An extra 23,000 home care packages over four years, cash payments totalling $500 for pensioners and some financial initiatives for aged care, but no help for thousands of older unemployed. Those are the main 2020 budget announcements which will effect older Australians.
Described as the most important budget since World War Two, the proposed fiscal measures will see the country facing $1.7 trillion in peak gross debt.
While the government has announced a JobMaker subsidy which will pay $200 a week for those under 30 and $100 a week for those aged 30 - 35, there is nothing in the budget to directly support employers to take on older workers or women. These groups were already disproportionately swelling the ranks of the unemployed prior to COVID-19 and many more have lost jobs during the pandemic.
This will leave jobless older Australians languishing in the job queue and facing severe financial hardship, possibly for years, especially as the Coronavirus Supplement ends on December 31 leaving them to survive on the old JobSeeker payment rate of $565.70 per fortnight.
Combined Pensioners and Superannuants Association has described as "disappointing" the lack of a commitment in the budget to permanently increase the JobSeeker payment or support older people getting back to work.
For many, JobSeeker has become a Pre-Age Pension. Before COVID-19, there were 196,000 people over 55 on unemployment benefits. The chance of them finding employment was low then, but now there are 318,000 people over 55 on unemployment benefits, an increase of more than 60 per cent.
"For many, JobSeeker has become a Pre-Age Pension," said policy manager Paul Versteege.
"Before COVID-19, there were 196,000 people over 55 on unemployment benefits. The chance of them finding employment was low then, but now there are 318,000 people over 55 on unemployment benefits, an increase of more than 60 per cent.
"As it stands, the Australian Government will remove the COVID-19 supplement at year end. JobSeeker without the COVID-19 supplement is $565.70 per fortnight. That's almost 40 per cent less than the pension ($933.40 a fortnight).
"People over 55 have plenty to offer and will mostly live another 25 to 30 years. They should not be relegated to permanent unemployment and mutual obligation 'volunteer' work. They need jobs! It is disappointing that this budget makes no attempt to get the over-55s back into work.
It is a sentiment echoed by Council on the Ageing (COTA) Australia chief executive Ian Yates, who, while welcoming the employment support targeting young people, said: "We are disappointed there is no parallel support to keep older Australians in work".
COTA also welcomed the announcement of the 23,000 additional home care packages which will cost $1.6 billion. Mr Yates said however, older Australians would be disappointed, "that there is still no commitment and plan to get waiting times down to 30 days and ensure no one is prematurely forced into residential care".
"The new home care packages are a substantial step forward and to be applauded, as are the supporters of our 'Safer at Home' campaign who lobbied for this", Mr Yates said, "but we still have a way to go and more will need to be done in the May 2021 Budget," Mr Yates said.
Mr Yates said COTA also welcomed other aged care initiatives, including:
- $29.8 million to implement the Serious Incident Response Scheme to provide better protection for residents in aged care;
- $91.6 million over four years to create an independent assessment service for the new residential care assessment and funding tool;
- $35.6 million over two years to extend the Business Improvement Fund, to help restructure residential aged care; and
- Commitments to upskilling aged care workers in dementia and funding the Aged Care Workforce Industry Council, which now needs to deliver leadership in workforce reform.
"However, we are disappointed that there is no increase in the inadequate Commonwealth Rent Assistance maximum rate, and that older unemployed people will still have their savings plundered by the Liquid Assets Test at the very time they should have retirement savings protected," he said.
However, we are disappointed that there is no increase in the inadequate Commonwealth Rent Assistance maximum rate, and that older unemployed people will still have their savings plundered by the Liquid Assets Test at the very time they should have retirement savings protected.
The two $250 payments announced as part of the Federal Budget will go into pensioners' bank accounts in December and March. They will apply to people who receive the age pension, disability support pension, carer payment, family tax benefit, family tax benefit lump sum, double orphan pension, carer allowance, Commonwealth seniors health card, pensioner concession card and veteran card.
The payments are designed to help stimulate the economy from its pandemic-induced depression.
National Seniors Australia described the Budget as a missed opportunity to address the home care waiting list.
"The government's announcement of an additional 23,000 packages over four years means fewer than an extra 6,000 people a year will get a home care package," said Chief Advocate Ian Henschke.
"The waiting list has been described by our very own CEO, Professor John McCallum as a 'running sore' and this announcement is a band aid which barely covers the wound."
While welcoming the two payments of $250 to aged pensioners and Commonwealth Senior Health Card holders, Mr Henschke says the pension remains too low to live on especially for those paying rent.
"In our budget submission we called for an increase in Commonwealth Rent Assistance (CRA), sadly this has been ignored.
"So too was our campaign to have the Pension Loan Scheme (PLS) interest rate of 4.5 per cent lowered," Mr Henschke said.
"This is a missed opportunity to help older Australian access their home equity to help have a better life, stimulate the economy and assist in paying for their own care."
CPSA's Paul Versteege also said it was disappointing the Budget's focus on economic stimulus through infrastucture did not include social housing.
"Three-quarter of a million new social housing units are required over the next 20 yerars, an average of 37,000 a year. Currently Australia is achieving about 5000 new units annually."
Australian Council of Social Service chief executive Cassandra Goldie said while the Budget provided a glimmer of hope for young people in a really tough year she said it "let down" 900,000 people on JobSeeker who were over 35. "We're calling on the wage subsidy for young people to be urgently extended to people of all ages who have been unemployed for a year or longer.
"The Federal Budget had failed to deliver a permanent, adequate JobSeeker rate. It leaves more than two million people receiving higher income support uncertain about their future beyond the end of the year, when income support rates will go to their pre-COVID levels - which, for JobSeeker, was $40 a day.
"People without paid work will see no benefit from the income tax cuts brought forward in today's budget, which mainly go to people who are lucky enough to have jobs, with the largest amounts going to people on higher incomes. There is also no income support in this budget for people on temporary visas, who have been left behind in the pandemic.
"The country's leading economists have been telling the Government that an adequate JobSeeker rate is far more effective than income tax cuts in generating the economic stimulus we need to rebuild out of recession. While people on higher incomes can choose to save, people on low incomes are living week-to-week and have no choice but to spend in the real economy on the basics, boosting business recovery.
"The extra funding for aged care is welcome, including 23,000 aged care packages, but this is far short of what is required to meet the shortfall for home care.
The peak body for non-profit aged care providers Aged and Community Services Australia (ACSA) has welcomed the investment for home aged care packages in the federal budget but said it is only a drop in the bucket of what is required to set up the sector for the next decade.
"Measures that allow us to hire young people are good but we need more permanent measures given aged care has to triple our workforce by 2050," chief executive Patricia Sparrow said.
"The home care injection is unprecedented and welcome. This is good bang for the buck, however, there will still be thousands of people waiting for the right level of support or any support at all.
"The kind of financing and budget reform that is necessary to set up Australia for our ageing population means a total rethink - not just a series of announcements that prop up the current system," said Ms Sparrow.
While pensioners can look forward to a couple of $250 cash payments, wealthier retirees have complained the Budget has hung them out to dry.
"Retirees who partly or fully fund their own retirement have suffered significant income reductions as a result of the adverse economic impact COVID-19," said Wayne Strandquist, President of the Association of Independent Retirees.
"These retirees rely on income from investments in the share market, property and fixed interest either through superannuation or private investment for their living expenses. They have been overlooked by the Government as billions of dollars have been allocated to programs to stimulate employment and the economy," said Mr Strandquist,
"The impact of COVID-19 on the economy has been unprecedented and well beyond the capacity of retirees to bear all the downside risk that has occurred.
Retirees rely on income from investments in the share market, property and fixed interest either through superannuation or private investment for their living expenses. They have been overlooked by the Government as billions of dollars have been allocated to programs to stimulate employment and the economy.
"The Association suggests the Government provides support measures for retirees such as providing offset assistance where regulatory policies such as reducing dividends by banks to cope with mortgage defaults, the issuing of Government-backed infrastructure bonds for retirees, reducing the deeming rate, reducing the age pension asset and income test taper rate, introducing continuous Centrelink valuation of assets for deeming and threshold purposes, more super drawdown flexibility for retirees over the age of 75 and increasing the threshold for receiving the CSHC card," said Mr Strandquist.
The Government has also said it will provide a targeted Capital Gains Tax (CGT) exemption for granny flat arrangements where there is a formal written agreement in place.
Tax consequences can be a key impediment to families creating formal and legally enforceable granny flat arrangements. When faced with a potentially significant CGT liability, families may opt for informal arrangements which can leave open the risk of financial abuse and exploitation, for example following a family or relationship breakdown.
Under the measure, CGT will not apply to the creation, variation or termination of a formal written granny flat arrangement providing accommodation for older Australians or people with disabilities.
The budget also provides for more money for Telehealth services and a boost for Medicare supported psychology appolintments.