Last Thursday, the Federal Government announced a $17.6bn stimulus package to support the Australian economy. Estimated to be worth around 0.9% of annual GDP (gross domestic product), the package is front-loaded in order to help instil confidence in businesses and households, and keep people employed.
The most important part of the package is a one-off payment of $750 to pensioners, social security, veteran and other income support recipients, and eligible concession card holders. This will go to about 6.5 million lower income Australians, will be tax free, and not count as income in the social security tests. It will be paid starting 31 March, with over 90% of payments made by mid-April. The cost is $4.8bn.
Aged pensioners receiving a part pension will also see a boost to their pension, with the deeming rate used to assess investment income being cut by 0.5%. From 1 May, the lower rate will reduce to 0.5% and the upper rate to 2.5%. About 900,000 Australians will see a pension rise, with the average affected age pensioner getting an increase of $219 a year.