Budget 2024: A band aid on a broken leg for seniors

The lynchpin of 2024 Federal Budget was the tax cuts which mean anyone earning less than $146,000 in taxable income will receive a bigger cut than previously legislated, while those earning more will receive a smaller cut. Given that most seniors don’t pay tax (or pay very little) the tax cuts are unlikely to make any material difference.

This article was written by Australian Carers Guide Contributor Rachel Lane.

For seniors the Budget measures of interest include:

$300 off your power bill

The $300 reduction in power bills is for every household (not just seniors), with no means test applied. The $300 is a rebate rather than a payment, so it will be deducted from the bill. It will be paid in quarterly installments, not all in one hit so expect your next bill to be $75 cheaper not $300 cheaper.

PBS Price Freeze

The price of PBS medications will be frozen at $31.60 for everyone with a Medicare card for one year. While for pensioners and concession card holders the PBS price will be frozen at $7.70 for five years.

Increase to Commonwealth Rent Assistance

The maximum Commonwealth Rent Assistance payment will be increased by 10 per cent from September. The increase will benefit around 1 million recipients as rent assistance can apply to private rentals, retirement villages, granny flats and land lease communities.

The current maximum rent assistance payment for a single person is $188.20 a fortnight and for couples it is $177.20. The increase would see payments increase to $207.02 a fortnight and $194.92 a fortnight with indexation added on top.

Freezing Deeming Rates

The rates of 0.25% on the lower assets and 2.25% on the assets above will be extended to 30 June 2025. The lower assets for singles are currently $60,400 and for couples $100,200. Assets that are subject to deeming include bank accounts, term deposits, shares, superannuation account balances and gifts in excess of the allowed amount ($10,000 per financial year/$30,000 in 5 years).

Freezing the deeming rates helps pensioners affected by the income test, people claiming the Commonwealth Seniors Health Card and people accessing home care packages and residential aged care (whether they are pensioner or self funded retirees) as deeming is used for calculating the means test.

Greater flexibility for Carers

Around 31,000 carers receiving Carers Payment will be given greater flexibility to undertake work, study or volunteer from 20 March 2025, when the current 25 hour weekly participation limits change to 100 hours over a four-week period instead. The participation limit will also no longer include study, volunteering and travel time – it will only apply to employment.

In addition, those receiving Carers Payment who exceed the participation limit or their allowable temporary cessation of care days will have their payments suspended for up to six months, rather than cancelled. Carers will also be able to use single temporary cessation of care days where they exceed the participation limit, rather than the current seven day minimum.

Extra Home Care Packages

An additional 24,100 home care packages will be released in 2024–25.

The latest Home Care Package data report shows that at 31 December 2023, there were 51,044 people waiting for a Home Care Package at their approved level, representing a significant increase (35%) from December 2022 when the waitlist was 37,894.

The latest recorded wait times (March 2024) show that someone with a medium priority is waiting around 1 month for a level 1 package, 3-6 months for a level 2, 9-12 months for level 3 and 6-9 months for level 4.

Deferring commencement of the new Aged Care Act

As part of the Budget measures the government announced the commencement of the new Aged Care Act will be deferred until 1 July 2025. The new Act has been a source of scrutiny for the Albanese government with the draft act being circulated in the days before Christmas 2023 without details of the fees or funding. The government’s aged care taskforce provided a suite of recommendations to change the fees and funding arrangements in November 2023, however the report was only released in March and the government are still considering their response.

Not all of the recommendations of the taskforce would require new legislation, which means we could see changes to the cost of aged care before next July (although I expect that depends on how sensitive voters would be to them).

The 2024 Federal Budget has put a band aid on a broken leg when it comes to senior Australians. In the midst of a housing crisis, when the average rent price is now over $600 per week, the increase to rent assistance of $10 per week starting in 4 months time is too little too late. It’s a similar story with home care packages, there are already more than double the number of people waiting for a package in than they have announced extra packages for in the coming year.

The ability to access aged care should not be a lottery where you hope that you are one of the “lucky ones” that receives the care you need before you are forced into an aged care home or worse. While you are unlikely to hear much criticism from senior Australians about the budget, many will be grateful for the small relief provided, the reality is the government can and should do better.

About Rachel Lane

Rachel Lane explains the ins and outs of retirement living and aged care like no-one else. Her ability to break down complex arrangements and explain the pros and cons is embraced by millions of readers and she frequently speaks on radio and television. As Principal of Aged Care Gurus she oversees a national network of specialist financial advisers. Rachel holds a Masters in Financial Planning and has written several books including the best seller “Aged Care, Who Cares?”