October 31, 2016

Vol 6 Ed 10

Volume 6 Edition 10 Financial Care Services Newsletter

Online at Permalink: http://financialcareservices.com.au/newsletters/vol-6-ed-10/

Financial Care Services Newsletter by Christine Hopper
Independent aged care, lifestyle and financial advice for seniors

Volume 6 Edition 10 – 31 October 2016

The Pension Asset Test is changing for 2017

As announced long ago, the Asset Test for Centrelink and DVA means tested Pensions will change on 1 January 2017.
As a result of the Asset Test change, some retirees will have their Pension payments increased. Yes, the Allowance before the Asset Test starts to bite will be increased on 1 January 2017. The increase in the Asset Test Allowance means that a homeowner couple could have an additional $78,500 of assessable assets before the Asset Test bites.

Many wealthier seniors will have their Pension payment rates reduced. Some seniors will have their Pensions cancelled as a result of the new Asset Test.

Remember Centrelink will check your resources against the Asset Test and against the Income Test then apply the means Test that generates the lower Pension payment rate. The change in the Asset Test could result in your Pension rate being impacted by the Income Test in 2017 rather than the new Assets Test.

January 2017 Pension Asset Test changes to Asset Test Allowances

The Asset Test Allowance is the value of assessable assets that a pensioner could have before the Asset Test starts to reduce the Pension rate.
Your assessable assets include almost all that you own with a few exemptions.

For a Single homeowner Pensioner, the Asset Test Allowance increases from $209,000 to $250,000 excluding the value of her home. For a Single Pensioner who is not a homeowner, the Asset Test Allowance increases from $360,500 to $450,000.

Remember that at Centrelink, you cannot be assessed as a Single Pensioner if you have a domestic partner.

At Centrelink, a couple is any two adults who share domestic arrangements and present socially as a couple. Read more about Personal Circumstances at Centrelink.

The Asset Test Allowance for a homeowner couple increases from $296,500 to $375,000 excluding the value of their home. For a for a non-homeowner couple, the Asset Test Allowance increases from $448,000 to $575,000 on 1 January 2017.

January 2017 Pension Asset Test changes to taper rate

The January 2017 Pension Asset Test changes to the taper rate mean that your Pension would be reduced by three dollars per fortnight for every one thousand dollars of assessable asset value over the Asset Test Allowance.
In 2016, the Asset Test reduces your Pension entitlement by $1.50 per fortnight for each $1,000 of assessable assets over the Asset Test Allowance.

Asset levels to have your Age Pension Cancelled

A single homeowner could have $515,630 of assets in addition to her home and retain that last one dollar per fortnight of Age Pension in January 2017.
A single non-homeowner could retain her Age Pension of just one dollar per fortnight if her assets did not exceed $715,330.

A homeowner couple could have $775,330 of assets in addition to their home and retain that last one dollar per fortnight each of Age Pension in January 2017.
A non-homeowner couple could retain their Age Pensions of just one dollar per fortnight each if their assets did not exceed $906,330.
Thus your Age Pension could be cancelled on 1 January 2107 if your Assets exceed these levels.

Lifetime Health Cards if your Age Pension is cancelled by the Asset Test change

If your Pension is cancelled by the January 2017 Pension Asset Test changes then your Pensioner Concession Card will also be cancelled.

But if your Age Pension is cancelled because of the January 2017 Pension Asset Test changes, Centrelink intend to issue you with Low Income Health Care Card and a Commonwealth Seniors Health Card. These Health Cards will not be subject to the usual income tests if you get them because your Age Pension was cancelled by the January 2017 Pension Asset Test changes.

The non-income tested Low Income Health Care Card will be issued to DSP recipients who have their Pensions cancelled by the January 2017 Pension Asset Test changes. Low Income Health Cards attract bulk billing at most local doctors, Pensioner rates for PBS medicines and some utility discounts.

Why apply for a Pension before January 2017 Pension Asset Test changes

If you are in Australia and receiving just one dollar per fortnight of Age Pension at the end of 2016, then your eligibility for Commonwealth pharmaceutical concessions and Low Income concessions could continue.

If your Pension continues into 2107 than you would keep your Pensioner Concession Card. But if your Age Pension were cancelled by the 2017 Assets Test then you could get a non-income tested Low Income Health Care Card and a non-income tested Commonwealth Seniors Health Card. You would not be asked to prove your financial position in order to keep these cards.

The Commonwealth Seniors Health Card gives access to the Pensioner Concession rates for PBS items. The Low Income Health Care Card allows for discounts on many utility bills and public transport.
If your DSP was cancelled by the new Asset Test then you would be issued with a Low Income Health Care Card without the need to keep proving your income to Centrelink.

The Centrelink issued Health Cards offer valuable concessions on health costs.

Non income tested health cards will be issued to people whose Pensions were cancelled by the January 2017 Pension Asset Test changes. Remember that you must be in Australia to use or retain a Centrelink issued Health Card.

Eligibility for a Pension before the January 2017 Pension Asset Test changes

Your Pension could only be cancelled by the January 2017 Pension Asset Test changes if you had actually started receiving a Pension before January 2017.
To start receiving DSP or Age Pension, you must have resided in Australia for ten years as a permanent resident.

You must have attained age 65 years, the minimum Age Pension Age, to start an Age Pension in 2016.
For Disability Support Pension, you must be under your Age Pension Age and be assessed as permanently incapacitated for work on account of physical, medical or psychiatric disability. Read more about the Disability standard

The amount of Pension that you could be paid is determined according to your ‘personal circumstances’ and the asset and income means tests.

To be eligible for any Pension, a single person must have an income not exceeding $45,700 per year. For the remainder of 2016, the maximum assessed assets for just one dollar per fortnight of Pension is $891,000, or a home and not more than$740,000 of other assets.

Neither member of a couple at Centrelink could receive any Pension if their combined income exceeds $70,000 per year. The 2016 Assets Test limit for a member of a couple to receive any Pension is $1,248,000, or a home plus $1,097,000 of assessable assets.

Read more about the September 2016 increased Pension rates and asset cut off levels

Please be aware that the Pension you receive is the lower amount after checking against the Income Test and the Assets Test.

Personal Help with DSP and Age Pension Asset and Income Test assessments.

Help is available. Christine at Financial Care Services is experienced with Centrelink Pension Applications and the many Centrelink financial means tests.
Financial Care Services offers Short Consultations for ‘personal financial factual information’ to help you check your financial position against the means test for a Disability Support Pension or Age Pension.

If you think that you might be eligible for a part Pension in 2016 you can call Christine on 03 9808 0338 to arrange a Short Consultation, 45 minutes in person or by telephone and/or email to discuss your potential for a Pension in 2016. The fee for a Short Consultation for ‘personal financial factual information’ is $99. Please ask for a special ‘short personal financial factual information consultation’ when you book your appointment.

Clients who are unable to attend the Financial Care Services office in Camberwell are welcome to Contact us via email to arrange for a Short personal financial factual information Consultation.

You can start the Short ‘personal financial factual information’ Consultation by emailing for the Financial Care Services Financial Services Guide and the Financial Care Services Age Pension Data form.

About  Financial Care Services

Christine at Financial Care Services understands the Centrelink system for assessing means tested aged care fees and Pensions.  Christine at Financial Care Services works with families to clarify the costs for their family member to enter residential aged care.

Financial Care Services is an independent financial advisory service specialising in retirees of modest means and aged care entrants. Our core values of working with clients in their lifetime financial planning supports claiming DVA and Centrelink entitlements.

Financial Care Services charges fees based on the work involved in advising you about pensions and aged care financial solutions and arranging your investments.

To make an appointment for confidential, independent and professional advice about aged care, retirement lifestyle or financial issues please contact Christine Hopper  or call +61 3 9808 0338.

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Financial Care Services

Christine Hopper
Financial Care Services Pty Ltd
Independent aged care, lifestyle and financial advice for seniors in Melbourne, Victoria, Australia
Australian Financial Services Licence Number
299570 (check this at www.search.asic.gov.au/fsr/flb.html)
Authorised Representative Number
252529 (check this at www.search.asic.gov.au/fsr/far.html)

Telephone – call +61 3 9808 0338
Email – contact info@financialcareservices.com.au
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Disclaimer: The information contained in this newsletter is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations.

All eligibility for Commonwealth benefits will be determined by Centrelink or DVA, based on your personal position as documented and the legislation and Regulations in force at that time.

© 2016 Financial Care Services Pty Ltd. All rights reserved.