Superannuation
The federal government honoured its pre-election promise by not tinkering with super….for the moment.
Start saving for retirement is the message because being a self-funded retiree might be a far better proposition than assuming help from the Commonwealth.
We would not be surprised if a full review of the government’s Retirement Incomes Policy is part of what is taken to the next election.
Think about this, 80% of Australians over 65 who retire, (most with the benefit of concessional super) receive government support, either as a full or part Age Pension or non-cash benefits from the Seniors Health Card including rebates and travel concessions.
It is understandable when the Treasurer says this is not sustainable as Australia ages, and changes to super must happen the question is how soon?
Age Pension
There were significant changes to the future of Age Pensions entitlements when Joe Hockey announced the Age Pension age will rise to 70, from 2035.
Other measures announced include:
- From September 2014, all Pension rises will be indexed to inflation rather than a combination of inflation, the pensioner living cost index and as a percentage of average weekly male earnings.
- Pensioner’s income test tightened, with the maximum cap on income dropping from $46,600 per year to $30,000. Couples will be able to claim the pension while receiving up to $50,000 income reduced from $77,400.
- The age at which people can claim the Age Pension will be raised to 70 for people born after 1966, commencing in 2035.
- The Commonwealth Senior Health Card (CSHC), for seniors who do not qualify for the Age Pension, will have eligibility tightened with untaxed superannuation income being taken into account for the first time.
- The threshold for eligibility for the CSH Card, currently $50,000 per year of earnings, will be indexed with the government saying it is the first time since 2001 it has been raised.
- The Senior Supplementary, paid to people who qualify for the CSHC, will be scrapped after the last payment in June 2014
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