Tag Archives: Centrelink

Maximising your retirement benefits

By Robert Wright /June 01,2018/

After working hard for so many years, naturally you want your retirement to be as comfortable and enjoyable as possible. That’s why it’s worth knowing which types of government support you may be entitled to when you’re transitioning into this new phase of life.

If you’ve been putting money into super throughout your working years, this is likely to be your main source of income when you retire. However, you might also be able to access other allowances and concessions that can help you reduce your living costs.

And let’s face it – when you’re a retiree, every dollar counts. With this in mind, let’s take a look at some of the main government benefits on offer.

Age Pension

Once you reach age pension age (between 65 and 67 depending on your date of birth), you can apply for the Age Pension if your income and assets don’t exceed certain levels. Depending on your financial situation, you could be eligible to receive a full or partial Age Pension from the federal government.

There are different income and assets test thresholds for singles and couples, as well as for homeowners and non-homeowners under the assets test.

Under the assets test, if the value of your assets (not including your home) is below the lower threshold, you could receive a full pension – and if it’s between the two thresholds you may be eligible for a partial pension. However, if you’re above the upper threshold, you won’t receive any pension at all.

These thresholds are currently:

Single homeowner: $253,750 to $556,500
Single non-homeowner: $456,750 to $759,500
Couple homeowner: $380,500 to $837,000
Couple non-homeowner: $583,500 to $1,040,000

Your income (eg. if you’re still working) may also reduce the value of your pension. As a single pensioner, you can earn up to $168 a fortnight without it affecting your pension entitlement.

A couple can earn a combined fortnightly income of $300. Every dollar you earn above these thresholds will reduce your fortnightly pension by 50 cents.

Your age pension is the lower of the assets test and income test calculation.

Other allowances

On top of the Age Pension, you may also be able to access additional government payments, such as:

Carer allowance – if you give daily care to an elderly person or someone with a disability or serious illness.

Rent assistance – to help cover your rent if you receive an eligible government benefit and are renting privately.

Energy supplement – to help manage household costs if you receive an eligible income support payment.

Affordable health care

Even if you’re not eligible for the Age Pension upon reaching age pension age, you can still get a Commonwealth Seniors Health Card – as long as your annual income is less than $53,799 for singles and $86,076 for couples.

This card offers reduced cost medicines under the Pharmaceutical Benefits Scheme, bulk billing for doctor’s appointments and cheaper out of hospital medical expenses through the Medicare safety net.

Other discounts and concessions for seniors

You can apply for a Seniors Card once you reach 60 (or 65 for Queenslanders), as long as you’re working the required number of hours a week and you’re a permanent resident of your state. With your Seniors Card, you’ll get exclusive offers and significant discounts on a range of different services, as well as holidays and entertainment.

Different businesses in each state offer Seniors Card discounts. To find out what you’re eligible for, check the government website for your state or territory, or look for the Seniors Card sign in stores.

Additionally, if you’re receiving the Age Pension or another government allowance, you may also qualify for a Pensioner Concession Card. This card provides lower cost medicines under the Pharmaceutical Benefits Scheme, bulk billing for doctor’s appointments, cheaper out of hospital medical expenses through the Medicare safety net and assistance with hearing services. In addition, this card allows you to access many state based concessions.

These are just a few of the many benefits available – but the eligibility requirements are different for each one.

To find out more, please contact us.

Source: Colonial First State

Should you lend money to family?

By Robert Wright /June 26,2017/

You’re probably fairly used to helping your family out with a little extra cash here and there. Whether it’s pocket money for doing chores, or money to pay phone bills, go see a movie or buy clothes, for example.

But what happens when they put their hands out for help to buy the big ticket items? They might want some money to buy a car, pay for a holiday or even get a deposit together to buy their first home.

The question is, even if you can afford to help your family financially, should you? It could provide them with a helping hand that’ll really make a difference, but you also must ensure your needs are looked after and you’re not leaving yourself short.

Here are some things to think about:

Discuss how the money is going to be used. Is it something they could save up for or do they genuinely need your help?
Decide if you want the money back. Even if you can afford it now, think about whether you might need the money for other expenses or commitments later.
Agree on the terms of when and how the money will be repaid. If you decide on a loan, discuss how and when the loan could be repaid by, plus whether you will impose any sort of penalty (such as interest), if it’s not repaid on time.
Write it down. This might sound overly formal, but it sets the ground rules for making a true commitment to repay the loan.
Talk early and often to identify potential issues as they come up. Don’t wait until minor issues, such as late payments, become more serious.
Give them a refresher on managing money. This is a good way to really embed the principles of needs versus wants. Ask your family to work out how much they could put aside by using a savings calculator or budget calculator.
Ask for advice. If you’re lending a significant amount of money, you might want to check with your solicitor if there could be legal repercussions, including what happens to the loan if your child gets married or is in a de facto relationship.

Providing financial support in other ways

Gifting

It’s great, tax-free way of helping your family when they need financial help.

Just make sure you think carefully about whether your gift will put a dent in your retirement savings and if you’ll have enough for the lifestyle you want to lead when you wind down from work.

Also consider the impact on your Centrelink entitlements. If you’re receiving benefits, such as the Age Pension for example, a loan or gift to your child may impact on your payments and your financial security. You must tell Centrelink about any gifts or transfers within 14 days of when they have occurred.

Going guarantor

This is one way to help your family own their tomorrow ─ whether it’s buying a car or first home, but be careful not to put your own home or lifestyle at risk in the process. Make sure you only go guarantor for an amount that you can comfortably afford to pay if your family defaults on payments.

What else to consider

Whatever option you choose to help support your family:

Make sure the loan or gift is within your budget and won’t affect your everyday lifestyle or retirement.
Consider taking out insurance to cover you, or your family member, in the event of unforeseen circumstances.
It’s a good idea to get in contact with your financial adviser. Contact our office for more information

Source: AMP.

Your options in aged care explained

By Robert Wright /June 26,2017/

With multiple avenues to explore, thinking about aged care earlier rather than later could provide you or your loved one with greater flexibility.

It’s possible that in the future you, or someone close to you, may need some form of care or daily living assistance. With lots of information to sift through and the conversation sometimes a tricky one to approach, we’ve pulled together some information to make navigating aged care an easier process.

The current state of affairs

The Australian government has projected that in 40 years the number of people aged over 100 will be 300 times what it was in the mid-1970’s[1], with an ageing population shining a light on aged care services.

Meanwhile, industry figures show[2]:

More than 50% of people over age 45 have previously, or are currently, dealing with aged care services for themselves, or on someone else’s behalf.
The likelihood a woman over age 65 will require residential care in her lifetime is 54%. For men, that figure is slightly lower at 37%.
The total cost of aged care in Australia is projected to reach around $290 billion by 2055.

Aged care services available

There are several types of aged care services available. Each has an eligibility criteria and an assessment process which can be organised through the government’s My Aged Care initiative.

Options include:

Help in your own home – if you are generally able to manage, but require assistance with daily tasks, there are various home-care packages available.
After-hospital (transition) care – if you’ve been in hospital, but need assistance while you recover and additional time to think about the best place to live long-term, this type of service can be provided in your own home or ‘live-in’ setting for 12 to 18 weeks.
Respite care – this service provides support for you and your primary carer when your carer has other duties to attend to, or when they’re on holiday.
Residential aged care – this is where you live in full service residences and receive ongoing care and support. If it’s the best option for you, it’s a good idea to research and visit several residences to find the right place in terms of location, services and activities.
Short-term restorative care – this provides a range of services over eight weeks to help prevent or slow down difficulties with completing everyday tasks. It aims to improve wellbeing and independence, and delay or reverse the need to enter long-term care.

The costs

The costs for after-hospital, respite and short-term restorative care depend on the level of care and how long it’s required.

The fees for an at-home-care package or residential aged care can also vary and will depend on income and assets, as assessed by the Department of Human Services or the Department of Veterans’ Affairs.

With a residential aged care facility there may be one-off payments (or deposits), as well as ongoing fees for care, accommodation and daily living expenses.

If you’re a self-funded retiree, it’s a good idea to seek an income assessment before commencing an at-home-care package or entering residential aged care to avoid paying maximum fees and charges.

Having the discussion

Deciding to have a discussion is the first step. So, if you’re in a situation where you need to approach the topic of aged care, whether it’s for yourself or a loved one, it’s better to do it sooner rather than later.

Remember, it may not be easy and it’s fairly normal for people to resist this type of conversation. For this reason, it’s a good idea to approach the topic as a series of conversations so that you (or your loved one) are in a better position to articulate what you want to happen.

Things worth considering when approaching the topic include:

Being deliberate about the time and place for these conversations
Thinking about whether other family members should be included
Whether relevant paperwork is accessible and in order
Whether third parties, like the family doctor, could help by offering their perspective.

There are complexities and tax implications to work through when it comes to aged care, including for example whether or not to sell the family home, so it’s a good idea to get professional advice.

Source: AMP

[1] http://www.treasury.gov.au/PublicationsAndMedia/Publications/2015/2015-Intergenerational-Report

[2] https://www.superannuation.asn.au/media/media-releases/2015/media-release-26-november-2015

Are you prepared for changes to the Age Pension assets test?

By Robert Wright /November 23,2016/

How the assets test will work in 2017 could increase your Age Pension entitlements, or take some or all of them away.

With revisions to the Age Pension assets test just around the corner, it’s important to understand how the changes could impact you, particularly with part-pension thresholds somewhat tighter than initially projected.

These thresholds are the value of assets you can own (excluding your home) before you lose eligibility for the Age Pension.

Who the changes will affect

The Age Pension assets test changes will affect Age Pension recipients, aged 65 and over. To be eligible for a full or part Age Pension, retirees must satisfy an income test and an assets test, as well as other requirements.[1]

According to reports, changes to the assets test, effective 1 January 2017, will see more than 50,000 additional Australians receive the full Age Pension. Meanwhile, roughly 300,000 retirees on the part pension will have their entitlements reduced, with about 100,000 losing all entitlements.[2]

What’s actually changing in 2017?

The Age Pension assets test thresholds will change. The cut-off thresholds previously announced were only projections, as Age Pension rates were not updated until 20 September 2016.

Following the recent update to Age Pension rates, the part-pension cut-off thresholds are a bit tighter than previously announced, meaning more people could be affected.[3] The lower thresholds for eligibility for a full pension remain unchanged.

Table one: Full-pension thresholds

If your assets are below the thresholds in table one, you will be eligible for a full pension under the 2017 assets test.[4]

Full pension	Current asset limits	2017 asset limits
Non-homeowner (single)	$360,500	$450,000
Non-homeowner (couple)	$448,000	$575,000
Homeowner (single)	$209,000	$250,000
Homeowner (couple)	$296,500	$375,000

Table two: Part-pension thresholds

Table two outlines the assets test cut-off point for those on a part pension. If you have assets above these limits, a part-pension will no longer be payable.[5]

Part pension	Current asset limits	2017 asset limits
Non-homeowner (single)	$945,250	$742,500 (initial projection $747,000)
Non-homeowner (couple)	$1,330,000	$1,016,000 (initial projection $1,023,000)
Homeowner (single)	$793,750	$542,500 (initial projection $547,000)
Homeowner (couple)	$1,178,500	$816,000 (initial projection $823,000)

The Age Pension assets test taper rate will increase

This means that pension payments will reduce by $3.00 per fortnight for every $1,000 of assets above the lower assets test threshold. Currently, the taper rate is $1.50 (75c each for couples) per fortnight, which means from 1 January 2017 pensions will reduce at a faster rate.

What assets are taken into account?

The market value of most of your assets is taken into account when calculating your Age Pension. This includes, but is not limited to, things such as:

Property (excluding your home)
Motor vehicles, boats and caravans
Financial investments
Superannuation if you’re over Age Pension age
Business assets
Household contents and personal effects

Upside to losing your benefits

People who lose their Age Pension in 2017 as a result of the changes will automatically be entitled to receive a Commonwealth senior’s health card and/or a low income health care card. These cards will provide access to things such as Medicare bulk billing and less expensive pharmaceuticals.

Preparing for the changes

Depending on how the changes may impact you, there are a number of things worth exploring and talking to us about, including:

How you might replace any lost income if your entitlements are reduced
How you might be able to trim down your assets before the changes come in, to retain your current entitlements, for example; gifting within annual limits, moving savings into a spouse’s super, or bringing holidays or home renovations forward
How strategies outside of asset reduction may be able to help—working for longer or reviewing your budget in retirement

To find out how your Age Pension entitlements may be affected, please contact us.

Source: AMP

[1] http://www.humanservices.gov.au/customer/services/centrelink/age-pension

[2] http://www.superguide.com.au/how-super-works/300000-retired-australians-to-lose-some-or-all-age-pension-entitlements

[3] http://www.superguide.com.au/how-super-works/300000-retired-australians-to-lose-some-or-all-age-pension-entitlements

[4] https://www.humanservices.gov.au/customer/enablers/assets

[5] https://www.humanservices.gov.au/customer/enablers/assets