Part of making retirement affordable is fully understanding your entitlements and keeping up to date with rule changes. Here are the latest government updates to help you stay on track.
Income and assets tests
From 2 July, the maximum income amount before the full Age Pension is affected is $172 per fortnight for singles and $304 combined per fortnight for couples The new thresholds are $1987.20 and $3040.40 respectively. The new asset limits are $561,250 for single home-owners and $844,000 for couples (combined). For non home-owners, the limits are $768,250 and $1,051,000 (combined).
Widow Allowance no longer available
From 1 July 2018, the Widow Allowance was no longer available to new applicants. Those who would previously have claimed the allowance can now make a claim for either the Newstart Allowance, Age Pension or Special Benefit (if you’re over Age Pension age but don’t meet residence rules for the Age Pension).
Recipients of the current Widow Allowance can keep the payment until 2022 or until they transfer to the pension (whichever is sooner), as long as they retain their eligibility.
End to backdated payments
Claims for certain payments and concession cards will need to be completed in full before they are assessed, with the cessation of ‘intent to claim’ arrangement to enable backdated payments from 1 July 2018.
You will have 14 days to complete your claim if you contact Centrelink, start an online claim or submit an intent to claim before 30 June 2018.
Payment of Carer Supplement
Those eligible for the Carers Supplement will receive a payment of $600 for each eligible person in their care. If you care for a disabled child, you will receive the Child Disability Assistance Payment of up to $1000 for each eligible child. These payments will be made between 1 July and 31 July 2018.
Changes to grandparent payments
From 2 July, grandparents who care for their grandchildren will face changes to the payments they receive, with the Grandparent Child Care Benefit (GCCB) being replaced by the Additional Child Care Subsidy (Grandparent) (ACCS) from 2 July 2018.
If you are already receiving the GCCB, you will receive a letter from the Department of Human Services advising you of the changes. If you wish to claim the ACCS (G), you will need to complete a child-care subsidy assessment via your online Centrelink account.
Downsizing super rule starts
On 1 July 2018, the much-vaunted ‘downsizing’ super rules commences. This allows retirees to make a non-concessional contribution of up to $300,000 (singles) or $600,000 (couples) into super from the proceeds of selling their primary place of residence, if they have lived there for 10 years or more. This contribution applies even if the super balance exceeds the current $1.6 million cap.
There could be a financial downside for those who take advantage of the program, with changes to exempt asset values possibly affecting your Age Pension.
More super changes take place
As well as the downsizing rules, other changes to super rules took effect on 1 July. These were:
- the Superannuation Complaints Tribunal was replaced by the industry-funded Australian Financial Complaints Authority (AFCA)
- individuals whose annual income exceeds $263,157 and have multiple employers are able to nominate that wages from certain employers are not subject to the superannuation guarantee
- rules for tax deductions on personal contributions tightened
- catch-up super contributions can be made by individuals with a total superannuation balance of less than $500,000.