Federal Budget, Jim Chalmers, retirees, retirement income

Federal Budget 2023-2024:

What we’d like to see

Our goal at Retirement Essentials is simple. It is to help all older Australians to enjoy their best possible retirement. This we do by providing financial guidance and support when it comes to managing your retirement finances and accessing Centrelink entitlements.

We have a strong desire to see older Australians treated as fairly and equitably as possible and Government policy has a major impact on this. So here is our wish list for the Federal Budget 2023-2024, due to be delivered by Treasurer Jim Chalmers on Tuesday May 9.

Cost of living relief

It’s not unusual for special payments to be made so that sectors of the population receive targeted relief. There are precedents for such payments being made when times are tough, for example one-off payments made to seniors in the early days of the Covid pandemic. Such relief can take different forms:

  • one-off payments to welfare recipients and those with a  Commonwealth Seniors Health Card, 
  • discounted essentials including utilities and medical needs, 
  • tax changes on essentials, including fuel, 
  • caps on prices 
  • assistance through other government services – medical, pharmaceuticals etc, 

There is also the chance to make changes to pension indexation if inflation continues to rise at punishing rates. 

We believe that the Treasurer has a range of tools at his disposal. Given that some older Australians are at risk of being left behind financially, some relief on household essentials is necessary.

Commonwealth Rent Assistance

More than half a million renters are aged over 55. This equals about 13% of retirees. Those on an Age Pension or JobSeeker are entitled to Commonwealth Rent Assistance (CRA) if their rent is above a nominated amount. The current rates of rent assistance are $157.20 for singles and $227.40 for couples. This amount was increased by 3.6% when indexed on March 20, but rentals are reported to have increased by 11% or more in some cases over the past year. In old-fashioned lingo, it’s a seller’s market and those renters on a full Age Pension are now paying more than 30% of their income in rent. This places them in the category of living in poverty. We believed the CRA must be increased in line with market rates. 

More certainty for superannuants and self-funded retirees

Most Australians have super, albeit some with higher account balances than others. Regardless, most find it difficult to plan and manage retirement income when the goals posts are frequently shifting. We think more certainty is required. We appreciate that the recently reported changes (tax increases on balances over $3 million,) was intended to make super more equitable. But we also believe that retirees need a degree of certainty so they can plan ahead in a reasonable and rational manner. A moratorium on changes to superannuation could be a good start.

Extension of the Work Bonus

The $4000 increase to the Work Bonus ends in just over six months (see the detail on this in today’s explainer). We want an extension of this bonus as it provides more incentive for older Australians to maintain a connection with the workplace and earn additional income. Work brings so many benefits, including but not limited to a sense of connection, purpose, improved mental health, education and upskilling. We strongly believe that keeping older Australians in meaningful work saves the nation more than it costs. At a time of a ‘skills crisis’, extending the Work Bonus is surely a no-brainer?

National Seniors Budget submission

Additionally we endorse three key aspects of the pre-Budget submission of the National Seniors Association (NSA). The NSA is an active advocate for older Australians and has its finger on the pulse when it comes to their needs. (You can read their submission here). The three initiatives linked to health and aged care that we liked the most are:

  • To provide more support for people to stay in their homes, through 2000 mature age home care traineeships per year.
  • To offer more incentives to those on the cusp of residential care to downsize, by exempting excess sale proceeds from the assets test.
  • Increase Age Pension gifting limits to help older Australians help the younger generation.

As the Rolling Stones told us decades ago, you can’t always get what you want. But if we never speak up, we might miss out entirely. We believe older Australians have worked hard and paid taxes to help create the nation we have today. Surely it’s not too much to ask that they enjoy a productive and dignified retirement?

What do you think?

Whilst there are a wide range of policy areas that senior Australians care about, we have deliberately confined our wish list to items affecting retirement income. 

Is this wish list what you would like to see on May 9 also?

Or have we missed something?

ps We also want to see all older Australians get their Centrelink entitlements. You can check what you should be receiving below.

Check your entitlements here.