2020 Budget – What’s in it for seniors?

Spending on aged care and retiree bonuses were the main feature for seniors in this year’s Federal Budget, but is it enough?

National Seniors Chief Advocate Ian Henschke has described this year’s Federal Budget as a “missed opportunity” for older Australians.

Mr Henschke was in Canberra and was briefed on the Budget on Tuesday night.

Aged care

The biggest announcement for seniors in the budget is $1.6 billion dollars to fund 23,000 additional home care packages.

That’s in the face of a waiting list of around 100,000 older Australians.

“The waiting list has been described by our very own CEO, Professor John McCallum as a ‘running sore’ and this announcement is a band aid which barely covers the wound,” Mr Henschke said.

“The Royal Commission into Aged Care was told to properly address the waiting list the Department of Health would have to spend between $2 billion and $2.5 billion per year.

While the extra $1.6 billion is a good down payment on fixing the home care wait list, it was disappointing the budget did little to solve the systemic problems in residential aged care.

“Creating more training for aged care staff and providers is a good start but we don’t know how many employees will benefit from the $11.3 million announcement.”

“What we were hoping to see were more measures to make aged care providers more accountable.”

Measures for retirees

While welcoming the two payments of $250 to aged pensioners and Commonwealth Senior Health Card holders, Mr Henschke says the pension remains too low to live on especially for those paying rent.

“In our budget submission we called for an increase in Commonwealth Rent Assistance (CRA), sadly this has been ignored.

“So too was our campaign to have the Pension Loan Scheme (PLS) interest rate of 4.5% lowered,” Mr Henschke said.

“This is a missed opportunity to help older Australian access their home equity to help have a better life, stimulate the economy and assist in paying for their own care.”

Acknowledging the earlier cuts to deeming rates (used to deem what a pensioner earns on their savings), Mr Henschke expressed disappointment that the upper deeming rate of 2.25% remains.

“All we got tonight was just a re-announcement of the earlier measures to bring down the upper rate, but no one I know is getting a savings return of 2.25%.”

Self-funded retirees

Many self-funded retirees will benefit from the two bonus payments totalling $500 if they are Commonwealth Seniors Health Card holders and they will also continue to benefit from the halving of the superannuation draw down rate for this financial year.

“We welcomed the reduction of the superannuation draw down rate earlier in the year,” Mr Henschke said.

“What we’d like to see now, is the government’s response to the Retirement Income Review which was called to address systemic problems in the retirement income system which have now been exposed by COVID-19.”

"Issues such as the unfair assets test taper rate need to be rectified to ensure that older Australians are not discouraged from saving more to fund their own retirement."

Other Measures

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