Budget restores concessions for near-100,000 pensioners

The government will restore the Pensioner Concession Card for older Aussies who lost it when the pension asset thresholds were cut in January.

The change was announced in the 2017 Budget unveiled by Treasurer Scott Morrison tonight.

Reinstating the concession card means that an additional 92,000 people will be able to access discounts, including subsidised hearing services provided by the federal government.

“As a result, they will regain access to state and territory based concessions that were withdrawn after the change,” Morrison said in his Budget speech to parliament.

Housing

As expected, the Budget also introduced greater flexibility on ‘downsizing’ by senior Australians, in the hope that this will help free up housing stock and cool home prices.  

“Being unable to invest the proceeds of selling their home into superannuation discourages some older people from downsizing,” according to the just-released Budget documents on housing affordability.

“Encouraging downsizing should enable more effective use of the housing stock by freeing up larger homes for younger, growing families.”

From July 1, 2018, people aged 65 and over will be able to make a post-tax contribution into their super of up to $300,000 from the proceeds of the sale of their family home. The $300,000 cap will be per person, so a couple could contribute $600,000 to their super under the new ‘downsizing’ rules.

To do so, however, they must have lived in the home for at least 10 years, and the increased super pot will be subject to the Age Pension assets test.

And despite fears that the use of negative gearing by property investors could be under threat, Morrison ruled out any change on the rules.

“Mum and dad investors will continue to be able to use negative gearing, supporting the supply of rental housing and placing downward pressure on rents,” he said.

Healthcare

Morrison announced the launch of a Medicare Guarantee Fund, which he said was designed to ensure that the public health system had guaranteed funding.

The cash pool will be funded by the Medicare Levy on high-income earners, as well as broader income tax revenue.

The Treasurer also set aside $1 billion over the next four years to cover the cost of lifting the long-running freeze of the Medicare Benefits Schedule, which means that the amount Medicare will cover of medical costs will gradually rise.

In addition, the government will reinstate bulk billing incentives for diagnostic imaging and pathology services, and cut the Pharmaceuticals benefits co-payments charge.

And $1.2 billion in new medicines will be made available, including for people with chronic heart failure, which will be funded by an agreement with the pharmaceuticals companies.

Finances

Morrison unveiled a levy on the big banks’ liabilities from July 1, but said that that liability calculation would not take into account customer deposits of less than $250,000. Nor would it be applied to superannuation funds or insurance companies.

“Unlike the previous bank deposit tax, this is specifically not a levy on pensioners’ and others’ ordinary deposit accounts, nor is it on home loan,” the Treasurer said.

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