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We have summarised the key points from the 2020-2021 budget, that we believe will have the most impact on our clients.
Please keep in mind that all budget measures are proposals and will require the passage of legislation to become effective.
The Government is providing two separate one-off Economic Support Payments of $250 to individuals receiving eligible income support payments or concession cards.
The $250 payments will be paid progressively from December 2020 and March 2021.
Eligible individuals must be in receipt of the following payments as at 27 November 2020 and/or 26 February 2021:
* if they are not receiving a primary income support payment.
Note: if you are eligible for the Coronavirus Supplement of $250 per fortnight (e.g. JobSeeker Payment recipients) then you are not eligible for the one-off $250 Economic Support. If you only hold a Low Income Health Care Card, you will not qualify for the one-off $250 Economic Support.
The Government is making a temporary change to the criteria used to determine independence for Youth Allowance and ABSTUDY. The independence test is important as young people who are considered independent from their parents are not subject to the Parental Income Test. There are a number of ways of meeting the independence test; however, a common method is to meet the workforce participation criteria which require young people to work 30 hours per week for at least 18 months within a two-year period. Under this temporary measure, from 1 January 2021 all Youth Allowance and ABSTUDY applicants will automatically be deemed to have worked over the six-month period from 25 March 2020 to 24 September 2020.
This assists young people to meet the workforce participation criteria even if they were unable to gain work due to the impact of Coronavirus in 2020.
The Government is temporarily extending the work test for Paid Parental Leave and Dad and Partner Pay from 13 months to 20 months, for those affected by the Coronavirus pandemic.
To be eligible for the extended work test, the individual must:
Services Australia will contact parents who had a claim for Parental Leave Pay or Dad and Partner Pay rejected from 22 March 2020 due to not meeting the work test, to invite them to test their eligibility under the revised rules. If you believe you fit into this category, it is worthwhile immediately contacting Centrelink to have your situation reviewed.
Several changes will be made to the DVA Disability Pension including:
Under current rules, those who receive a reduction in social security payments due to the inclusion of the DVA Disability Pension under the income test receive a payment called DFISA (Defence Force Income Support Allowance) to compensate for the reduction. If the proposal to exempt the DVA Disability Pension from the social security income test is legislated, DFISA can be abolished as it is no longer required.
The Government is making the following improvements to the services available to customers regarding the Pensions Loan Scheme:
The Pension Loan Scheme is an underutilised Scheme that lets older Australians access a voluntary non-taxable fortnightly loan from Centrelink. The maximum amount of the loan is 1.5 times the maximum payment rate of your eligible pension each fortnight. The loan may be secured against property you own and outstanding loan balances may be repaid from your Estate. The new measures will make it easier to understand and apply the scheme.
The Government will improve waiting times for Home Care Packages by increasing funding for 23,000 additional home care packages across all package levels over four years from 2020-2021. In addition, improvements will be made to navigating the aged care system including classifying the care needs of older Australians through one unified system.
Both of these measures are very welcome, however the 23,000 additional packages probably falls well short of what is required. The impact of the Corona Virus on Aged Care homes, has really shown the benefits of remaining in your own home for as long as possible and Home Care packages allow this to happen.
The Government will provide the Be Connected Program until 2023-24 to support Australians aged over 50 to gain the skills they need to participate in the digital economy.
The Government has proposed a few measures regarding the PBS from 2020-21, including:
The PBS is available for clients receiving the Pensioner Concession Card, Health Care Card, Low Income Health Care Card and Commonwealth Seniors Health Card.
If you have any questions or concerns about the proposals from the Federal budget announcements, please contact your Ulton Advisor to discuss.
Want to learn more about the other announcements from the 2020 budget? We have broken the full budget down into 6 main categories for usability.
Sources:
https://www.servicesaustralia.gov.au/individuals/services/centrelink/pension-loans-scheme
Wealth Management Disclaimer
Our liability is limited by a scheme approved under Professional Standards Legislation, except where we provide financial services as an authorised representative of Ulton Wealth Services Pty Ltd (holder of Australian Financial Services License No. 497721).
This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individuals needs and you should seek advice from your financial adviser before making any investment decisions. Sub Authorised Representative No.245052 of Ulton Wealth Management Pty Ltd. All Ulton Wealth Managers can provide financial services as Sub-Authorised Representatives of Ulton Wealth Management Pty Ltd. ABN 73 168 815 450 | Corporate Authorised Representative 460875 of Ulton Wealth Services Pty Ltd | ABN 86 614 308 628 | AFSL 497721.
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