PENSIONERS and retirees with a Commonwealth Seniors Health Card (CSHC) are set to be overcompensated under the $23 per tonne carbon price, but some will get more than others.
Single pensioners will get $338 per year and couples will get $510 per year, paid as the Clean Energy Supplement.
CSHC holders will get the same amounts if they pay no tax. If they do pay tax, depending on their income, compensation will be even higher.
If a household does not get a Centrelink payment or pay tax, but has a low income (for example, a retiree under pension age who lives off superannuation), they can apply for a low-income supplement of $300 per year.
The compensation will be paid up front before prices rise so that the extra cash is in pensioners’ and superannuants’ pockets before the higher bills roll in.
Singles will get $250 and couples will get $190 each in May or June next year (before the carbon price commences in July), with the remainder of the compensation for the year to be paid in March 2013.
The cost of living is expected to go up by 0.7% in the first year of the tax, which, according to Treasury, translates to an extra $204 per year for single pensioners and $284 for couples.
The compensation should cover most retirees, except for the very well-off. There are only about 280,000 retirees who do not get a pension or the CSHC because their income is too high.
If they pay tax, they should get a tax break of some description, unless they’re on very high incomes.
If they don’t pay tax, then they should be eligible for the CSHC because the only means-test that applies is based on taxable income. They’d then get compensation through the CSHC.
There’s also good news for pensioners in public and community housing: the assistance will be paid as a supplement rather than as part of the base rate of pension which means that it will not be assessed as income when calculating rent.
Pensioners will also be able to choose whether they want it paid fortnightly or quarterly.
The rates of assistance will be reviewed on an annual basis to make sure it’s enough and keeps pace with rises in the price on carbon, and the Australian Bureau of Statistics in conjunction with the Department of Climate Change & Energy Efficiency will survey householders to get more information on energy use and energy efficiency.