Leading seniors’ advocacy body, COTA Australia, has welcomed the passage of retirement income reforms which will provide more financial support and flexibility for Australian retirees.
The Social Services and other Legislation Amendment (Supporting Retirement Incomes) Bill 2018, which passed through parliament this week, enacts important changes to retirement income law as part of the Morrison Government’s “More Choices for a Longer Life” package in the 2018 Federal Budget.
Chief Executive of COTA Australia, Ian Yates, welcomed the increase in the Pension Work Bonus from $250 to $300 a fortnight, increasing by $50 the amount that can be earned from work without even being taken into account in the Age Pension income test.
“This increase in the Pension Work Bonus means more than 90,000 older Australians will receive an increase in payments, something COTA advocated for; and making self-employed pensioners eligible for the Work Bonus will mean more older Australians will receive the Bonus, and all will have more flexibility and choice over how they choose to work while on a pension.
“Many older Australians seek to remain in part time employment for reasons such as increasing their income, staying connected to colleagues, maintaining skills or simply keeping themselves busy; while others have no choice but to keep working due to low savings or being in the private rental market.
In addition to the increase in the Pension Work Bonus, the Bill passed yesterday will expand the Pension Loan Scheme, which will give every older Australian of pension age the option of borrowing against the value of their home to draw down an income stream up to one and half times the pension.
“COTA Australia was delighted that the changes to the Pensions Loans Scheme were included in the More Choices for A Longer Life Package and believes they will have a considerable impact over time; with significant numbers of retirees choosing to access their home equity in the latter stages of retirement to pay for home modifications, health services, home support services or residential care.”
COTA also welcomes the changes to the means test for lifetime retirement income streams which will assist older Australians access innovative lifetime retirement income products.
“In the context of our ageing population, we need to provide more options for people to access and utilise retirement income streams on an equitable basis as the demand for these products is only going to increase in coming decades,” said Mr Yates.
COTA’s 2018 State of the Older Nation Report revealed one in four of those surveyed felt insecure about their finances being able to meet their needs for the rest of their lives.
“The changes to the retirement income laws passed in Parliament today will make a significant contribution to improving the finances of older Australians, both now and for decades to come,” said Mr Yates.
Media contact: Ian Yates 0418 835 439, Bronte Kerr 0411 676 269
COTA Australia is the peak policy development, advocacy and representation organisation for older Australians, representing COTAs in every State and Territory and through them over 500,000 older Australians.