Spry Roughley Insights

2024-25 Federal Budget: Social Security

Written by Spry Roughley | May 14, 2024 11:45:38 PM
Social security deeming rates frozen

Social security deeming rates will be frozen at their current levels for a further 12 months until 30 June 2025. The lower deeming rate will remain at 0.25% and the upper deeming rate will remain at 2.25%.

Source: Budget Paper No 2, p 170.

Greater flexibility for carer payment recipients

Carer payment recipients will have greater flexibility with their participation requirements. 

From 20 March 2025, the existing 25 hours per week participation limit for carer payment recipients will be amended to 100 hours over 4 weeks. In addition, the participation limit will only apply to employment and will no longer include study, volunteering activities and travel time.

Carer payment recipients exceeding the participation limit or their allowable temporary cessation of care days will have their payments suspended for up to 6 months, rather than cancelled. Recipients will also be able to use single temporary cessation of care days where they exceed the participation limit, rather than the current 7-day minimum.

Source: Budget Paper No 2, p 166.

Eligibility for higher rate of Jobseeker payment to be extended

Eligibility for the higher rate of Jobseeker payment will be extended to single recipients with a partial capacity to work of zero to 14 hours per week from 20 September 2024.

The higher Jobseeker payment rate is currently provided to single recipients with dependent children and those aged 55 and over who have been receiving an income support payment for 9 continuous months or more.

Source: Budget Paper No 2, p 164; Budget Factsheet — Easing cost-of-living pressures, p 2.

Commonwealth Rent Assistance to increase

The maximum rates of the Commonwealth Rent Assistance (CRA) will increase by 10% from 20 September 2024 to help address rental affordability challenges for recipients.

This measure builds on the 2023–24 Budget measure to increase the CRA maximum rates by 15%. 

Source: Budget Paper No 2, p 167.

Social security means testing and the Douglas decision

Funding will be provided to implement a social security means test treatment for military invalidity payments affected by the Full Federal Court’s decision of FC of T v Douglas 2020 ATC ¶20-773; [2020] FCAFC 220. In that case, the court held that, from 1 July 2007, certain invalidity pension payments for veterans and their beneficiaries were to be treated as superannuation lump sums, not as superannuation income stream benefits.

The funding of $11.9 million over 5 years from 2023–24 (and $0.9 million per year ongoing) will ensure that the Douglas decision does not affect income support payment rates for veterans who receive an invalidity payment from the Military Superannuation and Benefits Scheme and the Defence Force Retirement and Death Benefits Scheme, relative to the pre-Douglas arrangements.

Source: Budget Paper No 2, p 171.

Social security agreement between Australia and Uruguay

Funding will be provided to enable Australia to enter into a bilateral social security agreement with Uruguay. Social security agreements enable Australia and the agreement countries to share the costs of providing retirement income support to those who have split their working life between countries. Australia currently has 32 bilateral social security agreements in operation.

Source: Budget Paper No 2, p 169.

Lower foreign investment fee for build-to-rent properties

Foreign investors will be allowed to purchase established build-to-rent properties with a lower foreign investment fee.

The lower foreign investment fee will be conditional on the property continuing to be operated as a build-to-rent development. Foreign investors are generally prohibited from purchasing established dwellings unless the purchase is to redevelop the land resulting in an increase in dwellings or for a temporary resident’s accommodation during the period of their Australian residency. An exception also applies for foreign companies providing accommodation for Australian-based staff.

The measure was first announced on 1 May 2024.

Source: Budget Paper No 2, p 75; Treasurer’s press release “Reforms to strengthen Australia’s foreign investment framework”, 1 May 2024.