1996-97 Commonwealth Budget Papers

RECOGNISING OLDER AUSTRALIANS

STATEMENT BY

THE HONOURABLE PETER COSTELLO, M.P.,
TREASURER OF THE COMMONWEALTH OF AUSTRALIA

SENATOR THE HONOURABLE JOCELYN NEWMAN
MINISTER FOR SOCIAL SECURITY

THE HONOURABLE JUDI MOYLAN, M.P.,
MINISTER FOR FAMILY SERVICES

THE HONOURABLE BRUCE SCOTT, M.P.,
MINISTER FOR VETERANS’ AFFAIRS

20 AUGUST 1996

© Commonwealth of Australia 1996

ISBN 0 644 43788 X

This work is copyright. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction rights should be directed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601.

Produced by the Australian Government Publishing Service

The complete ministerial statement Recognising Older Australians is available to download in both Word 6 and Adobe Portable Document Format (PDF) formats.

RECOGNISING OLDER AUSTRALIANS

CONTENTS

OVERVIEW

RETIREMENT INCOMES — SELF PROVISION

• Making Superannuation Fairer and More Flexible

• Capital Gains Tax Exemption on the Sale of a Small Business for Retirement

• Retirement Savings Accounts

• Age Limit for Superannuation Contributions Increased

• Superannuation Spouse Rebate

• Tax Rebate for Low Income Aged Persons

RETIREMENT INCOMES — AGE PENSION

• Adequacy

• Pension Bonus Plan

• Better Targeting and Simplification

• Removal of the Deeming 'Free Area'

• Removal of Superannuation Assets Means Test Exemption for Over 55s

• Special Rural Task Force

• Rationalisation of Payments on Transfers from Allowance to Pension Payments

• Assistance for Widows and Partners

• One Pension Advance a Year

• Rent Assistance Changes

• Removal of Pensioner Concession Card Entitlement for Certain Ex-pensioners

• Change to Voluntary Work Provision for Older Unemployed People

• Extended Compensation Provisions to Age Pensioners

• Customer Service

• Shopfronts

• Streamlined Service to Pensioners who Interact with both DSS and DVA

• Financial Information Service

• Revised Claims Process for Age Pension

• Reviews

VETERANS

• Support

• Medication Review Programme

• Review the 'Eligible Drugs' List for Veterans

• Defence Service Homes Scheme (DSH) Loan — Remove Interest Penalty for Additional Advances

• DSH Loan — to Widowers of WWII Women

• Other Support Measures

• Recognition

• Australian War Memorial Code Compliance, Visitor Access and Refurbishment

• Commemorative Activities

• Vietnam Revisited

• Increased Demand for Maintenance of Australian Office of War Graves (AOWG) Graves and Memorials

• Sandakan Memorial Park — Sabah, Malaysia

• National Memorial to Service Nurses

HEALTH AND AGED CARE

• Residential Aged Care Structural Reform

• Replace Rent Assistance with Higher Direct Subsidies

• Client Fees in Home and Community Care

• Healthy Seniors

• Private Health Insurance

• Pharmacies as Medicare Agents

• Pharmaceuticals

• Musculoskeletal Medicine Clinics

• Topical Anti-Fungals

• Dental

• Hearing Services

• Conference for Older Australians

CARERS

NATIONAL CAMPAIGN AGAINST VIOLENCE AND CRIME

RECOGNISING OLDER AUSTRALIANS

OVERVIEW

Older Australians, whether approaching or in retirement, will benefit significantly from this Budget. The Government has made substantial reforms that will deliver financial security to Australians in their retirement, and gives due recognition to the valuable contribution that older Australians make to our social and economic fabric.

Central to the Government’s policy are its two key pension election promises to older Australians which have not only been kept but have been added to:

• the Government has underlined its commitment to twice yearly indexation of the pension to maintain its real value; and

• more significantly, and for the first time ever, this Government has built into the Budget bottom line its commitment to maintain pensions at 25 per cent of Male Total Average Weekly Earnings (MTAWE), ensuring that increases in community living standards will also be passed through to pensioners.

A major criticism of the current social security system is that it is too complex for customers and staff to understand fully. One of this Government's top priorities is to reduce the complexity and intrusiveness that characterises the social security system after years of Labor rule. Older Australians in particular deserve a system that is comprehensible, rational and well-integrated.

Hand in hand with our commitment to a simpler, more easily understood system is a commitment to improved customer service. Age pensioners and other retirees need ready access to a range of information to assist them with the decisions facing them on and during retirement. It is vital that the Commonwealth Government continues to become more active in helping people understand the range of options open to them, and better able to deliver services in a personalised way. Older Australians deserve nothing less.

Securing pension rights in this way, however, in no way diminishes the Government's commitment to encourage people to make greater provision for their retirement during their working lives. Greater self provision will allow retirees to maintain a standard of living more in keeping with their pre-retirement lifestyle. Superannuation and other forms of private saving will continue to play a vital role in ensuring greater financial security in retirement.

In that regard, the Government has announced a number of measures to expand the choice of superannuation arrangements which will be beneficial to those individuals currently approaching retirement. These measures include:

• providing capital gains tax exemption on the sale of a small business for retirement;

• introducing Retirement Savings Accounts;

• increasing the age limit for superannuation contributions; and

• introducing a superannuation spouse rebate.

Moreover, the Government is implementing its commitment to introduce a tax rebate for low income self funded aged people. This measure builds on the Government’s earlier decision to reduce the provisional tax uplift factor from 8 per cent to 6 per cent from the 1996 97 income year, thus providing an important reduction in the provisional tax burden for many older Australians.

Recognising the contribution and sacrifices made by veterans to the independence and well being of this Nation, a number of measures have been introduced in this Budget of direct benefit to the Veteran Community. For example, the Department of Veterans’ Affairs (DVA) will be able to assist a number of veterans currently assisted by the Department of Social Security (DSS), and certain anomalies in the operation of the Defence Service Homes Scheme will be removed.

The desire of veterans and the general community to commemorate the sacrifice and courage of those who have served in all conflicts and wars has also been recognised in this Budget.

Older Australians will also benefit significantly from the implementation of the Government’s election commitment to provide tax incentives for low to middle income earners to purchase private health insurance.

At the same time, through its Healthy Seniors Initiative, the Government will focus on improving the health of older people. The Government will also specifically address the concerns of older Australians in each of the four streams of the National Campaign Against Violence and Crime.

Every year more than 500,000 older people use aged care services funded through the Aged and Community Care Programme. These services include residential care in nursing homes and hostels, community care, and assessment.

This Budget will help frail older people and their carers by ensuring a strong and viable residential aged care sector, improving service quality and consumer choice and expanding the community support services available to older people.

In particular, the nursing home and hostel sectors will be merged into a single and much simpler funding system and regulatory framework. Reforms also target the quality of nursing home buildings and the quality of residential care.

The frail aged will particularly welcome the Government’s initiatives to liberalise the current eligibility requirements for the Carer Pension under the National Carer Action Plan, and to expand respite care and other services for carers through the National Respite for Carers Programme. Moreover, in recognition of the value of carers to the community, the Carer Pension will be renamed Carer Payment.