New financial year brings policy changes

As Australia enters a new financial year, there are several changes to be aware of which will affect areas such as super contribution and mortgages.

Retirement changes

Those born between 1 January 1954 and 30 June 1965 will now have to wait until they turn 66 before they can receive the age pension, as part of an ongoing schedule to increase the age pension to 67 by 1 July 2023.

For those who have reached pension age but still want to work, eligible pensioners will now be able to earn $300 per fortnight, up from $250, before their pension is impacted. That meant a single pensioner could earn $300 from employment and $174 from other income before their pension payments were reduced.

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The revamped Pensioners Loan scheme will allow retirees to boost their income through a reverse mortgage on the family home and will be open to full aged pensioners and self-funded retirees. AMP said a self-funded retiree would be able to borrow up to $36,000 and a self-funded retiree couple could borrow up to $54,000 paid in fortnightly instalments.

Superannuation changes

The Protecting Your Super package (PYSP) is now in place and will see inactive superannuation accounts being transferred to the Australian Tax Office, fee caps on balances under $6,000, the banning of exit fees and insurance cover being automatically switched off on super accounts that have been inactive for 16 months or more, unless members opt to retain it.

The age individuals can access their super had also increased with individuals who will turn 57 between 1 July 2019 and 30 June 2020 having to wait until age 58 to access their super.

This was the first year eligible retirees between 65-74 with a super balance below $300,000 would be able to make voluntary super contributions for 12 months at the end of the financial year in which they last met the work test. To make voluntary super contributions, individuals must work 40 hours in any 30-day period in a financial year.