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.
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.
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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