Federal Budget 2021 - 22: Social Security and Aged Care

• Access to lump-sum advances under Pension Loan Scheme
• Aged-care reform
• Changes to the Child Care Subsidy

Access to lump-sum advances under Pension Loan Scheme

Date of effect:  1 July 2021

The Pension Loan Scheme (PLS) enables individuals aged 66 or older to get a voluntary, non-taxable loan from the federal government, using their home as security for the loan.

The loan is paid fortnightly, and recipients’ combined pension and loan payments can be up to 1.5 times the maximum pension rate.

The government hope to improve the update of the scheme by:

• allowing participants to access up to two lump-sum advances in any 12-month period, up to a total value of 50% of the maximum pension rate.
• introducing a No Negative Equity Guarantee so borrowers will not have to repay more than the market value of their property.

Payments received from the PLS are not assessed as income for social security and are not subject to tax.

Click here to find out what the experts say about social security changes.

Aged-care reform

Date of effect: 1 July 2021

The government will invest $17.7 billion in a ‘five year — five pillar’ aged care reform plan addressing:

Home care

• $6.5 billion for 80,000 additional Home Care Packages over the next two years
• $798.3 million to provide greater access to respite care services and payments to support carers.

Residential aged care services and sustainability

• $7.8 billion for a new funding model for residential aged care, with a $10 per person per day supplement of the Basic Daily Fee
• $117.3 million to support structural reforms and the implementation of a new Refundable Accommodation Deposit (RAD) Support Loan Program.

Residential aged care quality and safety

• $942 million to drive systemic improvements to residential aged care quality and safety.

Workforce

• $652.1 million to grow a bigger, more highly skilled, caring and values-based workforce.

Governance

• $698.3 million to improve governance across the aged care system.

Click here to find out what the experts say about aged care reform.

Changes to Child Care Subsidy

Date of effect: 1 July 2021

Changes will be made to the subsidy to provide more support to high-income earners and families with multiple children in care.

Changes include:

• removing the subsidy cap of $10,560 for couples earning $189,390 or more in a year
• for families with multiple children under five in childcare, the subsidy may increase by up to 30% for the second and subsequent children, up to a maximum of 95% if the parent/s meets the relevant activity and income tests.

Click here to find out what the experts say about social security changes.

Expert insights

Get a Budget breakdown from our experts — an accountant, financial planner, and economist — and find out what the changes and opportunities are for you.

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