1 Carers Australia 2014/15 Federal Budget Summary Overview This document lists the major 2014/15 Federal Budget changes which are either carer-specific or are likely to more generally impact on carers. Among the major changes are; Indexation of Carer Payment and DSP to the Consumer Price Index from Eligibility reviews of certain DSP recipients under 35 years and new participation requirements. New earn or learn measures for young job seekers including a six month waiting period and Work for the Dole requirements. New co-payments for GP visits, pathology, diagnostic imaging and pharmaceuticals. Some decreases in the Home Support element of the Aged Care reforms. A massive number of changes have been introduced in this budget and we have not had time yet to either unpack or provide commentary beyond the Carers Australia media release and the media release of the National Disability and Carer Alliance. We will be providing more detailed analysis of specific measures and their impacts as soon as possible. We also suggest that you follow the links below to the media releases of the following organisations for further more specific commentary. Australian Council of Social Services National Welfare Rights Network Mental Health Council of Australia Palliative Care Australia Alzheimer s Australia Council of the Ageing
2 Carers Young Carer Bursary Programme The Government will provide $3 million to fund the Young Carer Bursary Programme to provide support for young carers in Australia who look after people with disability, people with physical or mental health issues, or older people in need of care. The programme is designed to assist young carers to continue their studies by relieving the financial pressure on them to undertake part-time work in addition to their education and caring responsibilities. The funding will provide 150 bursary payments of $4,000, $6,000 or $10,000 per annum for three years from January The eligibility criteria will target young carers up to 25 years of age in greatest financial need. Index Pension and Pension Equivalent Payments by the Consumer Price Index: From 1 September 2017 the Carer Payment, Age Pension and the Disability Support Pension will be indexed to the Consumer Price Index (CPI). This measure will commence on 1 July 2014 for Parenting Payment Single recipients. Currently, these payments are indexed in line with increases in the CPI or Male Total Average Weekly Earnings or the Pensioner and Beneficiary Living Cost Index whichever is highest Disability and Carers Industry Advisory Council (DCIAC) The Government will provide $0.9 million over four years to establish the Council). The DCIAC will be co-chaired by a respected industry expert and the Assistant Minister for Social Services. The DCIAC will provide advice and recommendations to Government on proposed legislation and policies affecting the disability and carers sectors. The council will bring together industry, the service sector, peak bodies, people with disability and carers to work closely with Government on policies affecting people with disability and ways to reduce red tape across the sector. The Council will replace the former National Disability and Carer Council.
3 Maintain eligibility thresholds for Australian Government payments for 3 years The Government will achieve savings of $1.5 billion over four years by maintaining eligibility thresholds* for pension and pension related payments and non-pension payments for three years. Eligibility thresholds for the Aged Pension, Carer Payment, DSP and Veterans Service Pension will be maintained for three years from 1 July 2017, and from 1 July 2014 for Newstart Allowance, Youth Allowance, Family Tax Benefit, Child Care Benefit, Child Care Rebate. *This refers to the income and assets test free areas for these payments. Recipients with income or assets over the relevant free areas would forego an increase in their pension that would otherwise have occurred. Newstart Allowance and Youth Allowance Waiting period and Work for the Dole From 1 Jan 2015 new jobseekers up to 30 years of age applying for Newstart Allowance or Youth Allowance (Other) must demonstrate appropriate job search and participation in employment services support for six months before receiving payments. After six months, claimants will be required to participate in 25 hours per week Work for the Dole to receive income support, and following this may continue to access employment services for a further six month period, including access to a wage subsidy in lieu of income support. From 1 July 2015, existing recipients of Newstart Allowance and Youth Allowance (Other) who are under 30 years of age will also become subject to these new arrangements. These people will have already service six months on Work for the Dole. Current recipients of Newstart Allowance up to 30 years of age will also be covered by the same requirements from 1 July If the jobseeker is unable to secure employment after six months of Work for the Dole and Newstart or Youth Allowance (O), a wage subsidy may be available to an employer for six months. Rather than continue looking for work, job seekers can elect to undertake training or study which may make them eligible for student benefits. Exemptions: Those with a work capacity of less than 30 hours per week; Principal carers of a child or parents with 35% or more care of a child; Part-time apprentices; Disability Employment Service clients; Stream 3 or 4 jobseekers under employment services Recognition of past employment: The six month waiting period will reduce depending on past employment. Part-time employment would also be recognised on a pro-rata basis. Increased eligibility age: From 01 Jan 2015, the Government will increase the age of eligibility for Newstart Allowance (and Sickness Allowance) from 22 years to 24 years of age. Current recipients of
4 Newstart Allowance and Sickness Allowance, aged 22 to 24 years on 31 December 2014 will remain on those allowances. Summary Up to 6 month waiting period with job search obligations until qualifying for income support Discount from previous employment Strengthened activity and job search obligations 25 hours per week Work for the Dole Limited Portability for Student Payments The Government will limit the Six-Week Portability Period for Student Payments from 01 October Currently, students are able to receive income support while travelling overseas for up to six weeks. This measure limits student payments to students travelling overseas to those undertaking eligible study or training that counts toward their Australian qualification, receiving eligible medical treatment, or attending an acute family crisis. Apply the One-Week Ordinary Waiting Period to all Working Age Payments The Government will achieve savings of $231.7 million over five years by applying the One-Week Ordinary Waiting Period (OWP) to all Working Age Payments from 01 October All claimants of Newstart Allowance and Sickness Allowance are required to wait one-week before receiving payment, unless the claimant is exempt or the waiting period is waived. This measure will extend to the OWP to claimants of Parenting Payment, Widow Allowance and Youth Allowance (other). This measure will also remove the current rule that enables the OWP to be served concurrently with other applicable waiting periods. Disability Support Pension Review of Disability Support Pension recipients DSP recipients aged under 35 years who were granted DSP between 1 January 2008 and 31 December 2011 will now be assessed under the current DSP Impairment Tables. Recipients who are granted continued eligibility following this review will be required to complete a programme of activities to build their work capacity. The measure will terminate on 30 June Recipients granted DSP before 1 January 2008 or who have a severe impairment with work capacity assessment of less than eight hours a week will be exempt. Compulsory participation requirements for recipients aged under 35 years The Government will introduce compulsory activities for DSP recipients under 35 years of age with an assessed work capacity of eight hours or more a week who have a participation plan. These activities will vary depending on a person s circumstances and will focus on obtaining employment. These activities could include Work for the Dole, job search, work experience, education and
5 training, connection with Disability Employment Services. Sanctions for non-compliance will be introduced. DSP recipients with a severe impairment and an assessed work capacity of less than eight hours a week will be exempt. New portability requirements for DSP The Government is reducing the amount of time that DSP recipients can leave Australia and still receive DSP. Recipients will receive DSP for a maximum of four weeks in a 12 month period should they travel overseas. All DSP recipients who leave Australia on or after 1 January 2015 will be subject to the new rules. Currently, DSP can be paid for absences from Australia for up to six weeks, on multiple occasions in any one year. Portability extension and exception provisions, which allow a longer or unlimited portability period under special circumstances, will continue to apply. Aged Care National Respite for Carers Programme- redirection The government will achieve savings of $7.7 million by not proceeding with further grants rounds in under the National Respite for Carers Programme, with $965.1 million over four years remaining in the Programme. This $7.7 million represents unallocated funds for the 2013/14 financial year. Commonwealth Home Support Programme reduced rate of real funding growth The Government will achieve savings of $1.7 billion over six years from 1 July 2018 by reducing the rate of real growth in the Commonwealth Home Support Programme from six per cent annually to 3.5 per cent annually. This will broadly align annual growth in the Commonwealth Home Support Programme funding with annual growth in the population aged 65 years and over. This growth funding is allocated by the Government in addition to the annual price indexation of programme funding. Aged Care Payroll Tax Supplement The Government will achieve savings of $652.7 million over four years by ceasing Payroll Tax Supplement payments to currently eligible residential aged care providers from 1 January New funding for aged care programmes $10.0 million over three years to the Lebanese Muslim Association to build a residential aged care service that will provide culturally appropriate aged care in Western Sydney.
6 $10.0 million over two years to support the provision of culturally appropriate residential aged care to the Maronite and other Arabic-speaking Christian communities of Western Sydney. Improving the allocation of home care places The Government will bring forward the allocation of a number of home care places to allow for a more consistent annual release of operational home care places across the period to The number of new home care places currently allocated for release beyond the forward estimates will not be affected by this measure. This measure is Budget neutral over the forward estimates. Reprioritising the Aged Care Workforce Supplement The Government will reprioritise funding of $1.5 billion over five years from the Aged Care Workforce Supplement by increasing aged care subsidies for home and residential care providers and relevant community programmes by 2.4 per cent on 1 July 2014 and providing an ongoing 20% increase in the Viability supplement to eligible residential aged care providers. The Government will also provide non-ongoing funding of $0.8 million to meet commitments to those providers that signed onto the Supplement. Health Patient Contributions for GP, pathology and diagnostic imaging services From 01 July 2015, the Government will reduce the Medicare Benefits Schedule (MBS) rebates by $5 for standard general practitioner consultations and out-of-hospital pathology and diagnostic imaging services and allowing the providers of these services to collect a patient contribution of $7 per service. For patients with concession cards and children under 16; the rebate will only be reduced for the first 10 services in each year, after which it will return to current benefit levels. This means a concession card holder can expect to pay $7 for each service for a maximum of 10 services or $70. Increased co-payments for pharmaceuticals and increased safety net thresholds Co-payments will increase for general patients by $5.00 (from $37.70 to $42.70) and for concessional patients by $0.80 (from $6.1 to $6.90) in PBS safety net thresholds will increase each year for four years form 1 January 2015, with general safety net thresholds to increase by 10% each year and concessional safety nets to increase by the cost of two prescriptions each year. Case study: Currently, person X pays $366 in PBS co-payments; $6.10 for 60 PBS medicines, before reaching the safety net, then receives the last 20 PBS medicines for free. From 01 Jan 2015 person X will pay $427.8 in PBS co-payments. This includes $6.90 for 62 PBS medicines before reaching the safety net, then receiving the last 18 PBS medicines for free. Person X will pay $61.80 more in 2015 for his/her medicines.
7 New Medicare Safety Net The Government will achieve savings of $266.7 million over five years by simplifying Medicare safety net arrangements. From 01 January 2016 there will be a new Medicare Safety Net. Safety net benefits will be calculated at 80 per cent of out-of-pocket costs, but the total benefit payable (rebate plus safety net) will be capped at 150 per cent of the MBS (Medicare) set fee. The new $7 patient contribution will not be included in these safety net arrangements Thresholds: Current Extended Medicare Safety Net (2016) New (2016) Concessional patients: $654.3 $400 Family Tax Benefit Part A $654.3 $700 family General Single $2,050 $700 General Family $2,050 $1,000 Boosting Dementia Research The government will provide $200 million over five years (including $40.0 million in ) to boost research to improve the treatment of dementia in Australia. Medical scientists and researchers will be supported by increasing the number of available research grants, scholarships and fellowships for dementia related research. Additional assistance will be provided to the Clem jones Centre for Ageing Dementia Research which focuses on the prevention and treatment of dementia. Funding will help establish a National institute for Dementia Research to identify and coordinate research priorities and translate existing dementia research into policy and practice. Establishment of Primary Health Network The Government will refocus primary care funding by replacing Medicare Locals with Primary Health Networks from 01 July The Primary Health Networks will establish Clinical Councils, with a significant GP presence, and local Consumer Advisory Committees that are aligned to Local Hospital Networks, to ensure primary health care and acute care sectors work together to improve patient care. Headspace programme additional funding Additional $14.9 million over four years to establish 10 new headspace sites and conduct a two year evaluation of the headspace programme Partners in Recovery reduced funding Savings of $53.8 million by deferring the establishment of the remaining 13 partners in Recovery orgs for two years from The existing 48 organisations will continue to provide people who
8 have a severe and persistent mental illness and complex support needs with integrated support that coordinates clinical, housing, education, employment, income and disability services. This deferral will enable the effectiveness of the existing sites and their interaction with the NDIS to be assessed. Other mental health programmes It is understood that Personal Helpers and Mentors will be continued for 12 months, but providers are awaiting clarification. Funding for the Mental Health Nurses Incentives Program has been extended for 12 months ($23.4 million in ). Funding originally slated for Partners in Recovery in the 13 remaining Medicare Locals regions will not go ahead, though existing PiR consortia will continue. Housing National Partnership Agreement on Homelessness extension The National Partnership Agreement on Homelessness will be extended for a further year. National Rental Affordability Scheme The Government will achieve savings of $235.2 million over 3 years by not proceeding with Round 5 of the National Rental Affordability Scheme (NRAS). Funding for incentives from earlier rounds that are uncontracted or not used within agreed timeframes will be returned to the Budget. Funding for tenanted NRAS properties is not affected. Employment Connection Interviews and Job Seeker Workshops- cessation The Government will achieve savings of $4.4 million in by ceasing funding for Building Australia s Future Workforce- Connection Interviews and Job Seeker Workshops, on 30 June Restart- Assistance for mature age job seekers Additional $304.1 million over four years from to boost the wage subsidy for mature age job seekers, through a Restart Programme. From 1 July 2014, a payment of up to $10,000 will be available to employers who hire a mature age job seeker (including those on DSP) aged 50 years or over. Payments will commence after the worker has been employed for at least six months and will be paid ($3,000 after 6 months employment; $3,000 after 12 months; $2,000 after 18 months; $2,000 after 24 months) Stronger Compliance Arrangements for Job Seekers Who Refuse or persistently Fail to Meet Requirements
9 The Government will achieve savings of $20.9 million over four years by applying a stronger deterrent to job seekers who refuse work without a good reason or persistently do not comply with their activity requirements. From 15 Sept 2014 all job seekers who refuse any work without a good reason will lose their payment for 8 weeks and will no longer be permitted to waive their penalty through participation in additional activities or due to financial hardship. The 8 week non-payment period will also apply to all job seekers who incur penalties for persistent non-compliance. Job seekers will only be given one opportunity to waive the penalty for persistent non-compliance while in receipt of an income support payment. Job Services Australia- restricting participation for Volunteer Job Seekers Savings of $52.5 million over four years by limiting the number of times that volunteer job seekers can access JSA to one occasion. Job seekers may subsequently access JSA if they commence income support, move to a different income support payment, or were prevented from continuing their participation due to circumstances beyond their control, such as illness or caring responsibilities. Volunteer job seekers are job sekeers who are not subject to an activity test or participation requirements. Currently these job seekers are eligible to participate in JSA as often as they choose. Family Payments and Benefits Reforms to Family Tax Benefits New threshold: The Government will reduce the Family Tax Benefit Part B (FTB-B) primary earner income limit from $150,000 per annum to $100,000 per annum, from 1 July The income threshold for the Dependent (Invalid and Carer) Tax Offset will also be reduced to $100,000, as it is linked to the FTB primary income earner limit. Age eligibility: FTB-B will be limited to families whose youngest child is younger than six years of age from 1 July As a transitional arrangement, families with a youngest child aged six and over on 30 June 2015 will remain eligible for FTB-B for two years. Maintaining rates: The Government will achieve savings by maintaining the current FTB payment rates for two years from 1 July Under this measure, indexation of the maximum and base rates of FTB Part A, and the rate of FTB Part B will be paused until 1 July New allowance for single parents: New allowance for single parents on the maximum rate of FTB Part A whose youngest child is aged between 6 and 12 from the point when they become ineligible for FTB B. $750 for each child aged between 6 and 12 from 1 July 2015.
10 Reforms to Large Family Supplement The Government will limit FTB-A Large Family Supplement (currently $ per child per annum) to families with four or more children from 1 July The Large Family Supplement will be paid in respect of the fourth and each subsequent child in a family. Cease indexation of the Clean Energy Supplement The Government will achieve savings of $479.1 million over five years by removing further indexation from payment of the Clean Energy Supplement (CES). This will fix the rate of payment at the relevant rate payable prior to 1 July The CES is paid to all recipients of social welfare payments. Summary: From 1 July 2015: FTB-B payments paid until youngest child turns six FTB-B higher earner income test will be $100,000 Single parents who receive the maximum rate of FTB-A will receive additional assistance of $750 per year per child (aged between 6 and 12 years) once their youngest child turns six FTB-A and FTB-B end of year supplements will be $600 and $300 respectively. Large Family Supplement will be paid for the fourth and each subsequent child in a family. Concessions Certain Concessions for Pensioners and Seniors Card Holders The Government will achieve savings of $1.3 billion over four years by terminating the National Partnership Agreement on Certain Concessions for Pensioners Concession Card and Seniors Card Holders from 1 July This Agreement contributes to state and territory government provision of certain concessions for pensioners and seniors. Commonwealth Seniors Health Card- annual indexation of income thresholds The Government will provide $95.8 million over five years from to index current income limits for the Commonwealth Seniors Health Card by the Consumer price Index from September This will allow more retirees access to medicines listed on the PBS at concessional rate. Commonwealth Seniors Health Card include untaxed superannuation income in the eligibility assessment The Government will achieve savings of $20.9 million over five years by including untaxed superannuation income in the assessment of income to determine eligibility for the Commonwealth Seniors Health Card (CSHC) from 1 January The assessment of superannuation income will be the same for CSHC holders as for Age Pension recipients and will align with the Budget measure to deem the balances of account-based superannuation of pensioners from 1 January 2015.
11 Government Agencies To be abolished - COAG Reform Council - Prime Minister s Indigenous Business Policy Advisory Group Agencies being folded into departments - Health Workforce Australia - General Practice Education and Training - Australian National Preventive Health Agency To be merged with other Agencies - Functions of Private Health Insurance Administration Council to be folded into Australian Competition and Consumer Commission and Australian Prudential Regulation Authority - New Health Productivity and Performance Authority will combine Australian Commission on Safety and Quality in Health Care, Independent Hospitals Pricing Authority, National Health Funding Body, National Health Funding Pool Administrator, National Health Performance Authority, Australian Institute of Health and Welfare Already being abolished - Australian Charities and Not for Profit Commission - Social Inclusion Board - Advisory Panel on Positive Ageing - National Housing Supply Council - National Children and Family Roundtable - Prime Minister s Council on Homelessness - Centre for Workplace Leadership Advisory Group