My Age Pension in Samford, Queensland | Consultation agency

My Age Pension

Locality: Samford, Queensland

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25.01.2022 Looking for inspiration! What would you like my next article to be about? Or I am happy to do a Frequently Asked Questions page if you have some questions you want answered!

24.01.2022 It is hard to understand why it has taken so long for the Government to take action even if it is only a band aid solution. Clearly all hopes are pinned on the Welfare Payment Transformation Infrastructure Program reducing the need for real people contact. I would not hold my breath!

23.01.2022 Assessing Adjacent Land to the Principal Home Contrary to popular understanding of the term ‘Adjacent Land’, under social security law ‘Adjacent Land’ is defined as the land surrounding the principal home that is held under the same title. Under the ‘Private Land Use Test’ only the principle home and adjacent land up to 2 hectares (4.94211 acres) used primarily for private or domestic purposes can be exempted for assets test purposes. Adjacent land in excess of 2 hectares an...d land used for commercial purposes is otherwise assessed. From 1 January 2007, however, the ‘Extended Land Use Test’ was brought in exclusively for age pensioners (and some carers). The extended land use test means that age pensioners who have lived in their principal home for 20 years or more continuously, will not be assessed on adjacent land, regardless of the size, provided they make ‘Effective Use’ of the land. Effective use of the land is a broad brush with many complexities but generally is satisfied where the land is being used to its potential to generate income or where the land is not being used because it has no, or limited potential to generate income. If it is the age pensioner that is working the land to generate income, any income generated is then assessed against the income test. It is worth noting that the guidelines take into consideration the capacity of the pensioner when assessing effective use. Interestingly however, when a family member is working the land to its potential, and the income generated is used to support that family rather then passed on to the pensioner, than the income generated from the land is not assessed against the income test of the pensioner. This is just a snapshot of the information available on this subject and you should not make any decisions based on this article without seeking further advice about your individual circumstances. If you found this article useful, please share.

23.01.2022 The more media coverage the better even if it is only half the story

22.01.2022 Granny Flat Interests A granny flat interest is a type of special residence recognised under the Social Security Act. A life interest or right to accommodation for life is a granny flat interest if:...Continue reading

20.01.2022 Funeral expenses, funeral investments and burial plots It is inevitable that we are going to die and when we do there are expenses involved. This article looks at those expenses, which if you pay in advance, will reduce your assessable assets under the assets test and potentially increase your age pension benefit. If you pre-pay yours or your partner’s funeral, the payment that you have made becomes an exempt asset but only if you have entered into a contract and nothing furt...her needs to be done for funeral services to be provided in accordance with that contract. The contract must not entitle you to a refund of the payment unless you move away from the funeral service provider’s area. While there is no limit to the amount that you can put towards a prepaid funeral, common sense dictates that you should always check that it is fair value. A funeral investment (also known as a funeral bond or funeral fund) is exempt if it matures on the death of the pensioner or their partner, is not for a funeral for which funeral expenses have been pre-paid, is not able to be redeemed and is not more than the exempt funeral investment threshold. The threshold changes on 1 July each year by CPI and is currently at $12,750. It is the amount invested and not the total value of the investment that is assessed allowing for earnings on the investment to build the balance above the threshold. Each member of a couple is able to utilise this threshold although if a joint investment is made, the threshold is applied to that joint investment. A burial plot acquired by a pensioner for him/herself or their partner is an exempt asset. Each member of a couple can have the value of the plot exempted. Alternatively a family mausoleum, crypt or burial vault are also exempt assets. It is worth noting that while the exempt status of these products/services maybe enticing, you do need to consider the appropriateness of them for you. Therefore we recommend that you do not make any decisions based on this article without seeking further advice about your individual circumstances. If you found this article useful, please share. If you have any questions about this article please comment. And don't forget to like and follow our Facebook page and check out our Website at www.myagepension.com.au.

20.01.2022 Treatment of Superannuation and Pension Accounts This article looks at how Centrelink treat superannuation accounts and pension accounts under the assets test and the incomes test. As explained in previous articles, the combined value of a couples assets and income is used to determine eligibility for the age pension. This is the case regardless of whether both members of the couple are age eligible or just one member of the couple is age eligible.... This is important to understand because superannuation is only assessed as an asset once you have reached your Age Pension eligibility age. This means that if you are age eligible for the Age Pension the value of your superannuation is included in the value of your combined assets for assets test purposes. However, if you partner is not age eligible for the Age Pension, your partner’s superannuation is not included in the value of your combined assets. This is not the case however where a superannuation account has being converted to a pension account regardless of the age of the holder of that account meaning that all pension accounts are included in the value of your combined assets. Where a superannuation account or pension account (commenced on or after 1 January 2015) is assessed for age pension purposes, the account balance is deemed to earn an income regardless of what it is actually earning. If your pension account commenced before 1 January 2015, your pension account will have a deductible amount that was calculated at the time of commencement of the pension. This amount, which is called the deductible amount, is calculated by dividing the purchase price (or starting balance) of the pension by the life expectancy of the pensioner or the reversionary pensioner if one was nominated. The amount of pension paid less the deductible amount is the amount that is treated as income for incomes test purposes. These varying treatments of superannuation accounts and pension accounts means that couples with the exact same superannuation assets and pension assets could be assessed quite differently. It also means that in some cases moving assets into superannuation could enhance couples Age Pension benefits. Recommencing a pension, thereby resetting the start date, has the potential to improve pension benefits but also has the potential to be detrimental to pension benefits dependent on the underlying numbers. For these reasons and because there can be much wider implications of making changes to your financial situation, we recommend strongly that you do not make any changes to your situation without first seeking financial advice from a qualified financial adviser. If you found this article useful, please share. If you have a particular subject you would like me to cover please comment or contact me directly at [email protected].

19.01.2022 Thoughts? http://www.abc.net.au//berg-chifleys-political-tim/5480154

18.01.2022 More on the Pension Loan Scheme

14.01.2022 Pension Loans Scheme Currently 1.8 million Australian homeowners receive some level of age pension, with around 700,000 on a part pension. What many of these part-age pensioners may not know is that, along with recipients of the disability support pension, carer payment and some other Centrelink payments, they are able to access some of the equity in their home through the Pension Loan Scheme....Continue reading

12.01.2022 How much is the age pension. The pension benefit is dependant on if you are single or a member of a couple. It also is dependant on the total value of your assessable assets and assessable income. The maximum pension benefit for a single age pensioner is $894.40 fortnight and for a member of a couple it is $674.20 a fortnight each.... You are only able to access the maximum age pension benefit, however, if the application of the two means tests does not result in a reduction to your pension benefit. The two test I am referring to are, of course, the asset test and the income test. Both tests are applied to your situation. The test that gives you the least pension benefit is the test that is used to calculate your individual pension benefit. This process happens each fortnight so that one fortnight your pension benefit might be determined by the asset test and the next fortnight the income test. In reality, most of the time the same test will be used each fortnight unless there has being a substantial change to your situation. It is important to understand that for the purposes of these two tests, not all assets are assessable assets and not all income is assessable income. The most obvious example is that your principle home is not an assessable asset. Less obvious is that superannuation assets in accumulation mode of your non age pension age spouse is not an asset. These are only two of many examples. Determining what your income is for income test purposes is not easy either. Income from your financial assets is deemed to earn somewhere between 2% and 5% depending on if you are single or a member of a couple and the value of the financial asset. How income from an allocated or account based pension is treated is different dependant on the start date of that pension and when you first started to receive an age pension benefit. Again these are only two examples of the many complexities associated with the income test. If you would like to know what your age pension benefit might be you can contact me at [email protected] or phone 0419787847.

09.01.2022 Assessing the Principal Home It seems most people are aware that an age pension recipient’s principal home is exempt for asset test purposes. But when is a principal home not a principal home? Centrelink say an age pension recipient's principal home is the home that the age pension recipient lives in for the greatest amount of time each year and includes an area of adjacent land up to two hectares on the same title document. If the principal home has adjacent land in excess o...f two hectares, please refer to my previous article on Adjacent Land which can be found on my website at www.myagepension.com.au. If an age pension recipient owns more than one home then the principal home is the one in which they spend the greatest amount of time unless they spend the same amount of time in each of them in which case the most expensive home is the home that is exempt. If an age pension recipient spends more time in a home that they do not own (for example holiday accommodation or a relatives home) then the home that they do own remains their principal home. If the home is a dual occupancy home built on land on the same title document as the age pension recipient's home, factors such as who paid the construction or purchase costs are taken into consideration. If the age pension recipient paid the construction or purchase costs and the dual occupancy is vacant or rented to a near relative, the dual occupancy is part of the principal home. If it is rented to a person other than a near relative it is not part of the age pension recipients principal home. If another person paid the construction or purchase costs and this person has an interest in the second dwelling, then the age pension recipient does not have an interest in the dwelling and it is not an asset of the recipient. If the principal home includes a self-contained living area (but does not come under the definition of dual occupancy) this area may not be defined as part of the principal home. If the self-contained living area is vacant or it is rented to a near relative it is still assessed as part of the principal home. But if the self-contained living is rented to a person other than a near relative, the area is not considered part of the principal home and therefore is assessable for assets test purposes. Where an age pension recipient operates a business from their home, and there are distinct areas of the property used for business purposes, these areas are not part of the principal home and are not exempt. This is just a snapshot of the information available on this subject and you should not make any decisions based on this article without seeking further advice about your individual circumstances. If you found this article useful, please share.

08.01.2022 Exempt Assets Below is a list of exempt assets taken directly from the Department of Human Services website. Not as useful as you would think because there are so many exceptions to the rule. Exempt assets include:... your principal home and surrounding land up to 2 hectares on the same title some properties larger than 2 hectares on the same title - read more about rural customers and primary producers your principal home, if you vacate it for up to 12 months granny flat rights where you pay more than the extra allowable amount principal home sale proceeds you’ll use to buy another home within 12 months - we deem the exempted amount and include it in the income test any property or money left to you in an estate, which you can’t get for up to 12 months accommodation bonds paid on entry to a residential aged care facility some income streams depending on when you purchased them Australian superannuation investments from which a pension is not being paid - this exemption is valid until you reach age pension age a cemetery plot and a prepaid funeral, or up to 2 funeral bonds, that cost no more than the allowable limit aids for people with disability money from the National Disability Insurance Scheme for people with disability a Special Disability Trust, if it meets certain requirements If you enter an aged care facility, we don't assess your former principal home if you're: paying or are liable for an accommodation charge, renting out your former home, and entered an aged care facility before 1 January 2017 We will not assess any interest you have in the following items as long as you or your partner didn’t create them: life interest reversionary interest remainder interest, or contingent interest We also may not assess most compensation or insurance payments for loss or damage to buildings or personal items. In previous articles I have discussed in detail the exemption status of the principle home and the exceptions to this exemption. I have also discussed pre-paid funerals and burial plots. This article is an invitation to my readers to determine what I focus on next. Do you want to understand more about how superannuation is assessed or would you like to understand more about granny flat rights. If you found this article useful, please share. If you have a particular subject you would like me to cover please comment or contact me directly at [email protected]. Please be aware that this is just a snapshot of the information available on this subject and you should not make any decisions based on this article without seeking further advice about your individual circumstances.

07.01.2022 Former Principal Home and Aged Care Generally the principal home and up to 2 hectares of privately used surrounding land on the same title is exempt. My previous articles discussed how this exemption is applied and the exceptions to this rule. If you want more detail on the principle home exemption than you will find my articles on ‘Principle Home’ and ‘Adjacent Land’ of interest. These can be accessed through my website at www.myagepension.com.au. This article looks at how ...Continue reading

06.01.2022 Treatment of Private Trusts We have had a number of clients recently who have found out just how problematic it can get when involved in a private trust while on or seeking to access the Age Pension benefit. When assessing private trusts Centrelink seek to determine who controls the trust. If they determine that an individual (or couple) controls the trust, then the assets and income of the trust will be attributed to that individual (or couple).... To keep it simple it is suffice to say that if you are involved in a family trust then it is possible that you could be determined to be the controller of that trust. The control test is used to determine the level of control an individual has over the trust. Centrelink takes being an appointor or trustee of a trust as being a strong indicator of control although other factors relating to control have to be considered. Factors that are considered include: If there is no appointor; If there is more than one appointor; If the appointor is a professional; If there are multiple trustees; If a trustee might reasonably be expected to act in accordance with the directions of another individual. The source test recognises that a person who transfers assets to a trust for no consideration will generally have some control over that trust. Then on top of all of this is the associate rule. Control of a trust maybe established by looking at the level of informal control an individual holds through their associates. An associate is a person or entity that could be expected to act in accordance with an individual’s wishes. This could include relatives, business partners, a trustee and any entities influenced by these individuals. The point is, that Centrelink Guidelines specifically states that it is permissible for the assessing officer to look beyond the presumptions raised under the law of trusts. What this means is that you need to be careful when it comes to trusts. Don’t just assume that because you are not receiving any income from that trust that there will be no impact on your age pension benefit. At the same time, don’t just assume that because you are not the appointor or the trustee of the trust that you will not be deemed the controller of the trust. In summary, be careful and seek advice. If you would like more information on this article or any matter relating to your age pension benefits, please contact us. If you found this article useful, please share and don't forget to like and follow our Facebook page and check out our Website at www.myagepension.com.au.

03.01.2022 Assessable Assets Like the list of exempt assets, the list of assessable assets may not be as useful as you might hope. It is not that the list is unclear but knowing what value to declare can be confusing. The following list is directly from the Guide to Social Security Law:...Continue reading

03.01.2022 Gifting and other Deprivation Strategies Regardless of whether you are choosing to give away assets and/or income for altruistic reasons or for reasons relating to how you are means tested, it is important to understand the rules around disposal of assets. If you dispose of an asset for less than ‘adequate financial consideration’ the deprivation rules are applied. Of course, these rules do not mean that you cannot give away your assets and/or your income. What it does mean ...is that if you do so and you exceed the allowable amount, then you will be assessed on the value you gave away. The allowable amount is $10,000 per financial year with a limit of $30,000 in any five-year period. These limits apply to both singles and couples. There is no allowable amount for income. Once you exceed the allowable amount for assets, the value of the assets given away or sold for less than their worth in excess of the allowable amount is assessed for assets test purposes for 5 years from the date of disposal. If the asset is a financial asset, then deeming is applied to the value of the asset over this period. It is worth noting that if you are not yet eligible for the pension but will be in the future, these rules only apply to disposals made in the 5 years before you are assessed for the age pension benefit. Once again, the rules are complex and broad and I am unable to cover all of them in this article. However, I thought the following might be of particular interest. Where a person waives their right to an interest in an deceased estate or superannuation fund or directs the executor of the will or the trustee of a superannuation to distribute their interest to a third party and adequate financial consideration is not received, than this is considered deprivation. There are some substantial concessions where a farm is transferred to a near relative. These concessions are designed to assist Australian farmers to retire and hand ongoing control of the farm to the next generation. The concession is that past contributions made by the near relative can be taken into consideration when calculating the deprivation amount. These past contributions can include forgone wages, contributions to improve the farm, purchase of livestock and equipment and unpaid care of the person. This is just a snapshot of the information available on this subject and you should not make any decisions based on this article without seeking further advice about your individual circumstances. If you found this article useful, please share. If you have any questions about this article please comment. And don't forget to like and follow our Facebook page and for more information about what we do, go to our website at myagepension.com.au.

01.01.2022 The Work Bonus - Assessment Free Employment Income The ‘Work Bonus’ was introduced on 20 September 2009 and changed to its current format on 1 July 2011. The current work bonus allows an age pensioner to earn employment income of up to $250 per fortnight without impacting on their age pension benefit. If an age pensioner does not earn $250 in any individual fortnight then the difference between what they earn and the $250 is added to an ‘Employment Income Concession Bank’ (I...ncome Bank). This difference is called the ‘Unused Concession Balance’. The income bank grows by the unused concession balance each fortnight until it reaches $6,500 at which point it is capped. This means that if an age pensioner does not have any employment income for a 12-month period their income bank will reach $6,500 but will never exceed this amount. Should the age pensioner earn more than $250 in a fortnight the excess amount reduces the balance in the income bank and is not assessed. However, the income bank cannot go negative and any employment income in excess of the income bank balance is treated as assessable for the income test and may result in a reduction of the pension benefit. This means that it is possible for an age pensioner to earn $6,500 one week a year and not be assessed on that income. Employment income is income from remunerative work undertaken by a person as an employee in an employer/employee relationship. Income from self-employment is not included even where there is an intervening business structure because the employer/employee relationship is not there. Income from independent contracting may or may not be considered employment income dependent upon the circumstances. The income bank starts accruing on the day the age pensioner starts receiving their pension. You do not need to do anything to trigger the income bank. The work bonus applies individually so that each member of a couple has their own income bank. This means that a pensioner couple can earn an additional $500 combined a fortnight ($13,000 a year) without impacting on their age pension benefit. This is just a snapshot of the information available on this subject and you should not make any decisions based on this article without seeking further advice about your individual circumstances. If you found this article useful, please share. If you have any questions about this article please comment.