1. Fuel prices to rise. From 1 August 2014 the fuel levy will be subject to indexation twice a year
2. Co-payments for GP visits. From 1 July 2015 patients can expect to pay $7 GP consultations, as well as out-of-hospital pathology and imaging services.
Concessional patients, for example those who hold a Pension Concession Card, will only pay the $7 for the first 10 combined services they use in each calendar year. The 10 services can consist of any combination of standard GP visits, pathology or imaging.
Those who have special health needs, such as those with Health Assessments or those on Chronic Disease Management programs, will be exempt from the patient contribution.
For every $7 patient contribution, $5 will be invested in the new Medical Research Future Fund. This $5 will come from the Government reducing the Medicare Benefits Schedule (MBS) rebates provided to GPs for standard consultations, as well as pathology and imaging, by $5. The other $2 will go to the healthcare provider.
Providers will still have discretion over whether to charge the $7, but if they choose not to collect the patient contribution they will not receive the Low Gap Incentives from the Government for that consultation.
States and Territories will also be able to introduce patient contributions in hospitals for GP equivalent visits to emergency departments.
How will this affect you?
Example - A Pension Concession Card holder visits the doctor 12 times in one calendar year. He or she will pay a total of $70 - $7 per visit for the first 10 visits, and nothing for the final two.
Non-concessional patients can expect to see their Medicare rebates for GP visits reduced by $5, all of which will be invested in the Medical Research Future Fund.
Note that DVA Gold and White treatment card holders do not pay the co-payment. The DVA fee will continue as the full payment to the provider with no additional charge to the cardholder.
3. Changes to pensions -Pension indexation.
From 1 July 2017, MTAWE and the PBLCI will no longer be used in the indexation of Age Pension, Service Pension and Disability Support Pension. Indexation changes will align pension indexation with those for other social security payments. The change will flow through to affect the rate of Income Support Supplement, DVA Disability Pension, War Widow(er) Pension and equivalent MRCA payments.Over the previous four years to March 2014, Age Pension, Service Pension and Disability Support Pensions’ benchmarking to MTAWE has resulted in pension payments over that period totalling $2000 more than they would have been if linked only to CPI.
Note that this change does not apply to DFRB/DFRDB superannuation indexation payments.
4. Changes to pensions - Asset and income test thresholds.
From 1 July 2017 for a period of three years, the indexation of asset and income thresholds will be fixed. This means that increases in income and assets of an individual or couple over these three years could result in a reduction of the Age Pension, Carer Payment, Service Pension or Disability Support Pension. The family home, if a principal place of residence, will not be included in the pension asset test.
5. Changes to pensions - Deeming thresholds.
For the purposes of the pension income test, the Government will change how it deems the return from a person’s financial assets. From September 2017, the deeming thresholds will be reset from $46,600 to $30,000 for singles and from $77,400 to $50,000 for couples.
This essentially means that income above such thresholds will attract the higher deeming rate, which is currently 3.5 per cent. Indexation of the reset amounts will commence on 1 July 2020. The newly diminished threshold amount will not be increased by indexation for three years.
6. Changes to pensions
Clean Energy Supplement. While it remains the Government’s intention to abolish the carbon tax, it has committed to maintaining the Clean Energy Supplement, which will now be called the Energy Supplement, at current levels. Its indexation will be cancelled so it will remain a static amount as of 1 July 2014.
7.Changes to pensions - Commonwealth Seniors Health Cards.
From September 2014 the Commonwealth Seniors Health Cards (CSHC) will be indexed. While this may assist more self-funded retirees to become eligible for a CSHC, the payment of the annual Seniors Supplement will cease after this year’s payment in June. The Seniors Supplement is currently $876.20 for singles and $1320.80 for couples combined, per annum.
Note: The Seniors’ Supplement is paid only to CSH card holders and is NOT the same as the Pension Supplement which is paid to those who are eligible for a pension.
Untaxed superannuation income (i.e. DFRB/DFRDB, MSBS) will be included in the eligibility assessment.
8. Changes to pensions - Increase in the Age Pension eligibility age.
The age at which Australians will be able to claim the Age Pension will rise to 70 by 2035. This is an extension of the previous Government’s raising of the eligibility age to 67. Eligibility age will now be as detailed in the table below:
|People born between||Eligible for the Age Pension at age|
|1 July 1952 and 31 December 1953||65.5|
|1 January 1954 and 30 June 1955||66|
|1 July 1955 and 31 December 1956||66.5|
|1 January 1957 and 30 June 1958||67|
|1 July 1958 and 31 December 1959||67.5|
|1 January 1960 and 30 June 1961||68|
|1 July 1961 and 31 December 1962||68.5|
|1 January 1963 and 30 June 1964||69|
|1 July 1964 and 31 December 1965||69.5|
|1 January 1966 and later||70|
9. Increased Pharmaceutical Benefits Scheme (PBS) co-payments
From 1 January 2015 the Government will increase the co-payments.
|Concessional patients||Standard patients|
|Current co-payment rates||$6||$36.90|
|New co-payment rates from 1 Jan 2015||$6.90||$42.70|
The PBS Safety Net protects patients who need to purchase a high number of prescriptions each year. Once patients reach a set threshold, standard patients pay the reduced concessional rate, and concessional patients receive their prescriptions for free.
Currently, the PBS Safety Net threshold for standard patients is set to become $1452.50 in 2015. The Government plans to increase this to $1597.80, meaning standard patients will need to pay an extra $145.30 more to reach the PBS Safety Net threshold. This threshold will continue to increase by 10 per cent above inflation each year for a further three years.
The PBS Safety Net threshold for concessional patients will be 60 prescriptions in 2015. Under new arrangements this will be increased to 62 prescriptions in 2015, with a two-prescription increase each year for a further three years. This means that in 2015 a concessional patient will have to pay $61.80 more to reach the safety net.
Veterans eligible for the Veterans’ Pharmaceutical Benefits Scheme will be reimbursed the additional costs
10. Medicare threshold changes
Currently there are multiple Medicare safety nets for out-of-hospital services. These will be amalgamated into the creatively named Medicare Safety Net, with updated thresholds for patients. Individuals will not need to register for the Medicare Safety Net, but families will need to register to combine medical expenses for all family members, even if all family members are on one Medicare card.
Changes to the thresholds:
|Threshold in 2016 under current system||Threshold in 2016 under new system|
|Family Tax benefit Part A family||$654.30||$700|
Once the Medicare Safety Net threshold has been reached in a calendar year, all further out-of-hospital claims will attract a higher benefit, as the Government will contribute more towards out-of-pocket costs.
11.Veterans’ Disability Pensions – Commencement of payments from date of claim.
On or after 1 January 2015 there will be no backdating of Disability Pension claims other than for War Widow(er) claims. This restores the equity between Disability Pension compensation and income support payments under the Veterans' Entitlements Act and permanent impairment payments under the Military Compensation and Rehabilitation Act which has no backdating provisions.
12. Veterans’ Incapacity Payments – Review by Medical Specialist after 12 months.
DVA clients who have been in continuous receipt of incapacity payments for 12 months or more under either the Safety Rehabilitation and Compensation Act 1988 or the Military Rehabilitation and Compensation Act 2004 will undergo a specialist review to confirm that their service related condition continues to impact their ability to work.
Entitlements to permanent impairment payments will not be affected by the reviews. . Therefore TPI, Gold card and White Card holders who receive disability compensation payments for permanent disabilities will NOT be affected by the Budget announcement.
Who then is affected? Specifically it is those recipients of 'non permanent' incapacity payments under the Safety, Rehabilitation and Compensation Act 1988 (SRCA) and Military Rehabilitation and Compensation Act 2004 (MRCA). The recipients covered by this proposed budget measure are younger individuals who are being paid for conditions that are classified as 'temporary', and particularly those who are suffering from only one condition that prevents them from returning to the work force. The wider, older veterans' community will be unaffected by this measure.
13. Military Superannuation – DFRB/DFRDB
From 1 July 2014, DFRB and DFRDB superannuation scheme members aged 55 and over will have their superannuation benefits indexed by the better of the Consumer Price Index and the Pensioner and Beneficiary Living Cost Index, with reference also to a benchmark level of Male Total Average Weekly Earnings.
Additionally, the Government will exempt DFRB and DFRDB members from any Division 293 tax liability for the one‑off increase in the capitalised value of the benefit arising from the new indexation arrangements. Division 293 tax is imposed under theIncome Tax Assessment Act 1997on concessional contributions made by individuals whose income and relevant concessionally taxed contributions exceed $300,000. This measure delivers on the Government's election commitment.
Note that DFRB/DFRDB superannuation indexation payments are not affected by the Government decision to change the Age Pension and Service Pension indexation (see para 3 above).
14. Military Superannuation – New Accumulation Scheme – ADF Super - MSBS
From 1 July 2016, the Government will establish a modern fully funded, accumulation superannuation scheme for new members of the Australian Defence Force (ADF).
The existing Military Superannuation and Benefits Scheme (MSBS) will be closed to new members from this date. Existing MSBS members who leave and then rejoin the ADF are able to rejoin their existing MSBS arrangements. There will be no change to the superannuation arrangements for existing MSBS members, but they may elect to be covered by the new arrangements.
Under the new arrangements, the members do not have to make a personal contribution to ADF Super. The Government will pay a 15.4 per cent contribution to a member's chosen superannuation fund. The contribution rate will increase to 18 per cent for any period in which members are serving in war‑like operations.
Serving ADF personnel covered by the new arrangements will also be covered by statutory death and disability arrangements consistent with the defined benefit arrangement currently in place under the MSBS.
The new arrangements will be more flexible than the MSBS, as members will be able to transfer superannuation benefits to a fund of their choice.
See more details here
A broader report of the whole Budget is provided here