New cost of living concession: A win for pensioners
By changing regulations (in the Government Gazette of 14 May) the State Government has now formally abolished these concessions (of up to $190 for pensioners, and $100 for self-funded retirees) on Council rates. The abolition takes effect from 1 July 2015.
However, this abolition was made with a promise to introduce, in law, a new 'Cost of Living Concession' of up to $200 annually for a wider range of recipients.
Details of the new Concession are available here:
Why are we talking about Pensioner Concessions?
On 14 May 2014 the Australian Government announced its decision to cut the National Partnership Agreement on Certain Concession Card and Senior Card Holders (NPA). This Federal Agreement provided approximately $27.7 million in funding for the 2013-14 financial year to cover all concessions to part pensioners within South Australia. It ended on 30 June 2014. The State Government maintained Council Rate Concessions paid under the South Australian Rates and Land Tax Remission Act 1986 for 2014-15.
However, it also announced it would stop concessions on Council rates at 30 June 2015, and formally did so on 14 May 2015.
The relationship between these two decisions was the subject of much comment by State and Federal politicians over 2014-15.
We have provided key facts below for those interested.
The concession was $190 for pensioners and concession card holders and $100 for self-funded retirees. We estimate that 160,000 South Australians, or one in 10 were due to be affected by the proposed cuts. So if it did not affect you, then it might well have affected your parents, grandparents or other relatives.
The LGA and SA Councils decided that our first task was to make people aware of the implications of these decisions and our opposition to negative changes to the concessions. Councils were not, and are not in a position to pick up a similar range of concessions themselves. To do so would have created significant inequity between Councils with high numbers of pensioners and those with low numbers as remaining ratepayers would have had to contribute more rates to fund them.
As a result, most Councils in early 2015 decided to let ratepayers know of the impending impact by inserting a flyer or letter into rates notices being sent at that time of year, or via websites, media etc.
On 14 May 2014 the Australian Government announced its decision to cut the National Partnership Agreement on Certain Concession Card and Senior Card Holders (NPA). This Federal Agreement provided approximately $27.7 million in funding for the 2013/14 financial year to cover all concessions to part pensioners within South Australia. It ended on 30 June 2014.
The State Government maintained Council Rate Concessions paid under the South Australian Rates and Land Tax Remission Act 1986 during 2014-15. However it has also announced it will stop concessions on rates at 30 June 2015.
From 1 July 2015, the State Government has chosen to cut Council rate concessions ($32.4 million). This will mean that Local Government concession recipients will suffer the $27.7 million NPA Commonwealth funding cut. In addition to passing on this cut in full, the State Government will also save approximately an additional $5 million.
Other States have addressed the removal of the NPA in a number of ways, some have continued to provide the funding that would have come through the agreement or adjusted other concessions so as to preserve the contribution towards rates. Notably, the NSW and WA State Governments have not yet announced their position for the 2015-16 year.
If the Commonwealth and State government continue to point the finger at each and take no responsibility for these cuts, in excess of 150,000 concession recipients in South Australia will receive a direct cost increase of up to $190 later this year on their Council rates, on top of any other rates movement.
On 4 December 2014, the LGA asked each Council to consider the following proposed resolution:
That the Council:
- Will not replace the withdrawn Federal and State Government funding for pensioner concessions;
- Agrees to participate in the LGA’s campaign to seek reinstatement of the concessions; and
- Agrees to insert a flyer in the next quarterly Council rates notice alerting ratepayers to the "Bill Shock" of the impact of removal of pensioner concessions on rates.
What has my Council decided? A list of council resolutions can be found here.