Budget March 2022 for older Australians
Click here for information about the October 2022 budget delivered by Jim Chalmers
After weeks of leaks and speculation, the Treasurer presented the Federal Budget 2022-23 in parliament last night. There are wins and losses for older Australians in this year’s budget. Here is our summary of what you need to know and how and when such changes might affect you. The budget still needs to be passed by Parliament however the Opposition has already said it will support these measures so it is extremely likely they will be pushed through quickly. Our Editor James Coyle also offers commentary on whether this budget is a positive step forward for Australians either in retirement – or planning to be so in the next few years.
Cost of living cash payments
A one-off $250 ‘cost of living’ payment will be made to all Australians who hold a Pension Concession Card (PCC) on March 29. So this benefits anyone on a full or part Age Pension. It is also being paid to holders of the Commonwealth Seniors Health Card (CSHC) and some other groups receiving Centrelink benefits. People receiving the Age Pension or holding the CSHC as at the 29th March will automatically receive this payment. The payment will be made sometime in April and is a welcome acknowledgement of rapidly rising household expenses. The ABS will also issue a CPI update for the March 2022 quarter on April 27 and this is expected to be in excess of the 3.5% increase in calendar year 2021, which will mean that the recent Age Pension indexation did not cover the household cost of living increases.
Not sure if you are eligible for the Age Pension or the CSHC? Want to check? Find out in minutes here
Pension drawdown reduction extended
If you have reached preservation age and activated your superannuation drawdown, either through an Account Based Pension (ABP) or a Transition to Retirement (TTR) account, you will be aware that the minimum drawdown from your account was halved back in 2020 as a measure to help those juggling retirement income during the early days of the pandemic. For example those up to age 64 had their minimum drawdown of 4% halved to 2%. This measure was due to expire in July, 2022 but has now been extended until July 1, 2023. We will further explain superannuation withdrawals, the percentages for all age groups, and how Transition to Retirement works in the next two issues of our weekly enews – keep an eye on your inbox for all the details.
Unsure about your own super drawdown? This involves big decisions, so it may help to speak with one of our experienced advisers. It’s easy to book a consultation and set your mind at rest?
Tax offsets
If you are a taxpayer – and many retirees are – you may be receiving a $420 tax offset on July 1. This offset is aimed at low to middle income earners, thus the term LMITO. It applies to those earning less than $120,000 per annum. If you already receive the LMITO ($1080), the extra offset means that you could receive up to $1500, or $3000 for couples. The measure is in place for one year only.
Fuel excise relief
This is not just a benefit for car owners or drivers, but for all those who pay for motor transport such as taxis and Ubers. The current 44.2 cents government petrol and diesel excise is being halved for six months, which means in the next fortnight or so, petrol prices should ease by 22.1 cents. The passing on of the lower prices will be monitored by the Australian Competition and Consumer Commission (ACCC). The saving on an average tank of fuel, according to budget papers, is $11. Whilst this is of clear benefit to those who are paying elevated prices to fill their tanks, it has been pointed out that when the price goes up again in six months, it will go up by the full 22.1 cents which will cause a serious leap in household expenses – and CPI.
James’ Opinion – Sugar without substance
There was clearly some good news for older Australians. The additional $250 in support for age pensioners and concession card holders is very welcome. People with Account Based Pensions will also enjoy the extension in the reduction to minimum withdrawal rates. This affords them additional flexibility in managing their retirement finances.
The budget forecast very low unemployment and we are already seeing labour shortages in some industries. We were very disappointed therefore to see there was nothing new done to encourage older Australians to remain in, or re-join, the workforce. There are in fact disincentives for some older Australians to work which hurt us all. The social connectedness of work, not to mention the additional income, can make a huge difference to older people whilst we all benefit from their skills and experience. Some simple changes could include:
- A further increase in the income thresholds for the Age Pension and Commonwealth Seniors Health Card
- A more generous work bonus
- Reducing the 50c of Age Pension lost for every dollar earned above the income threshold
All these measures could have encouraged greater participation in the workforce by older Australians and – given the forecast low unemployment – a real opportunity was missed here.
What do you think?
A blatant cash splash for votes and another missed oportunity for meaningful measures that would make a huge difference. This tired, corrupt government needs to go.
Perhaps we have short memories. Remember at the last election labor were wanting to remove the refund of franking credits to pensioners which would have affected self funded retirees significantly and super funds, affecting all. Then removing negative gearing would have pushed up rents for many aged pensioners renting.
and the sooner a government addresses these issues the better for the community as whole – negative gearing and franking credit refunds are blight on a fair society
Totally agree.
Yes Colin, and thus putting Billions into the national coffers, which just might have inspired them to give pensioners who work more than one day a week a tax break of .69 cents in the $. Which is what pensioners are now paying. The highest taxed group in Australia 🙁
Stop whinging and be a bit gratefull how good is to be a pensioner in this country and how well this government handled unprecedent events globally and domestically comparing to the rest of the world’s governments, everyone just criticises and labour has nothing to offer pretty weak party during this time
Well said
mmmm…. Pensioners are the highest taxed group in Australia .69 cents in the $ if we work more than one day/week. Should we do our bit without complaint? to fund the car-porks?
You’re obviously not a liberal voter 🙂
And be replaced by what?
After nearly a decade of this mob its clear to see that they haven’t had the Pensioners best interest at heart. if you’re concerned about what the ALP will offer surely it could only be better than another 3 years of Scotty from Marketing!
What is wrong with pensioners in Australia so greedy if you lived overseas you wouldnt be so lucky wake up people stip knocking the government be grateful we have the situation we have
Perhaps we could retain the coalition but with a new leader more attuned to the needs of all voters. I personally am very sceptical of the ALP as all they seem to have done over recent years is criticize without offering any detailed explanation of how they would have done things better
Cash splash with no substance for real reform this I think is their last chance and they blew it
You got that right Bob. What I think is needed is the ex pollies who still get paid should be stopped. How rude is that???? when most pensioners work hard all their lives, contribute with paying taxes then are scrutinised when we retire. We are hammered so hard with the asset test and have to be almost broke to be entitled to the full pension yet ex politicians still earn a nice wage after they retire. In the normal workplace this is never going to happen, you don’t keep getting paid just because you are a ex employee. No wonder politicians stay put, although most complain it’s not the easiest of jobs but they also know they will be looked after in retirement. This I think should be a talking point and should be acted upon in fairness to all Australians who have contributed to the government coffers.
I stopped working at age 74 recently at age 80 I needed the pension. Now I am a pensioner.
The amount of help for pensioners is amazing. When you become a receiver you need to work with the system and stop complaining. I know what people in many other countries receive Australia provides very generously for the aged.
The problem is the companies that administer packages and take from 15% to 30% of what the government gives for administration. Nursing homes save on food, cleaning, mental stimulation programs, and many other things and pocket money provided for care. This could be changed.
I visit hospitals and nursing homes for my church and see places that are run very well and many that are not.
Please help to get the bad operators out of nursing homes. Make sure the staff is trained in every facility, make sure there are trained nurses in each facility and people are better paid so they stay in the jobs once they are trained.
I am grateful for what I receive.
Me too I have no complaints . People want too much fir doing too little
Very well said Agnes WE ARE LUCKY !!!!
Will I be Be able to receive the $250 payment as my application for the age pension has been submitted to Centerlink but as yet has not been approved
Hi Gary, great question and unfortunately the wording used is simply “eligible pensioners” so it isn’t explicitly clear whether people like yourself are approved after 29th but are backdated to the lodgement date which was prior to the 29th will be considered eligible or not. Our belief is that you need to have been approved prior to the 29th March to be considered eligible for the one-off payment.
And the other side is offering?
Your repetition suggests you’re sandbagging, Rob. The opposition’s Budget Reply address hasn’t happened yet.
God help all of us if whinging Jim Chalmers becomes Treasurer. The country will bankrupt within 12 months
If you call alternative considered opinions “winging” then I say Jim should keep it up
Based on the other lot’s “Debt and deficit disaster” rhetoric of a few years back, they’ve already managed to achieve that five times over. Apparently, it’s all good now, though.
I have recently qualified for a pension, but only get a small amount as my wife works part time. The fact is age pensions in his Country should not be subject to an income and assets test. I worked 41 years straight paying a bucket load of tax over that time. Like England and New Zealand we should have the benefit of receiving a full pension when our Superannuation runs out. It would massively boost Australia’s spending and keep the economy going. This Government can’t see the woods for the trees! It spends way too much time penny pinching and can’t staff Centrelink nor Aged Care to allow it to do a reasonable job.
Can the next Government do any better? Hard question but I live in hope!
My husband done 45yrs in the firebridage full time .I work part time 18 hrs and he’s still not in tile to anything .we only own our house nothing else .people that has done there time fully and padded there way should get something.
Totally agree Eric. If New Zealand can do this – why can’t Australia? Seniors who complain about the shortage of trained nurses/ staff in Aged Care need to get on board too. Where exactly do they think these éxtra workers’are coming from??
I concur with Eric’s comments. Why one wonders is the pension still limited by what we own? Surely after many years of hard work a person should be entitled to enjoy the fruits of that labour! Assets should only be used to limit a pension when that asset earns income or is sold. As it is many Australians who are asset rich are penalised for being so and many are forced to sell their hard one assets simply to qualify for the pension. Not fair!!
Seniors are being encouraged to downsize their housing and liquidate assets. Once this is done they will be no longer eligible for the aged pension AND forego their PCC (Pension Concession Card) as they will now become ineligible due to the assets test. Why shouldnt all retirees of age pension eligibility at least get the PCC.
Robert Harris, that’s exactly right what you say. I wonder whether the ex pollies are put through the same asset tests as we mere citizens are abused to??? A person should not be punished in retirement if they have managed to save during the working years while still contributing to the nation by paying taxes. The deeming policy should be abolished as I don’t think it’s fair. Any assest should just be counted for what they are worth today, not what the government speculates what they could be worth in the near future. People say we are lucky with our pensions here in Australia because most other countries aren’t as generous. There are a lot of countries who actually pay for health and utilities for it’s people. Here the government sells everything off to keep the money flowing which will eventually run out so it cannot support it’s people with free utilities. It’s even sold our utilities to private enterprise. The internet should be another free utility for everyone. It should not be looked at as a business to make a profit, it should be owned and run by the government and given full use to the public at no charge. As it is the Australian government looks after it’s members first and keeps taking from the public until the very end. We need to ask why ex pollies are still paid a generous wage (well that’s what I call it) after they are no longer a member of government.
Like many people in our age group, over 70, we have worked continuously since our teens, and can prove it. Some pensioners have been luckier or more clever than others, and are now very comfortable, which is great.
But I believe our work/tax paying history should also be taken into account at time of pensionability (sic), and bolster our claim to full pension if we can prove how long we each paid tax since mid 1960s. It should matter!
nesara gesara It’s all under way
fiat to decimal currencies,
Can anyone help me with this please, and that is when is the change going to take place.
And how/what could be the best way to deal with this conversation,
Kind Regards
Brian Moody
So what happens if you live off your superannuation pension (eg age 66) and waiting to become a pensioner (age 66.5), you miss out on the government’s cask splash? No doubt there are are a number of people in this situation.
Yes Brigitte, it would make a difference my brother has worked for only two years in Australia then lived overseas on the high life , got sick returned to Australia at the age of 55 and the taxpayer has been keeping him while he plays his golf and enjoys a wonderful life in Noosa.
How much fuel will be dangerously stored just prior to the prices going back up again in 6 months or so? I hope my neighbour’s either side of me are not planning on storing multiple 44 gallon drums of cheaper fuel. Talk about a ticking time bomb and I doubt that your insurance company will be covering you for fire insurance if you were also storing masses of cheap fuel in your garage or shed in the event of a fire.
The liberals and the nationals only understand interests not ideas, this will never change plus they have taken great delight in swallowing the TRUMP PILL, truly they are a joke
I’m An australian living overseas, ( in retirement) will I get the $250, payment?
Hi Cecilio, great question! The one off payments are only available to people residing in Australia so no you will not receive one.
Interesting comments both sides but on balance, the government has blown it.
I am also of the opinion that having worked productively for more than 50 years, my wife and I have earned our pension entitlement and it should be sufficient to live reasonably – not just exist.
The Budget has done nothing to encourage older Australians to work and earn more money. We have been asking for this to be changed on numerous occasions . We like to be able to work like the New Zealand pensioners and not penalised with a reduced or even NIL pension.
Much has been said and enough is enough…………………….can RETIREMENT ESSENTIALS represent us and raise this awareness to the Government again?
I have to turn down some high paying jobs in the past and this is a real disincentive for me!
Thanks for your comment Belinda. New Zealand has a system that is sometimes described as a Universal Age Pension. We wrote about this a while ago in Should we have a Universal Age Pension? and followed this up with a survey where the overwhelming majority of people supported Australia having a universal Age Pension. Perhaps it is time for us to re-run the survey to see if people’s views on this have remained the same.