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This increase comes in line with the indexation of inflation, flagged by the government to deliver targeted cost-of-living relief.
The government notes higher inflation since the 2022 Pre-Election Economic and Fiscal Outlook (PEFO) has resulted in higher indexation across a range of payments such as Jobseeker, Disability Support Pension and Age Pension.
This announcement comes as inflation is tipped by the Treasury and major bank economists to reach well north of 7% by year’s end.
Tax credits for those still working
Alongside pension payments increasing, age and service pensioners who look to get back into the workforce will receive a one-off $4,000 credit, allowing older Australians to work and keep more of their money.
The temporary income bank credit will increase the amount pensioners can earn this financial year from $7,800 to $11,800 before their pension is reduced.
Incentivising downsizing
The government will provide $73.2 million over four years from 2022 to prompt pensioners to downsize their homes.
The asset test exemption for pensioners from principal home sale proceeds will be extended from 12 to 24 months.
Further, only the lower deeming rate (0.25%) will be applied to principal home sale proceeds when calculating deemed income for 24 months following the sale of the principal property.
The government notes this measure will reduce the financial burden on pensioners looking to downsize their homes free up housing stock for younger families.
Health card income threshold increased
The government will provide $69.6 million over four years from 2022 to increase the income threshold for the Commonwealth Seniors Health Card from $61,284 to $90,000 for singles, and from $98,054 to $144,000 (combined) for couples.
Deeming rate freeze
The government has detailed it will freeze social security deeming rates at their current levels for a further two years until 30 June 2024.
This freeze is targeted at supporting older Australians who rely on income from deemed financial investments, as well as the pension, to deal with the rising cost of living.
Greater quality of aged care
The government is committing $2.5 billion to improve the quality of aged care for pensioners and seniors utilising these facilities.
The $2.5 billion injection is targeted at funding more carers to provide more time in care.
From 1 July 2023, under the package aged care facilities will be required to have a registered, qualified nurse on site 24 hours a day, 7 days a week.
This will see average care minutes increase to 215 per resident per day from 1 October 2024.
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First published on October 2022
Image by Christian Bowen via Unsplash
Denise Raward
Harry O'Sullivan
Emma Duffy
Rachel Horan
