As part of the Federal Government’s 2018 Budget, Treasurer Scott Morrison proposed new spending measures focused on older Australians.
- Expansion of the Pensions Loans Scheme
- New home care facilities
- Expansion of the Pension Work Bonus
- Funding for mental health services and rural areas
Expansion of the Pensions Loans Scheme
The Pension Loans Scheme is a service offered by the Government where eligible pensioners can receive a loan paid in fortnightly instalments, secured against the value of Australian real estate they own.
Repayments of the loan generally occur from the sale proceeds once the house is sold, however the loan can be repaid at any time.
In his speech to Parliament, the Treasurer said: “The Pension Loans Scheme will be opened to all older Australians, including full rate pensioners and self-funded retirees, so they can boost their retirement income by up to $17,800 for a couple, without impacting on their eligibility for the pension or other benefits.”
Currently there are around 1.8m age pensioners who own their own home, including 1.1m who are on the maximum rate age pension. The Government expects this expansion would cost $11m.
New home care facilities
The Federal Government has also proposed $1.6bn funding over four years to help older Australians stay at home, rather than enter nursing homes. This funding would increase home care places by 14,000 with the aim of increasing to 74,000 by 2021-2022.
Expansion of the Pension Work Bonus
Under the Budget’s proposed changes to the Pension Work Bonus, pensioners would be able to earn an extra $1,300 a year without reducing their pension payments.
The bonus would also be extended to self-employed pensioners, who would be able to earn up to $7,800 per year without impacting their pension.
The Treasurer announced $146m to improve access to aged care services in rural regions of Australia and $83m to increase mental health support for residents in aged care facilities, which would focus on depression and loneliness.
The Budget also included the provision of up to $10,000 for employers who take on older Australians.
Keep in mind
Any changes outlined in the Federal Budget must be passed by both the House of Representatives, which is controlled by the government, and the Senate, where proposed expenditures are subject to examination within Senate estimates hearings. This means any proposed cuts or changes outlined above may not necessarily become law.
Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.