On 21st May 2022 Australians decided to have a change of the government, and after almost 10 years of the Liberal party being in power,
now Australians voted Labor to take control and to govern Australia into the future.
This channel is most certainly a non-political one, and I will post no opinions or judgement of the last election outcome, however
as a financial planner, I will provide you with my point of view as to the benefits or negatives of policies and rules being introduced,
that might impact financially your retirement.
And today I will give you 4 election proposals introduced by the Labor Party that are to be introduced very soon
and I will tell you what impact it will have on your retirement.
My name is Katherine Isbrandt from About Retirement, I am Certified Financial Planner and you are watching About Retirement TV,
the place to watch and follow to get all the financial information you need if you are preparing for retirement or if you have already retired.
So hit that LIKE and SUBSCRIBE button not to miss my next video and let's get started.
Information introduced today is based on details announced during the election campaign and they are proposals at this point in time,
and legislation will need to be passed for those measures to take effect.
However, considering that the opposition has been supporting those proposals, or they had a very similar version of those proposals,
it is expected that most of them will be introduced from 1st July 2022.
1. Freezing of Deeming Rates
Considering changes within the world economy and ongoing increase of inflation, that impact our interest rates,
I have already been sharing my concern with retirees, to expect the increase of deeming rates, which would be a negative outcome for most pensioners,
especially those that are on part Age Pension due to Income Test.
So the proposal of freezing deeming rates for a period of 2 years until 2024 is most welcomed and very positive for all retirees.
And now with such volatility of the market your superannuation, your pension funds providing negative returns,
so the balance of super or your income streams might have already reduced, many more retirees might be eligible for Age Pension.
So this is worth checking and if unsure, you need to speak to a specialist retirement planner
to see if there is any chance for you to be eligible for part Age Pension or to have your Age Pension increased.
Going back to the freezing story, the proposal is to continue the current level of deeming rates, regardless of the actual market conditions, so as a refresher:
If you are a single pensioner, the first $53,600 of your money is deemed at the rate of 0.25%,
Any money above that balance of $53,600 will be deemed at the rate of 2.25%
For a couple and that includes the couple that is separated due to illness the first $89,000 will be deemed at 0.25%
and any money above $89,000 at the rate of 2.25%
Therefore we see this proposal as a huge benefit for retirees for those next 2 years
and this proposal if legislated, and it is currently supported by the opposition, it is expected to commence on 1st July 2022.
2. Increasing eligibility for the Commonwealth Seniors Health Card
The new government also wants to relax the eligibility for the Commonwealth Seniors Health Card,
which if legislated will allow an extra 50,000 Australians age 67 or older to gain access to this valuable card.
I have already created a video explaining the full range of benefits of the Commonwealth Seniors Health Card:
Centrelink Concession Cards for your Retirement, so please feel free to watch it now.
The card for self-funded retirees who are not eligible for the Age Pension, therefore not eligible for the Pensioner HealthCare Card.
This card is Income Tested only and those are proposed changes:
if you are single the current income limit is $57,761 which is proposed to change to $90,000
For a couple the current limit of income is $92,416 and the proposed limit $144,000
and illness separated couple current limit is $115,522 while the proposed is $180,000
This is another great proposal that is actually supported by the opposition, so we believe it is very likely it will commence from 1st July 2022.
3. Extending the exemption on home sale proceeds
Currently when you sell your family home, the rules are that Centrelink will exempt from the Assets Test
the portion of funds that you intend to use for purchase or build of a new primary residence
That exemption is for the period of 12 months.
Please remember though, that there is no Income Test exemption,
therefore the full balance from the sale of your family home will be assessed under the Income Test,
which could impact on your Age Pension eligibility, or the level of Age Pension received.
So please make sure that you check all those details before you actually sell your home and put yourself in a dire situation.
But there is a proposal to extend the 12 months up to 24 months, giving pensioners more room for those big changes as home downsizing.
The proposed commencement of this exemption is 1st January 2023.
4. Cutting the cost of prescription medicine
Given that older people are more likely to use more medication than young people,
obtaining medication that is included in the Pharmaceutical Benefits Scheme is very beneficial,
as cost of such medicine has been significantly reduced.
Currently the cost of drugs under the PBS is capped at $42.50. The Coalition promised to reduce it down to $32.50,
while Labour promised to reduce it down to $30.00 per prescription filled.
Given both parties agreed on that measure, it is expected for the reduction to be introduced from 1st January 2023.
Here we go, 4 positive measures to look forward to on your retirement.
If you found this video of interest and benefit, please give it a LIKE and SUBSCRIBE not to miss my next video.
And to find even more information how to get ready for your retirement, whether you are 2 or 10 years away from the big day,
or if you have retired already, visit my website AboutRetirement.com.au
and while you are there don't forget to sign up to my newsletter to be always updated will all the changes that can impact your retirement.
And as you can see, today's video is a good example of such changes.
And now as usual my further recommendations.
The first is the combination of videos about Age Pension
starting with the most popular: 9 ways to legally hide money from Centrelink Age Pension.
The second recommendation the link to today’s mentioned video
Centrelink Concession Cards for your Retirement.
Thanks for watching and I will be talking to you in my next video.
Bye for now!