Federal Budget 2009 - Social security and Centrelink

Pension Increases

The base rate of age pension will increase by $30 per week
for single age pensioners from 20 September 2009.
In addition, the four separate allowances (GST, utilities,
telephone/internet and pharmaceuticals) will be combined
into the one “pension supplement” and be paid fortnightly.
The increase in the “pensioner supplement” will be
$2.49 per week for singles and $10.14 per week
(combined) for couples.

Increase in Maximum Age Pension entitlements

The new “pension supplement” will be indexed twice yearly in line with CPI.

Increase in minimum Age Pension age

The qualifying age for the Aged Pension and the Commonwealth Seniors Health Card will be increased to 67 commencing 1 July 2023. A gradual implementation will commence in July 2017.

Changes to pension tests

The current Assets Test will remain, however the Income Test will change. From 20 September 2009 Income Test changes mean that every extra $1 of private income above the allowable income free threshold will reduce the Age Pension benefit by 50c for singles and couples combined. The current reduction is 40c for each extra $1 of income over the income free area.

Work force incentives for people of Age Pension age

The current pension bonus scheme will be closed for new applicants from 20 September 2009. Existing members of the scheme will not be affected and will continue to accrue entitlements.

A new Pensioner “work bonus” will apply from 20 September 2009 with 50% of the first $500 per fortnight of employment income being excluded from the Centrelink Income Test.

Commonwealth Seniors Health Care Card

In the May 2008 Budget, it was proposed that tax-free superannuation pension income and lump sums be included in the adjusted taxable income test for the Commonwealth Seniors Health Care Card. This measure was widely criticised and the Government will not be proceeding, so good news for current Seniors Health Care Card holders who were likely to have lost their benefits from 1 July 2009.

Residential Aged Care Changes

Due to the increase in the Age Pension from 20 September 2009, the maximum daily care fee paid by residents of nursing homes and hostels will increase by $3.20 per day from $33.41 to $36.61. Non-pensioners who are already in aged care will have their daily care fees fixed at the current levels.

In addition residents entering aged care and required to pay an income-tested fee will have to do so from the date of entry. Currently there is a 28 day delay before payment is required.

Published : 13 May 2009