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September updates ease cost of living pressures for retirees

4 Oct 2022

Written by

Melanie Dunn

Boost in Age Pension for part or full pensioners

On 20 September 2022 the maximum Age Pension entitlement increased to $1026.50 a fortnight for singles and $1547.60 per couple ($773.80 for each member). The rates are indexed on 20 March and 20 September each year to maintain their value against increases in the cost of living.

The 20 September maximum Age Pension entitlement represents an increase of nearly 4% on the March 2022 rates, bringing the annual increase in maximum Age Pension to over 6%.  Pensioners on a full Age Pension will receive an extra $38.90 per fortnight for a single person and an extra $58.80 per fortnight for a couple (combined).

SMSF retirees who access the Age Pension to supplement their retirement income, either in part or in full, may see an increase in their Age Pension entitlements and this will come through in their first payment after 20 September.

More self-funded retirees to become eligible for cheaper healthcare

There is also good news for SMSF retirees who are not currently entitled to the Age Pension. Legislation was recently introduced into Parliament to increase the Commonwealth Seniors Health Card (CSHC) income test limits to $90,000 a year for a single person and $144,000 a year for couples. The CSHC is a concession card that provides access to cheaper healthcare and some other discounts. Government expect more than 50,000 additional self-funded retirees will be able to access the CHSC card as a result of this change.

The Social Services and Other Legislation Amendment (Lifting the Income Limit for the Commonwealth Seniors Health Card) Bill 2022 is currently before the Senate. The new limits will commence seven days after the Bill receives Royal Assent.

The eligibility test for the CSHC is different to the Age pension in that it does not have an assets test. The Services Australia webpage identifies that to get the CHSC card a person must:

  • be Age Pension age or older
  • meet residence rules
  • not be getting a payment from Centrelink or the Department of Veterans’ Affairs
  • provide a Tax File Number or be exempt from doing so
  • meet identity requirements
  • meet the income test.

Importantly for SMSF retirees, the threshold for the CSHC card will increase from $57,761 to $90,000 for singles and from $92,416 to $144,000 for couples (combined). The increase in thresholds brings an opportunity for you to identify retiree clients who may now become eligible for this valuable concession card. For retirees who are currently entitled to the CSHC card the increase in thresholds also presents those clients who wish to do so with the opportunity to earn more in income and still receive the concessions.

Keep up to date with the latest rates and thresholds using Accurium’s Fast Facts

Accurium has updated our Fast Facts at 20 September 2022 to incorporate these Social Security changes. Our Fast Facts  is an extremely useful guide to keep on hand in respect to current tax, superannuation, social security, retirement and aged care rates and thresholds.

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Disclaimer
This information is general information only and not intended to be financial product advice, investment advice, tax advice or legal advice and should not be relied upon as such. As this information is general in nature it may omit detail that could be significant to your particular circumstances. Scenarios, examples, and comparisons are shown for illustrative purposes only. Certain industry data used may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. Accurium has not independently verified any such data provided by third parties or industry or general publications. No representation or warranty, express or implied, is made as to its fairness, accuracy, correctness, completeness or adequacy. We recommend that individuals seek professional advice before making any financial decisions. This information is intended to assist you as part of your own advice to your client. Use of this information is your responsibility. To the maximum extent permitted by law, Accurium expressly disclaims all liabilities and responsibility in respect of any expenses, losses, damages or costs incurred by any recipient as a result of the use or reliance on the information including, without limitation, any liability arising from fault or negligence or otherwise. While all care has been taken to ensure the information is correct at the time of publishing, superannuation and tax legislation can change from time to time and Accurium is not liable for any loss arising from reliance on this information, including reliance on information that is no longer current. Tax is only one consideration when making a financial decision.
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