Big pension and retirement changes

The Government has made major changes to the Age Pension in the budget, including a big rise in single pensions, a combined pension and supplement.

It has accelerated moves to range the pension age for both men and women, with them both to cut in at age 70 from 2023.

From 20 September 2009, the Government will provide single pensioners on the full rate with an additional $32.49 per week, bringing the value of their pension to a legislated benchmark of 27.7% of male total average weekly earnings.

Couple pensioners will receive an extra $10.14 per week combined, through a new fortnightly Pension Supplement.

The increases will be provided through a $30 per week increase in the single basic pension rate and a new pension supplement (consolidating existing allowances) for both singles and couples.

New and flexible payment arrangements will be available for payment of the Pensioner Supplement.

The new pension package will cost $14.2 billion over five years.

All carer payment recipients will receive a new $600 a year Carer Supplement on top of an increase in their pension.

Recipients of a carer allowance will also receive an additional $600 a year for each eligible person in their care.

These payments will commence by 30 June 2009 and will cost $1.8 billion over five years.

Pension age eligibility changes

The qualifying age for the Age Pension for men and women and the Commonwealth Seniors Health Card will be progressively increased to 67 years between 2017 and  2023, dovetailing with current plans to raise the female Age Pension age from 63.5 years today to 65 years of age by July 2013.

The rate at which the pension is withdrawn with private income will be increased to 50 cents in the dollar, but a more generous work bonus will be introduced for the first $500 of fortnightly employment income, providing extra assistance to those who work.

All existing pensioners will have their payments maintained in real terms, and all singles and couples will receive an increase of at least $10.14 per week.

The Government will lower the cap on concessional super contributions and the matching rate of the superannuation co-contribution will be reduced ‘temporarily’.