Retirement rules and changes to watch for in 2023

older couple surprised by the retirement rules in 2023

You may be retired but it’s almost another job keeping up with all the retirement rules such as government changes to the Age Pension, financial shifts, and the various benefits available to older Australians. This guide on retirement rules in 2023 should help prepare you for the coming year.

Medical costs

From 1 January 2023, the maximum cost of general prescriptions under the Pharmaceutical Benefits Scheme (PBS) will fall for the first time in its 75-year history.

The PBS co-payment for general patients will reduce from $42.50 to $30. This amount will then be indexed on the first day of every new year, from 1 January 2024.

The variations will not change the PBS Safety Net thresholds. General patients may need to fill a larger number of scripts to reach the general PBS Safety Net threshold, but they will not pay more to reach the PBS Safety Net and will receive a higher number of scripts for the same cost.

The current thresholds are $244.80 for concession card holders and $1457.10 for general patients. These figures will be updated on 1 January 2023 and again in July.


With the cost of living constantly front of mind, or if you have cash in the bank earning interest, the Reserve Bank will announce its first interest rate decision for 2023 on Tuesday 7 February. The RBA meets monthly to review the rate but does not meet in January.

Read: Australians delaying retirement by five years, survey finds

Aged care

If you have a family member in aged care or are considering moving into aged care, the federal government has moved to cap home care costs and home care package management fees and has banned all exit fees as well as brokerage and subcontracting fees.

As of 1 January, home care management fees will be capped at 20 per cent and package management fees at 15 per cent.

According to National Seniors, the legislative reform was recommended by the aged care royal commission and followed complaints that some providers were overcharging clients and billing for unnecessary fees to lift profits.

“Some older Australians have been paying up to 50 per cent of their Home Care Package as administration and management fees. That is not affordable or sustainable and is simply wrong,” said National Seniors Australia chief executive Professor John McCallum.

Read: Seven reasons seniors stay frugal in retirement

The government will consider the need for additional or lower caps as it monitors Home Care Package prices in 2023.

In further changes, providers cannot charge for package management in a calendar month where no services (other than care management) are delivered, except for the first month of care. Providers cannot charge separately for third-party services, and they cannot charge exit fees.

Updated Schedules of fees and charges for Residential and Home Care will apply from 1 January 2023. For care recipients who started care on or after 1 July 2014, visit here.

For care recipients who started care before 1 July 2014, visit here.

Services Australia’s quarterly review of Residential and Home Care fees will take effect from 1 January 2023, updating care recipients’ fees to align with any changes in their financial circumstances.

The quarterly review will take place on 14-15 January 2023. The online claiming system for Home Care will be unavailable from 8pm Friday 13 January to 8am Monday 16 January as quarterly review tasks are undertaken.

Care recipients and providers will receive letters advising any fee changes or refunds resulting from the quarterly review.

The maximum permissible interest rate (MPIR) will also increase increase to 7.06 per cent for the period 1 January to 31 March 2023.

The MPIR is a government-set interest rate used to calculate a daily aged care accommodation payment based on an agreed room price.

It is used to determine equivalence between a daily payment and a refundable lump sum deposit, giving you a choice in how to pay. 

The MPIR is also used to calculate interest on refunds of accommodation lump sum balances.

New ratings

All residential care should have star ratings as of 31 December. Use this tool to find the star rating of any aged care provider in Australia.

For aged care residents, $2.5 billion was set aside in the federal budget to mandate a minimum number of care minutes for nursing home residents and to employ registered nurses onsite 24/7 in residential care. Average care minutes will reach 215 minutes per day per resident by October 2024.

In-home aged care

There are also changes coming to in-home care.

From 1 January 2023 there will be set limits on what providers can charge for care and package management.

In addition, providers can no longer charge for exit charges, additional costs for third-party goods or services and package management charges in a month (except for the first month of care) where clients do not receive services other than care management.

According to MyAgedCare most providers are charging under the new limits for care and package management. If this is the case with your provider, you won’t see changes to these charges.

However, if a provider is charging above the new limits, they will need to reduce their prices from 1 January 2023.

The move is designed to ensure clients only ever pay the published prices and there are no hidden charges.

And for next year, under changes to in-home care from 1 July 2024, the federal government will combine home care services into a new streamlined Support at Home program. Under the proposed model, home care prices will be set by the government.

Senior Australians will receive care based on their individual needs and personal circumstances, rather than being placed in one of the four package levels.

A new assessment tool will be introduced in July 2023 under a single assessment system.

Age Pension

The Age Pension eligibility age will increase to 67 years from 1 July 2023.

The Age Pension rate is tipped to change on 20 March 2023. An increase is likely but not certain as the Australian Bureau of Statistics evaluates these increases based on changes in the Consumer Price Index, Male Total Average Weekly Earnings, and the Pensioner and Beneficiary Living Cost Index.

Read: Budget pumps funds into downsizing scheme

Another regular change is the income and assets test thresholds which occur every July.

The Work Bonus has increased by an additional $4000 o $11,800. The increase took effect on 1 December 2022 and will cease on 31 December 2023.

For downsizers, the government will extend the assets test exemption period on the sale proceeds when income-support recipients sell their principal residence, from 12 months to two years.

It will also change the income test so only the lower deeming rate of 0.25 per cent is applied to principal home sale proceeds when calculating ‘deemed income’ for two years after the transaction.

“This measure will reduce the financial impact on pensioners looking to downsize their homes in an effort to minimise the burden on older Australians and free up housing stock for younger families,” the Budget papers said.

Odds and ends

The government reduced the minimum annual payment required for account-based pensions and annuities, allocated pensions and annuities and market-linked pensions and annuities by 50 per cent for the 2019–20, 2020–21, 2021–22 and 2022-23 financial years. But that ends after this financial year.

If you are still working, the super guarantee will continue to increase by 0.5 per cent on 1 July each year until it reaches 12 per cent in 2025.

In good news for grey nomads, caravan parks will be upgraded as part of a $48 million domestic tourism package, which also includes help to recruit and train staff for the sector.

Which of these retirement rules will affect your financial planning or income for the next year? Why not share your thoughts in the comments section below?

Written by Jan Fisher

Accomplished journalist, feature writer and sub-editor with impressive knowledge of the retirement landscape, including retirement income, issues that affect Australians planning and living in retirement, and answering YLC members' Age Pension and Centrelink questions. She has also developed a passion for travel and lifestyle writing and is fast becoming a supermarket savings 'guru'.

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  1. It’s about time the Australian Governments took a wake up, pensioners are not being paid enough we paid for our pensions with taxes of our working life. Also we should not be penalised for selling our homes we worked to pay for them plus interest rates plus rates. If pensioners want to work the Government gets the taxes they pay from their salaries why should there be limitations on what you earn?
    We for once need responsible intelligent people running our country not Politicians who have no idea except how to line their picks!

  2. The Age Pension Age will increase to 67 from 1 January, 2024, not 1 July 2023. There’s always been a 6 month gap between the last day of the previous eligibility period and the new one. Eg 1/1/54 – 30/06/55 – 66 years, (from 1/1/20 – 30/6/21), 1/7/55 – 31/12/56 – 66.5 years (from 1/1/22 – 1/7/23), and from 1/1/57 forward, it’s 67, (from 1/1/2024)

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