With the release of the federal budget, retirees and those thinking about leaving the workforce soon can expect to benefit from slight tweaks to existing programs.
One of the challenges identified in the papers for older Australians was getting them to take advantage of current schemes aiming to give them a bit of extra cash.
According to the budget papers, “assistance to the aged” will cost taxpayers about $77.16 billion this financial year, increasing by $89.6 billion by 2024-25 as the number of pensioners increases.
Boost your retirement income
For those looking to downsize from July 1, Australians over 60 can make a one-off, post-tax contribution of up to $300,000 per person (or $600,000 per couple) to their super when they sell their home.
The budget papers say the scheme will enable empty-nesters to “consider downsizing to a home that better suits their needs, thereby freeing up the stock of larger homes for younger families”.
Older Australians who own their home but don’t want to sell can also boost their retirement income.
Tweaks to the Pension Loan Scheme (PLS) to allow lump-sum payments now mean that eligible singles and couples could put away almost $200,000 more each year. The PLS works in the opposite way to a mortgage and is available to Australians claiming the age pension as well as self-funded retirees.
Retired homeowners can also borrow against the value of the property, with the balance of the loan being paid out when the property is sold.
“Eligible people will be able to receive a maximum lump-sum advance payment equal to 50 percent of the maximum age pension,” the budget papers say, which works out to around $12,385 for singles and $18,670 for couples.
If you haven’t heard about the PLS, the budget papers have taken that into account too. The government is allocating $21.2 million to “improve uptake” of the scheme, including spending funds on “public messaging and branding”.
Investment in aged care
Following the royal commission into aged care, an extra $17.7 billion will be invested into the sector over the next five years.
The cash will be spent on 80,000 new home care packages in the next two years, despite findings from the commission saying that more than 100,000 older Australians were waiting for one as of June 2020.
Those living in residential care will see an extra $10 spent per resident per day from July 1, in line with recommendations from the royal commission.
Funds are also being poured into improving the sector, with $216 million spent over three years for training people to sector and $798 million over five years going towards respite care and support services.
The government is also investing in a new star rating system, meaning that it will become much easier to assess your aged care options.
This article originally appeared on Over60.