Financial Care Services Newsletter
Volume 11 Edition 9 – 30 September 2021
Financial Care Services, the specialist adviser to seniors in transition to new lifestyles
Indexation adjustment at Centrelink
Consumer price inflation has been low over the past year. Thus the September 2021 indexation adjustment to Centrelink Pensions is an increase of 1.6% as from 20 September 2021. The Basic Fee for residential aged care has been increased at a similar rate.
An increase of 1.3% has been applied to the Pension Supplement.
The Clean Energy Supplements have not been adjusted but remain fixed in dollar terms.
Single person Age Pension rates effective 20 September 2021
The Single person full rate of Age Pension increased to $882.20 per fortnight.
The total Single person rate of Pension Supplements including the Clean Energy Supplement, increased to $85.30 per fortnight.
Thus the maximum payment to a full rate Single person Age Pensioner is now $967.50 per fortnight.
But if your other income exceeds $180 per fortnight, then the Income Test would reduce your Single rate of Age Pension.
The Income Test would exclude you from any Age Pension if your other income exceeded $1,942.40 per fortnight, $50,500 per year.
The Asset Test would exclude a Single homeowner from any Age Pension if her other assets exceeded $564,200. A Single non-homeowner would not be excluded from the Age Pension, by the Asset Test until her assessable assets exceeded $780,700.
Remember you cannot be a ‘single’ person at Centrelink if you live with a ‘domestic partner’.
Partnered Age Pension rates effective 20 September 2021
The full rate of Age Pension for a member of a couple living together increased to $665.00 per fortnight together with Pension Supplements of $64.30 per fortnight.
Thus the maximum payment to an Age Pensioner member of a couple has increased to $729.30 per fortnight.
The Income Test reduces the payment rate for a partnered Age Pensioner once their total combined income exceeds $320 per fortnight.
No Age Pension is payable to a partnered Age Pensioner if the total combined income of the couple exceeds $2,976.00 per fortnight $77,300 per year.
Remember, Centrelink count all of the income and assets of the couple even if one of the partners does not satisfy the age or residency requirements for an Age Pension.
The Asset Test excludes from the Age Pension seniors living with a partner once their total combined assets exceed $847,600 in addition to their home or $1,064,100 if they are non-homeowners.
Remember you are responsible for updating Centrelink whenever your income or asset position changes significantly.
Centrelink are required to retrieve overpayments of Pensions.
Therefore prompt notification of changes in your financial position plus full details of any property sales, helps keep your payment rates correct.
Help to understand how your situation fits in the Age Pension system.
The calculation of your Age Pension amount, if any, can be challenging.
The easy route is to ask for the Age Pension Illustration Personal Data form as a checklist of essential data and then arrange for a ‘$99 Special Age Pension Illustration Short Consultation’ with Christine Hopper of Financial Care Services.
Christine Hopper of Financial Care Services offers Short Consultations for ‘personal factual financial information’ in the form of an Illustration of the amount of Centrelink Age Pension you could receive today provided that you satisfied the age and residency conditions for a Centrelink Age Pension.
Contact Christine at Financial Care Services to obtain the Age Pension Illustration Personal Data form.
You will also receive our Client Services Guide that provides essential information about Christine Hopper of Financial Care Services.
Alternatively you could search through the Centrelink website for clues about Pension rates and means tests then do the sums yourself.
If the Income and/or Assets Tests would exclude you from the Age Pension, Christine could help you check whether you would qualify for the Commonwealth Seniors Health Card.
But holders of the Commonwealth Seniors Health Card do not qualify for the full range of concessions that come with the Pensioner Concession Card.
Increased Commonwealth Seniors Health Card cut-offs
Seniors who are excluded from the Age Pension might be eligible for the Commonwealth Seniors Health Card, CSHC.
Seniors with a CSHC can access PBS prescription medications at the ‘concession’ prices that Pensioners pay.
The CSHC has an income test only. There is no ‘asset test’ for the CSHC.
Centrelink check your ‘adjusted taxable income’, that is, the income on your Income Tax Return including taxable capital gains, plus some other items. The ‘adjustments’ add back many items that are not taxed directly as ‘income’. Your ‘salary sacrifice’ superannuation contributions, employment related ‘fringe benefits’, superannuation pensions and lots of other items count in the ‘adjusted taxable income’.
To be eligible for the CSHC from September 2021, a single senior must have an adjusted taxable income of no more than $57,761 per year.
From September 2021, the cut-off for CSHC is $92,416 per year for a member of a couple who are living together. Centrelink use the total combined ‘adjusted taxable income’ of the couple to check if you qualify for the CSHC.
A higher CSHC cut-off level of $115,522 applies from September 2021, to the ‘adjusted taxable income’ of couples where at least one member lives in residential aged care.
New CSHC cards are mailed out each September for all ongoing CSHC holders.
But beware Centrelink can write to you cancelling your CSHC if you are deemed to be over the income limit. For example, your adjusted taxable income would be reviewed when you lodge an Income Tax return.
If a one-off capital gain puts you over the limit for keeping your CSHC, you might be eligible to reapply based on your projected adjusted taxable income for the next financial year.
Help with Commonwealth Seniors Health Card forms is available from Christine at Financial Care Services. Christine has neat handwriting for inserting your data into the little boxes on Centrelink forms.
Residential Aged Care Fee adjustments
The Basic Daily Fee for Commonwealth regulated residential aged care is set as 85% of the single rate of Age Pension.
Thus on 20 September 2021, the Basic Daily Fee increased by 1.6% to $53.56 and the Maximum Accommodation Supplement moved up to $59.49 per day.
In cash terms, all aged care residents will pay slightly more for the ‘housekeeping’ component of their aged care costs with effect from 20 September 2021.
In addition, a senior who entered permanent residential care as a Supported resident could be asked to pay a little more for accommodation if she now has significant assets or income.
The Means Tested Care Fees for permanent residents will be reviewed to take account of the small changes in the threshold amounts.
In practice, your daily Means Tested Care Fee could be reduced by a tiny amount if your asset and income position has not changed recently.
The Annual Cap and Lifetime Cap on care fees increased to reflect the indexation increase in Pensions and threshold levels in the means tested care fee calculation.
Christine at Financial Care Services your independent adviser
Financial Care Services is an independent advisory service specialising in retirees of modest means and aged care entrants.
Our core values include working with clients in claiming DVA and Centrelink entitlements.
The team at Financial Care Services are here to answer your Age Pension questions and guide your understanding of aged care costs.
Help with Centrelink challenges is available from Christine Hopper at Financial Care Services, the specialist adviser to seniors in transition to new lifestyles.
Christine has neat handwriting just right for inserting your data into small printed spaces. She helps clients complete Centrelink forms.
Christine could help you with collating your supporting documents and then mailing your form to Centrelink.
Assistance with completing Age Pension Claims and the Commonwealth aged care means testing forms is available to clients of Financial Care Services.
Christine charges fees based on the work involved in advising you about pensions and aged care fee solutions.
To make an appointment for confidential, independent and professional advice about aged care, retirement lifestyle costs, granny flat or Age Pension issues please contact Christine Hopper or call +61 3 9808 0338.
______________________________
Christine Hopper
Financial Care Services Pty Ltd
Independent aged care, strategic lifestyle and Social Security advice for seniors in Melbourne, Victoria, Australia
Telephone – call +61 3 9808 0338
Email – contact info@financialcareservices.com.au
Address – mail to 172 Warrigal Road, Camberwell Victoria 3124
Website – visit financialcareservices.com.au
LinkedIn – connect https://www.linkedin.com/in/christinehopper1
LinkedIn Company – follow https://www.linkedin.com/company/financial-care-services/
Past newsletters – see http://financialcareservices.com.au/newsletters/
Newsletter – subscribe http://eepurl.com/js41T
Disclaimer: The information contained in this newsletter is of a general nature only and does not constitute “financial advice”.
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.
© 2021 Financial Care Services Pty Ltd. All rights reserved