The Federal Government’s October budget made no major announcements about super, with the only change being a plan to expand the eligibility for the downsizer contribution.
For retirees, there were also measures to:
1. More people eligible for downsizer contributions:
The minimum eligibility age for the downsizer contribution will be reduced to age 55 from age 60. The downsizer contribution scheme allows eligible homeowners to contribute up to $300,000 into their super from the proceeds of selling their main home. It’s designed to encourage older Australians to downsize their home sooner and increase the availability of suitable housing for Australian families.
2. Incentives for pensioners to downsize their home:
The proceeds from the sale of a main home will be exempt from the pension asset test for 24 months, increasing from the current 12 months. Further, under the income test the sale proceeds will be subject to the lower 0.25% deeming rate for 24 months after the sale.
3. Encouraging pensioners into the workforce:
Aged and Veterans pensioners will receive a one-off credit of $4,000 to their Work Bonus income bank. This top up will increase the amount pensioners can earn in 2022–23 from $7,800 to $11,800, before their pension is reduced. This means pensioners who want to work or work more can do so without losing their pension.
4. More people eligible for the Commonwealth Seniors Health Card and a freezing of deeming rates:
To address cost of living concerns, from 2022–23, the income threshold for the Commonwealth Seniors Health Card will increase from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples. Social security deeming rates will also be frozen at their current levels for a further two years until 30 June 2024.