A number of government changes have come into place in 2019/20. Some of which are long term planned changes, together with a temporary change in response to the economic impact of corona virus.
Temporary halving of the minimum draw down rate.
This is a government response due to corona virus - giving members that can manage reduced super pension income in the 2019/20 and 2020/21 financial years the opportunity to retain funds in their Pension account at a time of economic downturn.
Details of age based limits can be found here.
Work Bonus and Work Bonus Income Bank
From 1 July 2019 retirees can earn an additional $300 per fortnight without affecting their age pension. This is on top of the income test free area which for single pensioners is $174 per fortnight and couples (combined income) $308 per fortnight. Significantly this additional income amount is ‘banked’ which means any unused part of the $300 per fortnight can be accrued up to $7,800 and offset against future income. Accrued amounts are not time limited and can be carried forward across years.
Lowering of deeming rates
Over the year on 12 March and 1 May 2020 to an upper rate of 2.25% and a lower rate of 0.25%. Deeming is the method by which the government calculates the rate of earning of money invested in financial assets for the purpose of eligibility for the age pension regardless of actual amounts earned.
Voluntary contributions
Are now permitted for retirees aged 67–74 in their first year of retirement with balances below $300,000.
Pension Loans Scheme
This is effectively a reverse mortgage, to access the equity you have in your home, made available by the federal government. It provides eligible pensioners with additional income, delivered as fortnightly payments. Once you qualify for a loan you can choose the amount of income you receive up to a maximum of 1.5 times the payment rate of your eligible pension each fortnight. Payments are a loan from the federal government, attracting interest, that must be repaid if you sell your home or come from your estate if you die.
Got questions?
If you need more information on any of these changes, simply call us on 1300 13 44 33.