While the budget hasn't delivered any boost to pensions or support payments above inflation indexation, pensioners are set to benefit from several budget measures.
Energy rebate
All households, including pensioners, will benefit from an extension of the federal government's energy bill subsidies, receiving a $150 rebate for a further six months until the end of 2025.
Bulk-billing
The federal government will spend $8.5 billion over four years in a bid to boost bulk billing at GP clinics with the aim of making nine out of 10 doctor visits free by 2030.
The Coalition has pledged to match the investment if it wins power at the upcoming federal election due to be held no later than 17 May.
Medicines and prescriptions
The cost of Pharmaceutical Benefits Scheme (PBS) medicines for pensioners and concession cardholders will be frozen at their current level of $7.70 until 2030.
For others, the maximum price of medications under the PBS will be capped at $25, down from $31.60.
This change would take effect from 1 January 2026 if Labor wins the federal election.
General health
The federal government will fund 50 new Medicare Urgent Care Clinics around Australia to open during the 2025-26 financial year.
When they are operational, four in five Australians will live within a 20-minute drive of a clinic, according to analysis by the Department of Health and Aged Care.
Treatment at the clinics will be bulk billed under Medicare.
Medicare levy threshold lifts
The government will increase Medicare levy income thresholds, which will see around one million pensioners and other low income earners exempt from paying the Medicare levy - or paying a minimum rate.
The thresholds will increase by 4.7% with the levy now kicking in for single seniors and pensioners at an income level of $43,020 (up from $41,089) and for family seniors and pensioners at $59,886 (up from $57,198).
Aged care funding boost
Payments related to the Aged Care Services program are forecast to increase by more than $906 million in 2025-26.
This boost will cover wage rises for aged care nurses (see below) and increased funding for the Home Care Packages program due to increased package use.
The Home Care Package program provides government-funded in-home support for people aged over 65, with the aim of people of keeping older people in their homes for as long as possible.
No change to deeming rates
The budget has also confirmed what had been widely expected - that there'll be no change to deeming rates that affect around 900,000 people receiving Centrelink payments.
Deeming rates are the rates of return the government assumes people earn on their financial assets including superannuation, savings accounts, and shares.
See also: Australian investment statistics: shares, ETFs, and crypto
They impact whether people are entitled to receive means-tested Centrelink payments including the aged pension, JobSeeker, and parenting payments.
The current federal deeming rate is 0.25% for the first $62,000 of total financial investments for a single person, or $103,800 for a couple, and 2.25% for any assets exceeding those thresholds.
Why are deeming rates significant?
For the past two decades before 2022, deeming rates largely followed the Reserve Bank of Australia's cash rate and fell to their current level in 2020 when the official interest rate hit a record low.
But as rates began their sharp climb in May 2022, the then-Coalition government left deeming rates on hold for two years in what it said was a cost-of-living measure.
The freeze was extended in last year's federal budget and again as part of this budget.
In simple terms, if the rates were to rise back to their long-term levels in line with the cash rate, it would see many welfare recipients lose their payments, or have them cut.
Many term deposits and savings accounts rates are comfortably earning above 4.50%, well above the current deemed rate of 2.25%.
As cynics point out, keeping deeming rates low is costing the federal government billions of dollars.
The government estimates that even a one percentage point increase in deeming rates would save about $1.8 billion in pension and other welfare payments over the four year forward estimates.
However, changing the deeming rates would not be a popular move in the lead-up to a federal election.
Other budget measures
- Aged care registered and enrolled nurses will received another $2.6 billion for further pay rises from 1 March 2025
- The government will address "unfair excessive" card surcharges, signalling it's prepared to ban surcharges on debit cards
- The Australian Competition and Consumer Commission (ACCC) will get $38.8 billion in additional funding to crack down on deceptive pricing practices in supermarkets and the retail sector
How does the 2025-26 budget compare with last year's? Here is what the 2024 Federal Budget delivered for pensioners.
- 2025-26 Budget measures for parents
- 2025-26 Budget measures for homebuyers
- 2025-26 Budget measures for savers
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