UPDATE: How the Federal Budget will impact Aussie pensioners
Australians on low and middle-incomes will get tax cuts worth up to $10.50 a week in the new Federal Budget that was announced this week.
The ABC reports the tax relief will be given by an increase to the Low Income Tax Offset (LITO) which will more than double to $1,000. At the moment, the LITO is worth $445 a year for people earning below $37,000 annually. It gradually reduces and cuts out when people earn $66,667 a year. It will be extended to people on incomes of about $90,000 a year but the rebate will still gradually decrease the more a person earns.
That will mean an extra $10.50 a week for people on the maximum benefit, at a cost of around $4-5 billion annually.
Treasurer Scott Morrison was forced to defend himself against accusations the cuts will only be sufficient for a “burger and milkshake”.
Mr Morrison told Nine News on Sunday: “I’m not going to pretend that these are going to be mammoth tax cuts, or anything like that, that wouldn’t be responsible. They will be what is affordable, they will be real, and they will be within what the Budget can afford.”
For Aussies who are worried about increasing power bills, the government has pledged $41.5 million over seven years to ensure reliable and affordable energy. The National Energy Security Board estimates yearly power bills will be reduced for the average household by $400 by 2020 under the government’s national energy guarantee. The government will also ban misleading discounting priced by electricity retailers.
To combat age discrimination, employers will receive a $10,000 wage subsidy after hiring senior Australians.
A significant change coming to the Pension Loans Scheme is that it will be opened to all older Australians, including full-rate pensioners and self-funded retirees.
This will allow Aussie seniors to boost their retirement income by up to $17,800 per couple, without losing the pension or benefits.
The Pension Work Bonus will be extended, allowing pensioners to earn an additional $1,300 a year without impacting their pension payments. It will now include self-employed Aussies who can now earn up to $7,800 a year.
The budget will also help older Australians remain at home instead of in care, with the number of home care places to increase by 14,000 over four years at a cost of $1.6 billion.
By 2021-22, more than 74,000 home care places will be available. There will also be a $146 million cash injection to allow rural areas to have access to aged care.
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