How $6 billion worth of budget savings will affect you

It’s unlikely you’ll have had time to read the 250-plus pages of legislation plus that 400-plus-page explanatory statement that details the Government’s $6.3 billion ‘omnibus’ savings bill, which was passed in the Lower House on September 14.

There are 20 cost-cutting measures, and while it’s great for those who are worried about Australia’s growing debt level, here’s how the measures might impact you.

Concerned about your health?

It will be more difficult to avoid paying the Medicare Level Surcharge or the the Private Health Insurance Rebate with income cut-offs not being indexed for three years. According to Scott Morrison, this measure will save $381 million.

Hospital users might be interested to know that the Rudd-Gillard era national Health Performance Authority has been abolished. This authority was producing detailed reports comparing individual hospital performance, and the responsibility now falls to the Australian Institute of Health and Welfare, which has also assumed responsibility for the MyHospitals and MyHealthyCommunity websites. The move saves $88.6 million.

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What if you have bad teeth? Well the Government has reviewed the way it will spend money on dental services, but it will save around $52.4 million.

What about pensioners?

It’s bad news if you happen to be a new resident of an aged care facility and have retained your family home to rent out as any rental income you earn will now be included in the income test for the pension. This measure will save $117.1 million.

Also, aged care homes are expected to have less money to spend on residents after the Government decided to crackdown on what it says is “over-claiming for government subsidies” by providers who falsely pretend residents have higher needs than they actually do. You’re looking at a saving of $80.5 million on the budget.

Do you get welfare payments?

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Some low income earners will keep their carbon tax compensation. The Government had plans to save around $1.3 billion by stopping payments for new welfare recipients, but Labor stepped in to preserve it for sometime. This includes pensioners who are unemployed.

You will however, miss out on the supplement if you are a new recipient of the Commonwealth Seniors Health Card, and Family Tax Benefit Part A or Part B.

You might recall that the Energy Supplement was introduced to help with the higher cost of electricity and other impacts of the now-axed carbon tax. Only those who are in the welfare system before September 20 will continue to get the $4 a week payment. Those who enter between September 20, 2016 and March 20, 2017 will temporarily receive the compensation.

Are you a veteran?

If you’re an injured or sick defence force staffer — past or present — you’ll only be able to appeal decisions on your compensation to one tribunal, now that the appeals process is to be streamlined. It’s a saving of $3.6 million for the Government.

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What about super?

One of the most controversial parts of its changes to superannuation, the $500,000 lifetime non-concessional cap on contributions, has been scrapped and replaced with a $100,000 annual maximum. The change cuts the existing annual non-concessional contributions cap of $180,000 per year by $80,000 and will cost the budget $400 million in revenue.

If you are under the age of 65 you will still be able to ‘bring forward’ three years’ worth of non-concessional contributions.

You will no longer be eligible to make non-concessional contributions from July 1, 2017 if your super balance is more than $1.6 million.

Do you know how you will be affected by the budget savings? What concerns do you have about the changes?

Important information: The information provided on this website is of a general nature and for information purposes only. It does not take into account your objectives, financial situation or needs. It is not financial product advice and must not be relied upon as such. Before making any financial decision you should determine whether the information is appropriate in terms of your particular circumstances and seek advice from an independent licensed financial services professional.