By the government we mean all parties because as the last year has shown us the senate is the filter that decides and you know who is on that.
How did we arrive at that Number?
Here are the proposed changes to Pension asset test thresholds
The government will reduce the maximum value of assets outside the family home a couple can hold while still qualifying for a part pension, from $1.15 million to $823,000.
The threshold for single retirees will drop from $775,000 to $547,000.
Pension assets test thresholds
The government has announced the following changes to the pension assets tests thresholds:
| Full pension (Assets below) |
Part pension (Assets below) |
||
| Single – Homeowner |
$250,000 |
$547,000 |
|
| Single – Non Homeowner |
$450,000 |
$747,000 |
|
| Couple – Homeowner |
$375,000 |
$823,000 |
|
| Couple – Non Homeowner |
$575,000 |
$1,023,000 |
|
Simply as today’s 1 year term rate = 2.9% X 823,000 = 23,867
Over that then you are on your own although you will have access to the health card if you actually believe in the health system.
This allows for the fact that you own your house which for maybe 40% of couples who have been separated, divorced, made redundant, retired due to ill health or otherwise is unlikely to be the case.
Then there is this.
| In addition, once you exceed the lower assets test threshold the tapering rate will change from a $1.50 per $1,000 reduction to $3.00 per $1,000. These changes impact not just the Age Pension but other pensions paid by both Centrelink and Department of Veterans’ Affairs such as the Disability Support Pension and the Carer Payment |
What that means for you is if you are caught in the middle then you will also receive less in pension from 1st January 2017.
So a single non home owner can earn up to 747,000 X 2.9% = 21,663 before she loses all pension payments.
What happens if interest rates fall & arguably globally that is very possible?
Do you want to take on & invest elsewhere & take on higher risk when that might take you out of your risk comfort zone?
How much of your portfolio do you invest in growth or higher income assets.?
Of course you don’t want to be at all ill or reliant on your GP as P stands for practice.
Surveys have found the average couple spends 140p.w. on health related matters.
We do have the answer that works for us on health if you care to listen.
You might consider this as an option form Morningstar.
To qualify for the age pension, Biti says people may look at ways to reduce assessable assets, but such opportunities are not always wise options.
Options include: gifting within allowable limits; purchasing a funeral bond or pre-paying funeral expenses; buying a more expensive home or doing the upgrades you want; moving into aged care and paying a refundable accommodation bond; buying an expensive car and driving out of the showroom (it will be worth less than what you pay for it); ensuring you don't overestimate the value of your property/contents; and spending more money or not saving.
"Before implementing a strategy to reduce assessable assets, people should ensure they will still have sufficient resources to meet cash flow for their future lifestyle needs and health/aged care needs," Biti says.
That option only puts you really in the hands of Centrelink & do you want that?
The changes to aged pension eligibility were flagged late last week by Social Services Minister Scott Morrison who said 90% of the 3.7 million Australians who receive the pension or pension-linked payments will either be better off or see no change to their payments, approximately 91,000 current part-pensioners will no longer be eligible for the pension and another 235,000 will have their payments reduced.
Then we have Chris Mango saying that hard Labor will consider & run as an issue in the next election a taxx on the wealthy & their supers.
Yep government legislation is a big risk.
How do we define wealthy as an income of 23, 867 is surely not wealthy?
And Please define fair.
These changes are more than a year away which is a reason they went through. However compound interest needs time & earning rates & taxx efficiency to achieve your goals.
We believe that we can generate significant financial certainty for you throughout our relationship & importantly add substantial value to ensuring you achieve all that is important & valuable to you as you have articulated to us.
If we were to sit down in three years time & looked back what do we need to do today so that you are financially & personally better off & happier.
As others do call us on 07 3848 1088
07 3848 1088 or This email address is being protected from spambots. You need JavaScript enabled to view it.or visit our new websiteJohn McAuliffe
