At the time of writing we still don’t know when the Federal Election will be held, except that it will be before the end of May. This means that we still expect a Federal Budget to be delivered on 25 March. Even if an election is called, it is likely we will see a Budget Statement from Treasurer Jim Chalmers sometime in March.
So what will be in the Budget that’s of interest to retirees? That’s the really big question and one to which the team at Retirement Essentials has no guaranteed answers. We do, however, have a point of view about what is likely to come through. And we also have strong views about measures we would like to see included, to ensure that older Australians are treated both equally and fairly.
Here are our Federal Budget 2025-26 guesses and wish list.
Changes to Medicare
While some changes to bulk billing were announced on 22 February, Amanda Hardy Lai is suggesting that an increase to Medicare rebates for longer consultations, and even further increases or support for bulk billing is really important.
An increase to Commonwealth Rent Assistance (CRA)
This change was endorsed by all members of the Retirement Essentials advice team who believe that further increases in Rent Assistance are required to help people keep up in a market where median rents have been rising at more than twice the rate of inflation. We believe that an increase is likely to occur.
Because current rent assistance is still substantially below market rates it keeps renters, and particularly single renters, either below the poverty line or working for life.
Head of Advice, David Kennedy also endorses increased funds for more affordable housing for retired renters. There seems to be a lot of talk about this but little in the way of practical action. Andrew Dunkerley also suggests a reduction in tax concessions for those investing in property to help alleviate the housing affordability crisis
Continued freeze on deeming rates
Nicole Bell would like to see a continuation in the freezing of deeming rates which are due to be reviewed on 1 July. She would also like a revision of income thresholds for singles who are already affected under deeming before the assets test applies, to ensure that they aren’t further disadvantaged.
A simpler Work Bonus rule
Nicole also feels that decreasing complexity around the Work Bonus credit is necessary. And that this could be fixed by simply increasing the fortnightly amount rather than the complex $4000 bonus credit rule.
Energy bill relief
Many of the team also want an ongoing commitment to cost of living support through continued energy bill relief. This action is also highly likely in an election year.
Tax relief for financial advice
David also believes that further simplifying the rules on the tax deductibility of financial advice costs to cover more scenarios would encourage people to plan ahead and make the most of their savings as they head towards retirement. When this happens and people are empowered to manage their retirements well, it saves the government of the day a lot of money, so the tax relief can be seen as an upfront investment.
Financial advice standards
Andrew Dunkerley notes that the term ‘Financial Planner’ was enshrined in law (corporations act) a few years ago. If legislators follow the rules that Michelle Levy (head of a review into financial advice) proposes, people potentially won’t know how qualified the person they are speaking with actually is, so people providing advice should only be allowed to use the term Financial Planner if they meet certain educational requirements.
And (from Kaye) here’s my ‘two-bob’s worth’:
Evening up the playing field
There is legislation that was created to introduce an additional 15% tax on super fund earnings for individuals with more than $3 million in super. It has not made it through the parliament. I think that the intent of the legislation was fair, but that it was a poorly constructed parliamentary bill. I would like to see this legislation redrafted and introduced in a way that supports the intent of our mandatory super system – to create retirement income, rather than as an estate planning vehicle.
More funds for financial literacy
Approaching retirement means many questions about super, the Age Pension, investments, mortgages and ongoing work. These matters are usually interconnected, so it’s far from simple for many retirees to know their options and all the rules. There is no national literacy program to support retirees to better understand the key aspects of their retirement income journey. Better funding of basic retirement literacy would make a lot of sense according to a few of the advisers.
More support and protection for those who are scammed
It seems that major financial institutions – particularly banks – are super keen to have your business. But if, through no fault of your own, your funds are fraudulently removed from your account, it is likely your banking institution will not make good. There needs to be more accountability and a stronger requirement to support customers from the banking sector.
There are so many ways that the Federal Government can spend tax payers’ money. Many Australians will look at the annual budget through a lens of self-interest and want more for their own particular ‘tribe’ – sometimes at the expense of others. Others look through the lens of need – they actually need extra support. It’s a tough job looking at the many ways of spending taxpayer dollars and getting the balance right – let’s hope the politicians are up to it!
What say you?
Do any of the issues raised above strike a chord with what you would like to see?
Or are there other budgetary measures that you believe matter more?
The need for better financial decision-making support is one of the reasons that Jeremy Duffield and Hugh Morrow first created Retirement Essentials. Their goal was to help people navigate the confusing minefield of retirement options by providing trustworthy advice from experienced advisors, with no product sales involved.
A thorough Retirement Essentials Retirement Health Check may help you understand the things you’re unsure about and the many ways to create a sustainable retirement income. Here’s how we can help.
What about quarterly indexation for age pension. Review of pension calculation indexation, something similar to the independent body that federal Mp’s get their increases, fairs, fair.
Presently CPI is a faulty instrument, basket of goods??? and CPI may be down but prices are excessive. The system is broken. Endless indexation of grog, fuel etc is totally corrupt and gravy train for government.
I don’y want a one off electricity amount, commonsense is to increase the electricity component of the the aged pension.that is lasting; not just a quick fix.
Yes time for govt. to act and make some gutsy decisions, better still, get rid of them. Governor General to dismiss all and put in a council of true Australians, business, citizens and military.. Have a proper soverign fund, make sure gas, energy, mineral exports are not given away. Correctlt tax big business. Time for the revolution. Good luck with this.
The one off electricity payment reduced the CPI which in turn reduced the amount of the age pension increase…crafty maneuvering by government to actually get More money
If you have a small bundle of shares outside of your super and you sell them you should not have to pay capital gains tax if you are not earning less than $18,200 a year. That should change. If you sell an asset and its capital gain is above the $18,200 for the year then I understand the tax but it should not apply if you earn less than $18,200.00 for the year.
Can you make suggestions for the other side of this, that is, how the govement should should fund proposed increased support to retirees, renters, etc and also reduce our country’s current debt. They are all good causes but how much extra debt should we impose on our future generations.
A good start to reducing our current debt would be if the government would stop giving themselves such high unwarranted pay rises!
We need a simplification of the system. NZ is the best example where everyone receives the pension and can also work and are taxed on total income at the end of the financial year. The savings in administration of the aged care pension would be enormous and probably pay for this change.
I agree with Marcia G a simplified no penalty for working system, where either the working bonus can absorb 60000 or 90000. Also rather than lowering combined assets of retirees they should be increased to 3m. Everything including assets have gone up.
Can ANYONE on here give an accurate account of the amount of taxes, rates, stamp duty, levies, etc that they have paid out in their lifetime? It would be scary. Has anyone ever worked out ALL of those above mentioned incomings, over the course of, say, 5 years? Then worked out the incomings of, say, a 5 percent consumer tax payment, paid by ALL, with ALL other taxes, whatever’s, dismissed? If people have more in their pocket, they’ll spend it. How many times should people have to pay stamp duty & you want older Australians to down size? If we’re going to have proper tax reform, include everything & simplify the whole structure, rules & fake laws. Surely an accurate model can be produced showing this comparison.
Everyone of us who work and pay taxes should receive the age pension. However, under our system you are penalised for owning your own home, saving and investing due to assets tests. Why do people come in from overseas never work a day don’t pay taxes but own assets overseas such as property and cash which are not taken into consideration when they apply for the pension. The system is unfair to every day Australian’s and well and truely broken.
Hi Will, I just want to clarify one part of your comment. Foreign income/assets are assessed the same as those based in Australia so having overseas investments is not a loophole that can be exploited.
I have said this before in comments, but no one appears interested in taking it up (including Retirement Essentials – unless I have missed something). Dental health is essential to overall health, but for many people having essential general procedures and more expensive necessary procedures such as implants dentures etc is well beyond their means. Dental Care should be a “universal” right and should be included in Medicare !
Hi Peter, thank you for raising your concerns and I apologise if you feel we are ignoring you. Retirement Essentials is a private organisation that believes everyday Australians deserve to take control of their finances and have peace of mind throughout retirement. We offer affordable, bite-sized, financial advice that has helped thousands of Australians and at all stages of their retirement journey. As such, we are not in a position to bring about changes to what is/is not included in Medicare.
Thanks Stephen. I totally support what you guys are doing and your regular bulletins are of great assistance. I don’t expect that you can single handedly change legislation, however you can raise awareness of issues that affect retirees. I have seen RE do this in many bulletins, even in this one.
“ Changes to Medicare
While some changes to bulk billing were announced on 22 February, Amanda Hardy Lai is suggesting that an increase to Medicare rebates for longer consultations, and even further increases or support for bulk billing is really important”.
Keep up the good work, and don’t underrate the influence RE can have on broader social issues.
I would like to see stamp duty reduced or removed for retirees who wish to downsize. My husband and I are both retired livein a 4 bedroom 3 bathroom house. We don’t need such a big house and would love to downsize but, when we do the “sums’ stamp duty keeps us paralyzed.
I also agree that a Universal Pension would save so much money in administration etc that it would come close to breaking even financially.
Margaret
I have a small UK state pension. How should I enter it in your calculator? Is there a formula that I should use to convert it to A$.
Hi Grace, for the most accurate calculation you should enter the UK pension as the rental income in our calculator. Having said that, using either of the other two options only has a marginal impact and the outcome will be similar either way.