IN a bid to soften the financial fallout from the coronavirus pandemic, this week the federal government announced its second economic stimulus package, worth $189 billion over the next three years. National Seniors Australia explain what’s in it for the over-55s:
The government will halve the drawdown rate, as was done during the GFC to stop the erosion of superannuation in retirement during this extraordinary time.
Under the superannuation rules, pension accounts are required to pay a minimum amount based on age.
During the 2019/20 to 2020/21 financial years, superannuants will only have to withdraw half of what they would normally withdraw as income each year, allowing them to preserve their capital at a time when they have had a large hit to their savings.
This will hopefully reduce pressure on retirees over the long term and decrease their reliance on the pension in the future.
Another measure to help those of working age is a temporary change to superannuation rules regarding payment of superannuation.
For the current financial year 2019-20 and the next 2020-21, the government will allow individuals affected by COVID-19 to access up to $10,000 of their own superannuation each year.
Individuals will not need to pay tax on amounts released and the money will not affect Centrelink or Veterans’ Affairs payments.
This will help those struggling to meet living costs through loss of income during this period.
The government has announced a second one-off stimulus payment for Centrelink payment recipients and for eligible concession card recipients.
This second payment of $750 will be delivered to pensioners and other payment recipients on July 13, 2020.
Those eligible for the payment include recipients of the Age Pension, Carers Allowance, Carers Payment or Veterans Service Pension. It will also go to anyone with a Pensioner Concession Card, Commonwealth Seniors Health Card or a Veteran Gold Card.
You’ll only get one payment, even if you get more than one qualifying payment or card.
The upper deeming rate of 2.5 per cent and the lower deeming rate of 0.5 per ent will be reduced by 0.25 per cent. The new upper deeming rate will be 2.25 per cent. The new lower deeming rate will be 0.25 per cent.
Deeming rates are used to estimate the income you receive from your financial assets.
Centrelink uses both the income and the assets test to calculate your pension entitlement, using the test that gives the lower pension amount when calculating your payment. Not everyone will be affected by the deeming rate change because many people fall under the assets tests.
State steps up
THE McGowan government has also announced extra financial support available for WA seniors during the coronavirus crisis:
Energy Assistance Payments are to be doubled in 2020/21 to support pensioners.
The payment will increase from $300 to $600 for eligible concession card-holders.
The EAP supports eligible concession card holders towards the cost of their energy bill each year.
Household fees and charges have also been frozen, effective immediately and in effect until at least July 1, 2021.
The freeze will apply to the entire ‘household basket’ including electricity, water, motor vehicle charges, emergency services levy and public transport fares, meaning rates will stay the same until at least July 1, 2021.
Coles and Woolworths have been granted temporary extended trading hours to help pensioners, the elderly and people with disabilities.
The special arrangements which will be managed by Coles and Woolworths will allow pensioners, the elderly and people with disabilities to shop without other people in the store.
Woolworths: Monday to Saturday: 7am – 8am Sunday: 10am – 11am
Coles: Monday to Friday 7am – 8am
Additional government support is becoming available all the time, so to keep up-to-date on the latest by logging on to ww2.health.wa.gov.au/Articles/A_E/CoronavirusSENIORS