Federal Budget and seniors: PLS changes are welcomed


Major enhancements that Pension Boost has been advocating for will be made to the Pension Loans Scheme (PLS) from 1 July 2022 

  • A No Negative Equity Guarantee will apply to PLS loans
    This has been one of the major advocacy reforms Pension Boost has been pushing and so we are very delighted to see that this important protection for seniors will be introduced to level the playing field for all reverse mortgage solutions
  • Lump-sum option to be introduced
    Singles will be able to access up to $12,385 and couples up to $18,670 via up to two advances in any 12 month period. (Note: this represents 50% of the annual rate of the full Age pension). This is more great news as Pension Boost has been advocating for this as it will help many seniors meet certain larger expenses like repaying credit cards, undertaking home repairs, or replacing an ageing car
  • Investment in raising awareness through improved public awareness and branding. This is crucial in our view as very few seniors are aware the government offers this Scheme and what it offers them.

More seniors to access downsizing contributions to super

  • From 1 July 2022, seniors choosing to downsize who are at least 60 years of age will be able to contribute up to $300,000 each from their home sale into their super.
  • The change is that previously you had to be 65. You continue to need to have owned your property for at least 10 years.
  • This measure seeks to assist seniors to fund their retirement and to release housing stock for larger families
  • This measure is only expected to benefit self-funded retirees not eligible for the age pension or possibly those with modest homes on the full age pension
  • Beware of downsizing as it can lead to increased financial assets which could impact your age pension eligibility. Pension Boost recommends you seek advice before downsizing
  • An alternative to downsizing which doesn’t impact your age pension eligibility is accessing the government’s Pension Loans Scheme (PLS) to release the equity in your home to assist with funding your lifestyle

Easier for self-funded retirees to top up their super

  • From 1 July 2022, self-funded retirees will be able to contribute to super without meeting the work test (which is being abolished)
  • Currently, people between the ages of 67 and 74 need to satisfy the work test to be able to top up their super with voluntary contributions

Aged Care to receive much-needed funding

  • Post the damning royal commission into aged care, the government will increase funding into aged care by approximately $18bn over 4 years
  • An additional 80,000 in-home care packages will be funded, bringing the total to 275,000 packages
  • An additional $10 per resident per day will be provided for residential care facilities
  • Includes significant investment in resources, staff levels, skills and training
  • Whilst a welcome and needed improvement, industry estimates are that an additional $7bn per annum are required to solve the problems identified by the royal commission, noting that the government already supports the aged care sector with $21bn in annual funding

What was disappointing about this Budget?

Pension Boost continuará abogando en nombre de las personas mayores por la  tasa de interés PLS  comparada  con la Tasa Oficial en Efectivo de la RBA (o similar) para mejorar la transparencia para las personas mayores. La tasa PLS (actualmente 4.50% anual) se revisó por última vez el 1 de enero de 2020 y el gobierno no aprobó las tres reducciones de OCR de emergencia de COVID-19 durante 2020 (por un total de 0.65%).

Pension Boost también esperaba ver enmiendas para reducir las tasas de pensión por vejez para aumentar los derechos de pensión por vejez para las personas mayores, pero esto también se ha mantenido sin cambios. Los cambios en la tasa de reducción introducidos en enero de 2017 afectaron negativamente a muchos jubilados con varias presentaciones de la industria para que estos retrocesos no fueran atendidos.


Paul Rogan
Founder and CEO
Pension Boost
M: (+61) 0423 780 113