A range of new pension and aged care measures were announced in the recent Federal Budget. Here’s what they could mean for your retirement.1

Earn more in retirement

Currently, if you receive the Age Pension and work for an employer, you can earn $250 per fortnight without your entitlement being affected. Proposed Budget changes will increase this to $300 per fortnight from 1 July 2019 and extend the offer to the self-employed.

Start a business

The Government will provide almost $18 million in additional funding to support entrepreneurs, with a focus on older Australians. The Entrepreneurship Facilitators program, which provides support to Australians who want to start their own business, will be expanded to regional Australia to help older workers start new businesses.

Stay in the workforce longer

To encourage employers to hire older workers, the Government is expanding access to the Restart wage subsidy. This provides up to $10,000 to employers to support workers aged 50 or older as they start a new career.

Get more in your super

To give you more time to boost your retirement savings after you leave work, the Government has introduced a change to the Work Test that applies to making super contributions.

Under current rules, to make contributions to super, people from age 65 to 74 must work a minimum of 40 hours in any consecutive 30-day period in the financial year.

Under the new proposal, from 1 July 2019 people from age 65 to 74 with superannuation balances less than $300,000 will be exempt in the first financial year they do not meet the Work Test requirements. This means they will be able to make up to $25,000 in before tax contributions and $100,000 in after tax contributions to their super the year after they leave the workforce.

Boost your income

If you’re retired and would like to unlock some of the equity in your home without downsizing, a change to the Pension Loans Scheme proposed in the Budget might be for you. The Pension Loans Scheme is a reverse-mortgage style arrangement that allows retirees to release equity in their home to top-up their retirement income.

The Government has proposed extending the Scheme to all retirees, including full rate Age Pensioners and self-funded retirees.

Under the new proposal, from 1 July 2019 full pensioners will be able to increase their income by up to 150% of the maximum Age Pension. This will enable single retirees who own their own home to increase their income by up to $11,799 a year and couples to increase their income by up to $17,787 a year without impacting their eligibility for the Age Pension or other benefits.

New means testing for lifetime products

To encourage retirees to purchase products that provide income for life and support a more flexible retirement, the Government proposed changes to the means testing rules for the Age Pension.

Under the new proposal, from 1 July 2019 if you purchase a pooled lifetime retirement income stream product, only 60% of the payments you receive will be assessed as income and only 60% of the purchase price will be assessed as an asset for 5 years or until you turn 84. After that, just 30% will be assessed for the rest of your life.

Stay in your home longer

The familiarity and security of your home can be a great comfort in retirement. To support Australians who wish to stay at home while accessing aged care services, the Government will provide 14,000 additional home care packages by 2021. For more information on how to access these services, don’t miss our article in this edition about spending more of your retirement in your home.

Enjoy a healthier retirement 

To support the health of older Australians, the Government is providing:

  • $82.5 million towards mental health services for people in residential aged care facilities.
  • $20 million for services to help older Australians remain connected to their communities.
  • $22.9 million to help older Australians stay fitter for longer.


1 The changes listed are proposed by the Federal Government and are yet to be passed as legislation. Once the proposed changes are legislated the effect and scope of the proposed reforms may be different.