Today’s announcement that the Federal Government will drop the deeming rate and provide new payments to people on income support, as well as time limited measures to support self-funded retirees, will come as welcome news for older Australians, older Australians peak body Council on the Ageing (COTA) said today.
COTA Chief Executive, Ian Yates, said the welcome news included a second $750 payment to support for people on the age pension to be paid after July 1, dropping the upper and lower social security deeming rates by another 0.25 per centage points, and doubling the income support for job seekers.
“Keeping the economy going is critical but as a nation we must also make keeping Australians out of poverty and helping those in most desperate need an absolute priority. This package will come as welcome news for many older Australians at a time when there isn’t much good news around” Mr Yates said.
“Providing additional payments for people on government income support will help older Australians who are already struggling to keep up with cost increases and utility bills, alongside the increased medical costs that come with getting older.
“A temporary $275 a week supplement for people receiving the Job Seeker Payment will also be a life-line for older workers who are already looking for employment, and those who will lose their jobs in coming months. COTA will continue to urge the government to raise the rate permanently.”
The government has announced it will:
- Establish a new Coronavirus supplement of $550 a fortnight for the next six months for people who receive a Job Seeker Allowance.
- Introduce two separate $750 payments to government income support recipients and eligible concession card holders: the first payment will be made from 31 March 2020 and the second payment will be made from 13 July 2020.
- From May 1 reduce the upper deeming rate to 2.25% and the lower deeming rate to 0.25%
- Allow people affected by the Coronavirus to access up to $10,000 of their superannuation a year to 2020-21 – without paying tax on the released amounts or affecting Centrelink payments.
- Temporarily reducing superannuation minimum drawdown requirements for account-based pensions and similar products by 50 per cent for 2019-20 and 2020-21.
Mr Yates welcomed the government’s superannuation measures but stressed they must remain temporary.
“I am pleased the government has included measures in the package to alleviate the potential impact uncertain financial markets and low interest rates could have on the retirement savings and superannuation dividends of people who saved over their live to support themselves in retirement.
“Reducing the drawdown rate will support older Australians with account-based pensions by reducing their need to draw down on investments to fund their income, while providing early access to some superannuation will free up cash for people who can no longer work because of the virus.
“It’s important to stress that these measures are in place due to unprecedented global circumstances and must be lifted at an appropriate time, so we do not critically undermine the structure of our superannuation system.”
Mr Yates also welcomed the raft of greater support measures for small business, many of which are owned and run by mature age people and provide valuable services that older Australians rely on.
“We particularly welcome that these small business measures also apply to charities and not for profits, which provide critical services to all Australians and will be needed even more in the months to come.”
Media contact: Ian Yates 0418 835 439; Jenny Stokes 0478 504 280