Before all renting pensioners living on the NSW North Coast go into a state of shock on hearing the news that the Carbon Price Mechanism announced today will see electricity prices rise by an estimated 10% in 2013 above price rises already experienced in 2011-12; let me say that the fortnightly increase in the pension from March 2013 (as well as the one-off advance payment in May-June 2012) will be quarantined from the base pension and therefore should not be calculated in any rent increase if they are living in NSW Dept of Housing or community housing accommodation.
Earlier today the Labor Member for Page, Janelle Saffin, kindly clarified the fact that these new payments will not be included in the base pension.
This fortnightly increase will be indexed to the CPI once the carbon price is implemented.
The existing fortnightly Pension Supplement which includes the Utilities Allowance (covering electricity/gas/phone/internet subsidies) is already indexed.
According to www.cleanenergyfuture.gov.au on 10 July 2011:
Pension increases
Age pensioners will be eligible for household assistance that at least offsets all of their expected average price rises under a carbon price.
Age pensioners (including part-rate pensioners) will receive assistance equal to a 1.7 per cent increase in the maximum rate of pension. This is an annual increase of up to $338 for singles, and $255 for each member of a couple.
Assistance to pensioners will be automatic and will start before the carbon price starts, through an advance payment of $250 for singles, and $190 for each member of a couple paid in May-June 2012.
From March 2013, assistance will be delivered through extra fortnightly payments.
This assistance builds on the Government’s pension reforms which have seen the age pension increase by $128 per fortnight for single pensioners and $116 per fortnight for pensioner couples on the maximum rate, since September 2009.
Veterans will receive assistance through service pensions and other payments such as disability pensions and war widow/widower pensions.
Support for self-funded retirees
Self-funded retirees who hold a Commonwealth Seniors Health Card will receive the same amount of assistance as age pensioners.
This will be worth $338 for singles and $255 for each eligible member of a couple.
Self-funded retirees may also benefit from new tax cuts.
Combined with increases to the Senior Australians tax offset, a single person over 65 with taxable income of $35,000 will get tax cuts of $502 per year from 1 July 2012.
They would also receive an additional benefit thanks to an increase in the Medicare levy low-income threshold, providing an extra $160.
Support for aged care residents and providers
Arrangements will be introduced to ensure that assistance is shared fairly between aged care residents and providers.
Aged care providers bear many costs for their residents, including electricity, and will receive around half of the assistance paid through the age pension. Age pensioners living in aged care will receive the balance of the payment, to help them with increases in their other costs of living.
Disability Support Pension and Carer Payment increases
People who receive the Disability Support Pension or the Carer Payment will be eligible for household assistance that at least offsets the expected average price impact under a carbon price.
Pension payments will increase by an amount equal to 1.7 per cent of the maximum rate. This will be an increase of up to $338 for singles, and $255 for each member of a couple.
Assistance will be automatic and will start before the carbon price with an advance payment in May-June 2012 which will provide assistance to cover the first nine months of the carbon price. Fortnightly payments will increase from March 2013.
People with essential medical equipment needs
People holding a Commonwealth concession card who have high home energy costs because they rely on essential medical equipment will also be able to claim the Essential Medical Equipment Payment of $140 through Centrelink. This is in addition to their other assistance.
This extra payment is to ensure they do not incur extra costs for using their medical equipment under a carbon price.
Anyone else wanting information about how the new climate change policy will affect them can go to www.cleanenergyfuture.gov.au and Treasury economic modelling.
Graph found at Peter Martin's blog.
6 comments:
As a self-funded retiree who saved diligently for his retirement and was able to retire at 61, I would seem to be one of the 1 in 10 people who will not receive any compensation. As I have an Account Based pension, it is not taxable and as I am under 65 am not eligible for the Commonwealth Seniors Health Card. So no compensation for me until I am 65 at least due to an ill-conceived, totally needless policy by an inept and untruthfull Government following Green ideology to desperately stay in power.
Oh an account based pension is it?
Account based pensions, also known as allocated pensions, offer retirees a simple and flexible way of receiving their superannuation balance as a tax effective income stream. Allocated pensions have significant tax benefits, if you are aged 60 and over, all investment earnings and payments from your pension account are tax-free.
Account based pensions allow you to control your retirement income by varying the amount (subject to minimum pension payment requirements) and frequency of income paid, as well as allowing you to draw a lump sum if and when you need it. You can choose how your money is invested by your chosen pension fund provider.
2020DIRECTINVEST
Sounds as though it's supporting a healthy superannuation sum if early reirement was an option and Rob only misses out on compensation for a couple of years at most.
If Rob from Perth is not one of the seven in ten families who will receive tax cuts and increased family payments then he's on a pretty good wicket with his super - stll in the upper 30% of income.
We are also self-funded retirees and we are happy to make a small contribution - if required, and it doesn't currently seem to be - to lower carbon emissions for the sake of the planet.
For goodness sake, Rob, even the arch-conservative Rupert Murdoch says "We need to give the planet the benefit of the doubt". Why won't you?
I'm in a similar position to Rob and totally agree with his comments. First, there seems to be a widely held view that if you retire on superannation base pension, you are well off. Not necessarily so.
Of course, you could draw a much larger income, blow you superannuation in a few years, then put your hand out for an aged pension. For me, this would go completely against everything I have worked and saved for all my working life. I planned (and sacrificed) for self-sufficiency in retirement, now this.
"Thank you very much, glad you saved a bit more than the bloke next door; you can pay in full while we hand out money to him."
Where's the fairness in that?
There is definitely a "hole" in the government's plan insofar as self-funded retirees on low incomes, but short of the qualifying age for any concessions, get absolutely nothing.
BJB
Hi,
Don't forget that wholesale electricty supply costs haven't changed in some 10 years, look for yourselves on the net, retail electricity prices however, your power bill, have risen some 300% in the same period in anticipation of such an event as a carbon tax. To suggest that there is a now a position to increase them again is robbery!
Anon states: "Don't forget that wholesale electricty supply costs haven't changed in some 10 years"
Actually, that is not correct.
First it was the National Electricity Market and then the Australian Electricity Market Operator which has overseen the wholesale pricing mechanism for the last decade and, prices vary across states and during different parts of the day.
"Day to day operation of Australian energy markets involves dynamic trading between energy generators, wholesalers and retailers based on variable pricing levels that reflect current levels of demand. AEMO maintains the systems through which prices are set and transactions carried out and provides accurate and timely market data to participants. In some markets, AEMO also acts as the clearing house for market transactions.
Market operation involves systems operation, metering and settlements, market performance reporting, incident analysis and emergency management.
See http://www.aemo.com.au/data/avg_
price/averageprice_main.shtml
Anon further states: your power bill, have risen some 300% in the same period in anticipation of such an event as a carbon tax"
This is also incorrect as the sustained residential and business electricity prices rises over the last 10 years have been a response to a mix of higher operating costs, the need to refit aging infrastructure and to make some state government assets attractive in privatisation offers.
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