The Election results are in and we have a new government!

The new Government has proposed a number of key changes that could benefit you, and they have also announced support for some of the previous Government’s policies. Here’s our summary of some of the key changes.

Social Security:

Freezing of deeming rates
Previous Government position: Supportive. Proposed commencement: 1 July 2022

The Government has committed to freezing deeming rates for two years until 2024. This may benefit income tested pension and allowance recipients who would have otherwise have had a reduced entitlement under higher levels of deeming rates. The current deeming rates have been in effect since 1 May 2020 and are historically the lowest deeming rates since 1996.

Increase income eligibility threshold – Commonwealth Seniors Health Card
Previous Government position: Supportive. Proposed commencement: 1 July 2022

The Commonwealth Seniors Health Card is available to self-funded retirees who are ineligible for the Age Pension, and meet the associated income test. It is proposed that the income test thresholds will be increased as below:

This would provide more self-funded retiree to benefits such as:

• concessional rates on pharmaceutical benefits
• reduced out of hospital medical expenses through the Medicare Safety Net
• An increase in benefits for medical expenses above a certain threshold via the Medicare Safety Net
• Depending on your state or territory government and local council you may receive additional concessions

Extending the exemption on home sale proceeds
Previous Government position: Supportive. Proposed commencement date: 1 January 2023

When a social security recipient sells their primary residence, an assets test exemption applies for up to 12 months on the sale proceeds of their PPR. The Government is proposing this be extended for an additional 12 month period, therefore changing the exemptions to 2 years.

Housing:

Help to Buy scheme
Previous Government position: Not supportive. Proposed commencement: TBC

The new Government has proposed to introduce the Help to Buy scheme, which is a shared equity scheme. Support will be available for up to 10,000 people each year.
The scheme will provide equity support to eligible homebuyers for up to 40% of the purchase price of a new home, and up to 30% for an existing home. Homebuyers will be required to have at least a 2% deposit. Lenders Mortgage Insurance will also be avoided. Other eligibility conditions will also need to be satisfied.

Superannuation:

Expanding the Downsizer contribution opportunity
Opposition position: Supportive. Proposed commencement: 1 July 2022

The downsizer contributions allows individuals to contribute up to $300,000 from the proceeds of the sale (or part sale) of your home into your superannuation fund. The eligibility age is already legislated to be reduced from 65 to 60 from 1 July 2022, however the Government has proposed to further reduce the eligibility age to 55 from 1 July 2022, providing additional contribution opportunities for individuals aged 55 or over, who are constrained by their TSB in relation to NCCs or have already maximised their NCC cap.

It’s important to note, that the above details are based on information that had been announced up to today. These are proposals only and legislation will need to be passed for these measures to take effect. The Government and opposition’s position on these proposals may change and commencement dates as well as finer details need to be confirmed.

If you have any question please call us to discuss further.

Regards,

VJC Team