Make sure you know about this upcoming Age Pension change

Age Pension changes
From July 2021, the Age Pension eligibility age will go to 66.5 years of age, which could be confusing if this is the year you turn 66. If this is relevant for you, make a diary note to look closely at the Age Pension application process 13 weeks before your actual birthday, so you can address any hiccups well in advance.

Pension payment update
Age Pension payments increased on 20 March. From 20 March 2021, the following fortnightly pension payment rates apply:

Maximum fortnightly Age Pension payment rates

   Previous  Current  Increase 
 Single Base $860.60 $868.30 $7.70
  Supplement $69.60 $70.30 $0.70
  Energy Supplement $14.10 $14.10 –
  Total $944.30 $952.70 $8.40
 Couple (each)  Base $648.70 $654.50 $5.80
  Supplement $52.50 $53.00 $0.50
  Energy Supplement $10.60 $10.60 –
  Total $711.80 $718.10 $6.30

Age Pension rates are due to be adjusted from 20 September 2021. The upper thresholds for the assets and income tests (i.e. for those who are eligible for a part Age Pension) will also be adjusted at that time. 

Concession card
As soon as you receive a Pensioner Concession Card, start applying for your entitlements. The top five are:

  • gas rebate
  • electricity rebate
  • water rebate
  • council rate discount
  • driver’s licence and registration concession.

Super changes
The Australian Taxation Office (ATO) has confirmed increases to a number of superannuation key rates and thresholds, which could provide a boost of up to $100,000 for some retirees.

From 1 July 2021, Australians will be able to put more into their super because the concessional and non-concessional contribution caps, and the general transfer balance cap are set to increase due to indexation for the first time since July 2017.

The annual concessional contribution cap will increase from $25,000 to $27,500. The annual non-concessional contribution cap, for contributions that are made into your super fund after tax is paid, will increase from $100,000 to $110,000 on 1 July.

Read more: Biggest rip-offs in retirement and how to avoid them

The latest figures also show an indexed increase in the transfer balance cap from $1.6 million to $1.7 million.

Further information is available at the ATO website.

In other super news, the temporarily reduced minimum drawdown amounts for account-based pensions, which have been in effect for 2019-20 and 2020-21, will end on 30 June 2021.

Tax time
If you earn less than $54,837 and add money into your super fund before 30 June, the government may also make a super co-contribution up to a maximum amount of $500.

The co-contribution amount depends on your income and how much you contribute. To get the maximum co-contribution of $500, your income must be $39,837 or less and you need to make a contribution of $1000. If your income is between $39,837 and $54,837, your maximum entitlement will reduce progressively as your income rises. The money needs to be in your super fund by 30 June to be eligible for a co-contribution for this financial year.

You may also be able to claim a tax deduction for any after-tax contributions you make to your super fund, which could potentially increase your tax refund.

Electricity rebates
The NSW government offers several electricity rebates for older Australians; however, they each work differently.

For Australians with a Pensioner Concession Card, there is a Low Income Energy Rebate. If you have an account with an energy retailer, you can simply let them know your card details, and your rebate is applied directly to your account. This arrangement should stay the same until you change it.

Read more: Best-performing super funds of the past 10 years

If you live in an ‘on-supplied’ residential community, retirement village or strata scheme, you have to apply for your rebate and reapply each year.

Self-funded retirees need to hold a Commonwealth Seniors Health Card and reapply each year.

Are you diligent about seeking out rebates and concessions available to retirees? Have you found any that are not widely known?

Read more: Services and rebates that can save you hundreds

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