How the Federal Budget affects you

The needs of seniors have been listened to in the 2024/25 Federal Budget, with several key cost-of-living measures announced. 

The Budget includes a trifecta of headline changes which are good news for seniors: a new energy bill rebate, increase in Commonwealth Rent Assistance, and a further freeze on deeming rates.  

National Seniors Australia (NSA) has welcomed these changes, which we recommended in our pre-budget submission. This shows the impact our advocacy and the importance of your ongoing support. 

These aren’t the only changes in the Budget for seniors, with other spending commitments on tax, health, and aged care. 

$300 energy bill relief 

The government will provide a $300 cost-of-living rebate to all households. Similar to the $500 rebate delivered in the previous budget, this will be provided directly via electricity bills. Unlike last year, this rebate will not be subject to the same means testing rules and will be available to all households. 

The rebate will be on top of any similar state-based schemes. For instance, Queensland recently announced a $1,372 energy rebate for eligible seniors – again something that National Seniors championed for in our Queensland Budget Submission. 

Commonwealth Rent Assistance 

In a move welcomed by NSA, the government will increase the maximum rate of Commonwealth Rent Assistance (CRA) by 10%, from 20 September 2024. This follows on from a 15% increase in the maximum rate in last year’s budget. 

For a single renter receiving the maximum rate, CRA will increase by $18.80 per fortnight, close to $500 over a year. 

NSA recommended an increase in the CRA in our pre-budget submission, given the increasing cost of rents and broader cost of living. We are disappointed that a change hasn’t been made to the indexation process to ensure that future increases in CRA match changes in rents, and not overall CPI, as we recommended. 

12-month freeze on deeming rates 

With the RBA having raised interest rates, pensioners subject to deeming should find some relief in the announcement of an ongoing freeze on social security deeming rates. 

The Budget includes a further 12-month freeze on deeming rates, keeping them at their current levels until 30 June 2025. This follows the initial two-year freeze due to end 30 June 2024. 

The lower deeming rate is 0.25%, with 2.25% for the upper rate. Given various predictions about future interest rate changes, National Seniors welcomes this degree of certainty for pensioners with deemed assets.  

Tax cuts for “every taxpayer” 

Older workers will get a boost in their pay packet from the previously announced tax cuts.  

“From July 1, all 13.6 million taxpayers will get a tax cut,” said Treasurer Jim Chalmers. This includes a significant number of people aged 50+. 

The updated tax cuts will lower the 19% tax rate to 16%, and the 32.5% rate to 30%. The 37% and 45% tax rates will remain at those levels, but the thresholds will be cut. 

The Treasurer said there will be 2.9 million people earning $45,000 or less who will receive a tax cut under the updated tax schedules, who wouldn’t have received a cut under the previously legislated plan. 

Freeze on medication co-payment indexation 

The Budget includes a five-year freeze on the PBS co-payment for pensioners and Commonwealth concession cardholders. This will freeze the concessional co-payment amount at $7.70 until 31 December 2029. 

The PBS general co-payment will be frozen between 1 January 2025 and 31 December 2025. This co-payment amount is currently $31.60. 

These amounts would have otherwise been increased with inflation. 

Higher incomes before paying Medicare levy 

The government has included increases in the threshold before paying the Medicare levy for people on lower incomes in the budget. 

The government is making changes to a number of the thresholds. For single seniors and pensioners (based on being entitled to the Seniors and Pensioners Tax Offset), the threshold will increase from $38,365 to $41,089 for singles. For eligible senior couples, the family taxable income threshold will increase from $53,406 to $57,198. 

This change is intended to apply to the current tax year. 

Note that the Medicare levy is an additional 2% tax paid by people depending on income level. This is different from the Medicare levy surcharge, which is based on income and if someone doesn’t hold private health insurance. 

Pharmaceutical Benefits Scheme 

The Budget includes $3.4 billion in funding for new and amended listings on the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme. Many of these will be for treatments that affect older patients. 

New and amended listings have been provided for the treatment of: 

• Adults with COVID-19 

• Untreated chronic lymphocytic leukaemia or small lymphocytic lymphoma 

• Chronic kidney disease 

• Relapsing remitting multiple sclerosis 

• Advanced melanoma of the middle layer of the eye (uvea) 

• Chronic heart failure 

• Patients with newly diagnosed ovarian cancer 

• Breast cancer 

• Symptomatic obstructive hypertrophic cardiomyopathy.

Hospital discharge for older patients 

The government has provided significant funding of $882.1 million to support earlier discharge from hospital for older Australians. 

This includes $610.4 million for state and territory governments to invest in initiatives that address challenges association with longer-stay older patients who are unable to be safely discharged into the community and ongoing funding for existing transition care programs and palliative care programs. 

Mental heath 

A package of initiatives has been provided to respond to the evaluation of Australia’s mental health and suicide prevention system. This includes $588.5 million over eight years to establish a free national digital health service. 

The Government has committed $2.2 billion over five years for ongoing aged care reforms from the Aged Care Royal Commission. 

As part of this, the Government has signalled the new Aged Care Act will be operational from 1 July 2025, in line with the new consolidated Support at Home program. This likely will include any changes to funding as recommended by the Aged Care Taskforce. 

Aged care ICT and digital systems  

A significant investment of $1.2 billion over five years is being made to sustain and enhance the digital systems used within aged care to ensure they can support the introduction of the new Aged Care Act from 1 July 2025. 

A further $174.5 million over two years will be made available to fund the ICT infrastructure new Support at Home Program and Single Assessment System, which will also begin on 1 July 2025. 

Home care packages 

An additional 24,100 home care packages will be available in 2024–25 at a cost of $531.4 million. 

This is more than double the amount that was introduced last year, which led to a worsening of the home care wait list. We hope this higher amount will bring wait list times down again. 

Quality and safety 

Additional funds have been provided to Aged Care Quality and Safety Commission of $110.9 million over four years to increase its regulatory capability and to implement a new aged care regulatory framework from 1 July 2025. 

Workforce 

Funding of $65.6 million over four years is being provided to attract and retain aged care workers, collect reliable data, and improve the outcomes for people receiving aged care services through existing aged care workforce programs.  

Disappointingly, the Government has not implemented changes to Age Pension Income Test rules to reward older care sector workers who remain in the workforce, as NSA continues to recommend.  

The My Aged Care Contact Centre will receive $37.0 million over two years to help reduce wait times for due to increased demand and service complexity. 

Dementia and palliative care 

Ongoing funding of $30.4 million over three years has been given to continue the Specialist Dementia Care Program. The Australian Dementia Network will receive funding to continue developments in biomarkers and disease-modifying therapies for dementia. 

The Palliative Aged Care Outcomes Program will be extended for two year and the Program of Experience in the Palliative Approach program will continue to upskill the aged care and primary care workforce to further embed palliative care capacity in the aged care workforce at a cost of $10.8 million. 

Supporting service delivery in thin markets 

The Home Care Workforce Support Program will receive additional funding for three years growth of the care and support workforce in thin markets, such as in regional and remote areas. 

Providers operating in thin markets will also get further support: $7.8 million over two years to extend funding to aged care service providers in thin markets as they transition their business operations to accommodate the new Australian National Aged Care Classification (AN-ACC) funding model.