Federal Budget Australia 2024-25

Federal Treasurer Jim Chalmers has handed down the May 2024-2025 Federal Budget.  There weren’t a lot of surprises but there are a couple of nice bonuses for older Australians.  Before we start, it’s important to note that these are only proposals.  Most are likely to get through Parliament but aren’t guaranteed until they are legislated.   We aren’t covering everything, just our take on what’s in it for older Australians. 

What were we hoping for?

Our team’s budget wishlist a few weeks ago included 

  • Centrelink wait times – more money to hire and train staff to help address the exceptionally long wait times people are experiencing to have their claims assessed
  • Make it easier for older Australians to earn a part time income by simplifying the work bonus rules to exclude the first $11,800 of employment income from the income test.  
  • Change the income test so deeming rates are not applied to financial assets below the minimum asset threshold
  • Index rental support so it is inline with rental increases.  It has dropped a long way behind in recent years
  • Increase the limit on the Home Equity Access Scheme (HEAS) so that people can get more than 1.5 times the Age Pension.  A big renovation for instance could cost a lot more than this. 
  • Keep deeming rates at the current level.  The last thing Age Pensioners need is an increase that could cut their Age Pension entitlements or their eligibility.
  • Increase the work bonus for singles. 

What actually happened?

As with most wishlists we didn’t get everything we wanted. There are many competing priorities and a limited pool of money to pay for it all. There is a real trade off between providing cost of living relief without fueling further inflation and potential interest rate rises.  This also wasn’t a budget that had a strong focus on older Australians.  But there were a few wins.  Here is our summary:

  • Energy relief – $3.5 billion to be spent on energy relief. There will be a $300 rebate for all Australian households and $325 for businesses starting from 1 July 2024.  The rebate totalling $300 will be paid quarterly on bills over the year.  For retirees the relief will be particularly welcome. 
  • Rent assistance will increase by a further 10%.  For those receiving rent assistance this will amount to an average of $19 a fortnight.  
  • Freezing cost of medicines.  There will be a cap of $31.60 for prescriptions on the Pharmaceutical Benefits Scheme.  For pensioners and concession card holders this will be capped at $7.70 for the next five years.   
  • Wages increase for Aged Care workers
  • Deeming rates will be frozen for another 12 months until 30 June 2025.  This was tipped by many commentators to increase. Freezing deeming rates will benefit nearly one million people receiving social security support. It also means that those who are currently close to the income test limit can assume their Age Pension entitlement is safe from deeming changes impacting their entitlements for the time being.

While we didn’t get everything we would have liked the anticipated increase in deeming rates didn’t occur and energy rebates, freezing of medicine costs and rent assistance are all very welcome. And remember, the Age Pension and Commonwealth Seniors Health Cards (CSHC) still provide solid and dependable support to most older Australlans so make sure you are getting all your entitlements. A Maximise Your Entitlements consultation can help you to assess if you are getting what you should and whether any changes to improve your circumstances

So what did you think about the budget?  Do you think it was fair?  What did you like and what didn’t you like?