BUDGET: Moderate approach to economic growth
There have been no howls of protest over last night's Federal Government 2017/18 Budget announcement, AMP Financial Planner Andrew Heaven of Wealth Partners Financial Solutions reports.
He is calling the budget measured and targeting areas that needed "a bit of care and attention for pensioners".
"There seems to be a focus on investing in Australia through large capital infrastructure projects, which is terrific.
"There is nothing here that we are throwing our hands in the air about.
"I think it incentivises behaviours in people that will help them assist themselves into retirement."
Mr Heaven has identified five key areas of the budget that Seniors should be across.
- For those over 65, if you sell your principal place of residence, you move $300,000 into super regardless of any work test or existing superannuation
- Each member of a couple can put $300,000 into super and not be hit by the $1.6m cap.
"This means that people genuinely looking to downshift, are being incentivised to put their money into an asset that is going to generate income for them for retirement," Mr Heaven said.
- For first home buyers, up to $30,000 by a voluntary contribution into super.
"Anything that encourages kids to get money put away to fund either their retirement or to buy their first home, I think is a good initiative," Mr Heaven said.
Increase in Medicare levy
- The levy has been increased to 2.5%.
- This kicks in for someone who is single with income over $21,655 and for couples with an income over $36,541.
- This only impacts Seniors and pensioners that have a family income over $47,670.
- If you are paying this levy, it's because you have a taxable income.
Energy assistance payment
- $75 one-off for a single and $125 for a couple, if you are in receipt of an Aged Pension or Disability Support Pension or Veterans Pension at June 20, 2017.
Sharpening of residency requirements
- The residency for the Aged Pension have been sharpened.
- From July 1, 2018, you have got to have had 15 years continuous residency, or 10 years residency where five years of that was during your working life.
Reinstatement of Pensioner Concession Card
- The card has been reinstated for those that lost it following the Assets Test tapper changes on January 1, 2017.
"Because of the assets test a lot of people lost their Aged Pension, but they were told they would get the Commonwealth Seniors Health Card.
"The difference between the Commonwealth Seniors Health Card the Pensioners Concession Card is that hearing services were covered under the Pensioners Concession Card and they weren't under the Commonwealth Seniors Health Card.
"I think there was unintended consequences for that there were hearing-impaired.
"Essentially what they have said is if you have lost your Pensioners Concession Card as a result of losing the Aged Pension at 1 January 2017, we are going to reinstate that," he added.
For more financial information from Wealth Partners, go to www.wealthpartners.net.au.