I have put together a summary of the key points announced in this year's budget that may affect your retirement. These are the proposed budget measures, and some still need to be legislated.
Here's a snapshot of what was proposed:
Medication Access
Pensioners and Commonwealth Seniors Health Cardholders will benefit from cheaper medicines with a freeze on PBS co-payments for up to 5 years, along with convenient access to vaccines through the National Immunisation Program.
Energy Bill Relief Fund – extension and expansion
The Government has announced it will provide a non-means tested $300 energy bill rebate to all Australian households to offset energy bills in the 2024-25 year. The rebate will provide cost of living relief and will be automatically applied to a household’s electricity bills in quarterly instalments.
Stage 3 tax cuts
The already legislated Stage 3 tax cuts make changes to personal income tax rates and thresholds from the 2024/25 financial year, resulting in tax savings for all taxpayers.
The Stage 3 tax cuts will make the following changes from 2024/25:
reduce the 19% tax rate to 16%
reduce the 32.5% tax rate to 30%
increase the 37% tax rate threshold from $120,000 to $135,000
increase the 45% tax rate threshold from $180,000 to $190,000
Increased Medicare Levy
The Government has increased the Medicare levy low-income thresholds for singles, families, and seniors and pensioners from 1 July 2023 to provide cost-of-living relief. The increase to the thresholds ensures that low income individuals continue to be exempt from paying the Medicare levy or pay a reduced levy rate.
Freeze social security deeming rates
The Government announced it will freeze the social security deeming rates at their current levels for a further 12-months until 30 June 2025.
The Government said freezing deeming rates for a further 12 months was to support Age Pensioners and other income support recipients who rely on income from deemed financial investments, as well as their payment, to manage cost of living pressures.
Increased flexibility for Carer Payment recipients
The Government has announced funding to support Carer Payment recipients through increased flexibility to undertake work, study and volunteering activities. The participation limit will no longer capture study, volunteering activities and travel time and will only apply to employment.
The Government has also announced that Carer Payment recipients who exceed the participation limit or their allowable temporary cessation of care days, will have their payments suspended for up to six months instead of cancelled.
Budget Highlights for Aged Care
$2.2 Billion Allocated - The budget includes a significant investment of $2.2 billion to strengthen the quality of aged care services, focusing on improving wait times for in-home care, enhancing workforce conditions, and ensuring safety and quality standards.
Reduced Wait Times - An extra 24,100 Home Care Packages will be provided in 2024–25, reducing wait times to an average of 6 months and enabling more Australians to access in-home aged care than ever before.
Rights-Based Act - A new Act will prioritise older people's rights and protections, creating a transparent and accountable system for aged care providers and workers.
Support for Dementia Care
More funding for services and support for people with complex care needs and the expansion of programs to transition dementia patients from hospital to aged care services.
Bill Savellis
Senior Financial Adviser
Having navigated the Aged Care landscape for both of his parents, Bill understands how challenging it can be to make the right decisions for your future care needs. That's why he believes that everyone should have access to financial advice during this time. Bill has been a Financial Adviser for over 22 years, and is passionate about helping others access the financial advice they need. Drawing from his own experience in the financial sector, Bill develops strategic, personalised plans to support transitions to Aged Care or Home Care.
Disclaimer: Prepared without taking into account your objectives, financial situation or needs. Before acting on any information in this article, Olive Grove Financial Advice recommends that you consider whether it is appropriate for your circumstances. Information in this article was correct and current as of 3 June 2024. Olive Grove Financial Advice is operated by Bill Savellis through The Financial Advisor (Australia) Pty Ltd ABN 72 619 546 431, who is a Corporate Authorised Representative (No. 1278394) of Havana Financial Services Pty Ltd.
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