situation, visit the Federal Government’s online estimator at www.cleanenergyfuture.gov.au.

Or ask us your question – as always, we are here to help.
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    COMMENTS

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    rosemaryjune
    11th Jul 2011
    5:00pm
    Does this mean that self-funded retirees that don't have a Card (I am 59) but are living on super (same amount as Aged Pension) get nothing
    herbs48
    11th Jul 2011
    5:20pm
    What's in it for a self funded retirees aged over 60 with low income Health Care cards?
    We pay no Tax so will not benefit from any Tax cuts.
    PatrickRM
    11th Jul 2011
    5:38pm
    My wife and I are in the same boat as 'rosemaryjune'. I'm 64 (not 65 till July 2012 when I might get a part pension), my wife is 63 (may be entitled to part pension in August 2012). We are living on some savings and super but not generating enough income to incur tax. I guess we'll get nothing AGAIN! We also missed out on the handouts duruing the early days of the GFC for similar reasons.
    ozimarco
    11th Jul 2011
    8:45pm
    Looks like we won't get any compensation, either. I'm 63, my wife is 59. We both have low income health care cards, have no income apart from some interest and are living on savings before we start drawing on our super in about a year to eighteen months from now. Looks like we'll cop the full brunt of the carbon tax in higher prices for utilities, goods and services.
    eucu
    14th Jul 2011
    2:15pm
    The NSW State Super "defined benifits" Scheme,covering most government employees,was structured for retirement at 60 years of age. Women could contribute more and retire at 55 years of age.As one condition for the Commonwealth Seniors Health Card is to be 65 years of age, these ex-government employees are in a 5 year black hole.
    Lesley
    15th Jul 2011
    5:10pm
    It appears that I'm in the same boat as the others. I am 62 and have been retired for 3 years. I am single and have a health care card, but not a Commonwealth Seniors Health Card. I am too old to be required to pay tax, but cannot access the old age pension until I turn 65. My super pension is only $24,000. I have emailed both my local MP and the Prime Minister but so far have received no reply. I support the carbon tax, but feel that I and others in similar circumstances should be compensated.
    taylah
    8th Nov 2011
    11:04pm
    Its the same old story again - SFRetirees living on little more than the pension look like missing out again????? Being frugal has been a disaster for us really. Should have gone on a world cruise and ended on the pension. What a futile tax anyhow Australian population say same as Florida - and the entire US are basically doing nothing except talking the talk. We are the CLEVER country??????
    Nabshe
    19th Jun 2012
    5:40pm
    Ok - here's what I found out from Combet's Climate Change people - if you are a self funded retiree who is under 65 you can apply for the low income rebate of $300 from Centrelink. However, there is a catch, your yearly income (including your tax free allocated pension and income from other sources such as interest in term deposits, shares ect) must not be more than $45,000. The other catch is that you have to bare your financial soul to prove your claim.

    My husband and I are self funded retirees who are 63 and 61 - we have an allocated pension of 36,000 from our retirement fund, plus interest generated from our term deposits. It pushes us over the 45,000 cutoff, so we are going to be slugged with Gillard's carbon tax to the tune of $510 in the FIRST year alone. Needless to say we are NOT very happy campers - especially when you realise that the self funded retiree couple lionised in the government flashy brochure gets fully compensated and are allowed an income of $80,000! This couple is 65 and has the coveted CSHC. Seems hardly fair when one group of retirees can earn $80,000 and get the compensation and another group has to go cap in hand to Centrelink but gets cut off at $45,000!

    So in our case we get nothing, nada, zip, zilch.....it will be no surprise to this government that we won't be voting for Labor in the foreseeable future.
    Abby
    5th Jul 2012
    2:20am
    Looks as if the politicians are covered for the Carbon Tax Price hike in the cost of living
    "Pollie pay raise normal process: Swan"
    http://www.news.com.au/breaking-news/national/pollie-pay-raise-normal-process-swan/story-e6frfku9-1226416841140
    Gillard's salary will jump by $14,430 - that should keep her warm in winter. I wonder how many pensioners got a carbon tax offset like that?

    I suppose the independent remuneration tribunal thought the pollies deserve that seeing the amount of money they will squeeze from the average citizen as a result of the carbon tax slush fund.


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