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. 

2020 Federal Budget - Social Security and Family Assistance Summary

$250 Economic Support Payments

Effective December 2020 and March 2021

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:

  • Age Pension (including Age Pension (Blind))
  • Carer Allowance*
  • Carer Payment
  • Commonwealth Seniors Health Card
  • Disability Support Pension (including Disability Support Pension (Blind))
  • Double Orphan Pension*
  • DVA Gold Card
  • DVA Payments
  • DVA Seniors Card
  • Family Tax Benefit (fortnightly recipients)*
  • Family Tax Benefit (lump sum recipients)*
  • Pensioner Concession Card (PCC) holders (covers non-income and asset test PCC holders and customers who have an extended entitlement to a PCC even though their payment has stopped).

* 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.

Youth Allowance and ABSTUDY independence test

Effective 1 January 2021

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.

Parental Leave Pay – Work test extension

Effective – Child born or adopted between 22 March 2020 and 31 March 2021

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:

  • not meet the current work test because their employment is impacted by the Coronavirus pandemic, and
  • have a child born or adopted between 22 March 2020 and 31 March 2021. For Parental Leave Pay, the work test period for these parents will be extended from 13 months to 20 months before either the:
  • birth or adoption of their child, or
  • start of their Dad and Partner Pay period.
  • This means work undertaken by the parent before Coronavirus can be counted towards the work test. In the extended 20-month work test period, these parents will need to meet the work test requirements of:
  • 330 hours in a 10-month period, and
  • no more than a 12-week break between work days.

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.

DVA Disability Pensions – exempt for rent assistance and income support payments

Effective – Measures staggered between 1 July 2021 and 20 Sept 2022

Several changes will be made to the DVA Disability Pension including:

  • exempted from the Social Security Act income test
  • exempted from the calculation of rent assistance under the Veterans Entitlement Act
  • renamed Disability Compensation Payment.

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.

Pension Loans Scheme – additional resources 

Effective June 2021 and ongoing

The Government is making the following improvements to the services available to customers regarding the Pensions Loan Scheme:

  • loan calculator to help people test their eligibility and estimate loan balances
  • electronic loan repayments
  • online services to make changes to loan terms and print itemised statements
  • improved access to specialist staff
  • joint online claim for partnered customers
  • ability to complete regular loan reviews online.

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.

Aged Care

More funding for Home Care packages

Effective from 2020-21

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.

Other Measures

Digital skills for older Australians

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.

Pharmaceutical Benefits Scheme (PBS)

The Government has proposed a few measures regarding the PBS from 2020-21, including:

  • implementing a revised and improved approach to the administration of PBS rebate receipts associated with medicines that have Special Pricing Arrangements; and
  • providing over four years new and amended listings on the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS).

The PBS is available for clients receiving the Pensioner Concession Card, Health Care Card, Low Income Health Care Card and Commonwealth Seniors Health Card.

We're here to help

If you have any questions or concerns about the proposals from the Federal budget announcements, please contact your Ulton Advisor to discuss.

Learn more

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.

Individual_Summary   Business_Summary   Superannuation_Summary   Social_Security_Summary   Economy_Summary   


Sources:

https://www.servicesaustralia.gov.au/individuals/services/centrelink/pension-loans-scheme

https://www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=s1269

https://mk0smsfassociatcb4hf.kinstacdn.com/wp-content/uploads/2020/10/SMSF-Association-Federal-Budget-20-21-Summary.pdf

https://www3.colonialfirststate.com.au/content/dam/colonial-first-state/docs/adviser/campaign/firstech-2020-federal-budget-briefing-paper.pdf

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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