Budget 2023 – tackling the rising cost of living

As expected, Labor’s second Budget was filled with measures aimed at easing the cost of living over the coming years, addressing the challenges of a slowing economy, and bolstering the healthcare system.

For super, announcements were focused on aligning employer Superannuation Guarantee payments with pay cycles, and the introduction of the previously announced tax on earnings attributable to balances in excess of $3 million. There were no announcements extending the halving of pension minimums for another year.

The main Budget announcements that affect retirees are summarised below.

Addressing the rising cost of living 

Energy price relief plan

From July 2023

The government has announced it will provide funding, and partner with state and territory governments, to reduce the impact of rising energy prices on Australian households and small businesses by providing targeted energy bill relief.

The government says this will deliver up to $500 in electricity bill relief for eligible households and up to $650 for eligible small businesses. These include:

- Pensioners

- Commonwealth Seniors Health Card holders

- Family Tax Benefit A and B recipients

- Small business customers of electricity

Cheaper medicines

From 1 September 2023

The government has proposed reducing the cost of selected pharmaceuticals by implementing a ‘60 day’ prescribing policy which allows two months’ worth of medicine to be obtained for the cost of a single script.

Doctors will have the option of prescribing a two-month supply of more than 320 medicines on the Pharmaceutical Benefits Scheme (PBS) to Australians with stable, ongoing conditions. The current dispensing limit is for a one-month supply only.

From 1 September 2023, general patients will be able save up to $180 a year if their medicine is able to be prescribed for 60 days and concession card holders will save up to $43.80 a year per medicine.

Reducing out-of-pocket health costs (tripling bulk billing incentives)

From 2022-23

The government is investing $3.5 billion over 5 years to make it easier and cheaper to see a doctor.

The funding will triple the bulk billing incentive for the most common consultations for pensioners and other Commonwealth concession card holders and patients aged under 16 years of age.

The higher bulk billing incentive will support GPs to bulk bill around 11.6 million eligible Australians. This will support eligible patients to receive the care they need, without any out-of-pocket costs. The bulk billing incentive will continue to be higher for patients in regional and rural areas to support the ongoing viability of general practices in these communities.

Superannuation 

No announcement to extend halving of the pension minimums for another year

From 1 July 2023

The government did not announce any extension of the halving of the account-based pension and term allocated pension minimum drawdown requirements, which have been in effect since 2019-20. As a result, the minimum drawdown requirements are likely to revert to 100% of the standard minimum from 1 July for the following pensions (and annuities):

- Account based pensions

- Transition to retirement pensions

- Term allocated pensions.

Although the government could still announce an extension of the current halving of the minimum drawdown requirements for these pensions prior to the end of the year, given this wasn’t announced in the Budget it is considered unlikely.

If you have any questions about these or other Budget announcements, don't hesitate to contact Andrew on 0477007838.