Federal Budget 2021 - 22: Social Security and Aged Care

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Access to lump-sum advances under Pension Loan Scheme

Date of effect:  1 July 2021

The Pension Loan Scheme (PLS) enables individuals aged 66 or older to get a voluntary, non-taxable loan from the federal government, using their home as security for the loan.

The loan is paid fortnightly, and recipients’ combined pension and loan payments can be up to 1.5 times the maximum pension rate.

The government hope to improve the update of the scheme by:

  • allowing participants to access up to two lump-sum advances in any 12-month period, up to a total value of 50% of the maximum pension rate.
  • introducing a No Negative Equity Guarantee so borrowers will not have to repay more than the market value of their property.

Payments received from the PLS are not assessed as income for social security and are not subject to tax.

Click here to find out what the experts say about social security changes.

Aged-care reform

Date of effect: 1 July 2021

The government will invest $17.7 billion in a ‘five year — five pillar’ aged care reform plan addressing:

Home care

  • $6.5 billion for 80,000 additional Home Care Packages over the next two years
  • $798.3 million to provide greater access to respite care services and payments to support carers.

Residential aged care services and sustainability

  • $7.8 billion for a new funding model for residential aged care, with a $10 per person per day supplement of the Basic Daily Fee
  • $117.3 million to support structural reforms and the implementation of a new Refundable Accommodation Deposit (RAD) Support Loan Program.

Residential aged care quality and safety

  • $942 million to drive systemic improvements to residential aged care quality and safety.

Workforce

  • $652.1 million to grow a bigger, more highly skilled, caring and values-based workforce.

Governance

  • $698.3 million to improve governance across the aged care system.

Click here to find out what the experts say about aged care reform.

Changes to Child Care Subsidy

Date of effect: 1 July 2021

Changes will be made to the subsidy to provide more support to high-income earners and families with multiple children in care.

Changes include:

  • removing the subsidy cap of $10,560 for couples earning $189,390 or more in a year
  • for families with multiple children under five in childcare, the subsidy may increase by up to 30% for the second and subsequent children, up to a maximum of 95% if the parent/s meets the relevant activity and income tests.

Click here to find out what the experts say about social security changes.

Expert insights

Get a Budget breakdown from our experts — an accountant, financial planner, and economist — and find out what the changes and opportunities are for you.

This blog has been prepared by RJS Wealth Management Pty. Ltd. ABN 24 156 207 126. RJS Wealth Management Pty. Ltd. is a Corporate Authorised Representative (No. 438158) of Modoras Pty. Ltd. ABN 86 068 034 908 an Australian Financial Services and Credit Licensee (Number 233209). The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individual’s personal circumstances have been taken into consideration for the preparation of this material. Any individual making a decision to buy, sell or hold any particular financial product should make their own assessment taking into account their own particular circumstances. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Pty Ltd recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication.

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