It’s that time of year where the Government adjusts the Age Pension and 4.5 million Aussies receiving welfare payments are set to see their allowance increase from March 20.
The Minister for Families and Social Services Paul Fletcher announced on Tuesday that people currently receiving the Age Pension, Disability Support Pension and Carer Payment will see an increase to their pay in two weeks, while there’s also been a boost for people receiving Newstart, Widow and Sickness Allowance.
As a result of the March indexation, pension payments for the Age Pension, Disability Support Pension and Carer Payment will increase by $9.90 a fortnight to $926.20 for singles and by $14.80 a fortnight to $1,396.20 for couples combined. While it’s not a huge increase, every dollar counts for people who are on the pension. These rates include Pension Supplement and Energy Supplement.
People receiving Newstart Allowance, Widow Allowance and Sickness Allowance will see their fortnightly pay increase by $5.50 to $564.50, while members of a couple will see an increase of $5.00 a fortnight to $509.60 each.
More than 350,000 Australian pensioners’ hip pockets were hit when the Aged Pension asset test changes came into effect in 2017.
With home ownership long viewed as an investment for the future, for some pensioners, downsizing the family home could be a crucial factor to free up much-needed funds and retain financial independence.
Over 55s finance expert and author Rachel Lane said now was an opportune time for seniors to re-evaluate their finances and think about what lifestyle changes could better prepare them for the future.
“It’s incredibly important for seniors to understand what financial impact the changes will have, based on their means. Those with assets above the new thresholds are likely to see their pension reduced – and those whose assets exceed the new cut off limit will lose their pension entirely,” Ms Lane said.
“Those who opt to live on the interest generated from their savings to fund their health, wellbeing and lifestyle in retirement, may be impacted as interest rates drop.
“Downsizing to free up assets maximises finances and by being fully aware of these options, outside of the Aged Pension, over 55s may find themselves better off.
“Land lease communities that cater to over 55s offer a variety of benefits, such as no stamp duty fees, entry or exit fees, which contributes to more money in pensioners’ pockets.”
Ingenia Chief Operating Officer Nikki Fisher said it was incredibly important for over 55s to understand the potential impact these changes could have, to limit financial stress long-term and look at options to keep themselves financially fit.
“It’s important people are aware of their financial standing as the changes are implemented and options available to maximise their finances,” Ms Fisher said.
“People need to look at more options to maximise their lifestyle, like those who look to downsize and relocate to an over 55s lifestyle community often pay less for their new home, which provides them with more capital to fund their senior years.
“A recent report – Adequacy of the Age Pension in Australia, commissioned by the Benevolent Society and Per Capita – highlighted just how dire it is for some pensioners out there, with a third living in poverty, with home ownership one of the biggest factors that contributed to financial wellbeing.”
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