Financial Care Services Newsletter

by Christine Hopper
Volume 13 Edition 7 – 31 July 2023

Christine at Financial Care Services, the specialist adviser to seniors in transition to new lifestyles

Age Pension means tests

Is your objective to retire and live off the Age Pension after working and paying taxes for forty plus years?
As a long term Australian citizen who has attained age 67 years you could apply for an Age Pension.

But how much, if any, Age Pension you could actually be paid depends on your circumstances.

Firstly the payment rate for a member of a couple is lower than the rate for a single person.
Secondly the Asset and Income Tests can cut down your payment rate or totally exclude you from any Age Pension.

The maximum Age Pension payment rates in July 2023 are $802.00 per fortnight for a senior who lives with a partner or $1,064.00 per fortnight for a single person.

You could be paid at the single rate of Age Pension if you and/or your partner are living in aged care facility.
The single rate of Age Pension also applies to a senior whose partner is in prison.

July 2023 Indexation increases in Income Test and Asset Test Allowances

The means test Allowances increased marginally for July 2023.
Here is a summary of the new July 2023 cut off levels.

Age Pensions for single non-partnered seniors

A single person can only be paid the full rate of Age Pension if she has an income of not more than $204 per fortnight and assets of not more than $543,750 or a home plus not more than $301,750 of other assets.

A single person would be excluded from any Age Pension if she has an income over $2,145.00 per fortnight, $55,770 per year, and/or assets of more than $867,250 or a home and more than $625,250 of other assets.

Remember the Income Test reduces your Age Pension by fifty cents for each additional dollar of income over the Income Test Allowance of $204 per fortnight for a single person.

The Asset Test reduces the Age Pension by three dollars per fortnight for every one thousand dollars worth of assets over the Asset Test Allowance for a single person.

Remember, a ‘couple at Centrelink’ is any two adults who share domestic arrangements and present socially as a couple.
You cannot be treated as a single person at Centrelink just because you and your domestic partner keep your finances separate.

Age Pensions at the partnered rate for senior members of couples

A member of a couple can only be paid the full rate of Age Pension if the total joint income of the couple is not more than $360 per fortnight and their combined assets total not more than $693,500 or a home plus not more than $451,500 of other assets.

A partnered person would be excluded from any Age Pension if the total, combined income of the couple is over $3,285.20 per fortnight, $85,415 per year, and/or their combined assets total more than $1,181,000 or a home and more than $939,000 of other assets.

Remember the Income Test reduces the total combined Age Pension of a couple by fifty cents for each additional dollar of their total combined income over the Income Test Allowance of $360 per fortnight.

That is, a reduction of twenty five cents per fortnight per person is applied to the partnered rate of Age Pension for each one dollar of income of the couple over the Income Test Allowance of $360 per fortnight of the couple.

The Asset Test reduces the total combined Age Pension of a couple by three dollars per fortnight for every one thousand dollars of their total combined assets over the Asset Test Allowance for a couple.

The Asset Test is applied as a reduction in the partnered rate of Age Pension by $1.50, one dollar fifty cents, off each person’s partnered rate of Age Pension for each one thousand dollars that their total combined assets exceed the couple’s Asset Test Allowance.

Deemed income from financial assets

The Age Pension Income Tests use your deemed financial income rather than your actual income from ‘financial assets’.
Your ‘financial assets’ include your bank accounts, superannuation accounts and your other financial investments.

Remember, your loans to family or friends together with any ‘excess gift’ amounts are counted in your ‘financial assets’.
Your partner’s ‘accumulation’ superannuation accounts could be excluded if your partner is under age 67 years and has not converted the account into an allocated pension or income stream.

The amount of deemed income from substantial amounts of ‘financial assets’ has been reduced slightly by the recent increase in the asset levels for the changeover to the higher deeming rate.

Deemed financial income for a single Age Pensioner

As from July 2023, the annual rate of deemed financial income for a single person is calculated as 0.25% of the first $60,400 of financial assets plus 2.25% of any additional financial assets.

Thus for, a single person with no more than $60,400 of financial assets, the deemed financial income is 0.25% of her financial assets.
For a single person with over $60,400 of financial assets, the deemed financial income is 0.25% of the first $60,400 plus 2.25% of her financial assets in excess of $60,400.

Deemed financial income for an Age Pensioner couple

For a couple at Centrelink, the annual rate of deemed financial income is calculated as 0.25% of the first $100,200 of their financial assets plus 2.25% of any additional financial assets of the couple.

Read more about deemed financial income including a sample calculation.

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 Christine at Financial Care Services 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.

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.

Alas holders of the Commonwealth Seniors Health Card do not qualify for the full range of concessions that come with the Pensioner Concession Card.

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 her 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.

But wait there is more for seniors who are entitled to at least one dollar per fortnight of Age Pension.

The Pension Supplement and the Clean Energy Supplement are only payable to seniors who qualify for at least one dollar per fortnight of Age Pension.
These Age Pensioners are also issued with Pensioner Concession Cards.

The Pensioner Concession Card then allows you ‘concession’ rates on your utility bills, municipal Council rates, motor vehicle registration, public transport fares and PBS prescription medicines.

Pension Concession Card holders are normally bulk billed at public hospital clinics and some general medical practices.
Also many businesses offer ‘pensioner discounts’ particularly for services on the slower trading days.

The 2023 Commonwealth Budget announced additional help with energy costs for many Centrelink customers.
These one-off help payments might be automatically applied to your electricity bill if your Centrelink CRN is already registered with your energy provider.

Holders of the Commonwealth Seniors Health Card might need to wait until their energy provider is ready to ask them about their potential eligibility for the new ‘energy bill relief’ rebates.

These energy rebates are administered by the States.
Each State could have its own method for distributing the energy rebates.

Aged care means tested fee formula update

The increase in the Income Test Allowance for the Age Pension has flowed through to the formula for the Income component of the Means Tested Amount for Commonwealth subsidised aged care.

This gives a small increase in the Income Allowances before you start being assessed for an Income Component of your Means Tested amount.

The increase in the asset level for the changeover from the lower to the higher deemed rate in the calculation of your deemed income from financial assets could generate a lower deemed income.

Hence, the Income Component of your Means Tested fee for aged care could be reduced marginally.

The increase in the Income Test Allowances and the changeover levels for the deemed income from financial assets could each reduce your Income Component by a small amount.

Centrelink will review your Means Tested fee for aged care to take account of the increased Allowances.

Help to understand the costs of residential aged care for your family

Christine at Financial Care Services helps clients to understand the costs of placing a family member into residential aged care.

Christine could illustrate the various accommodation costs and means tested care fees that could be levied for your preferred aged care place.
You could ask Christine to illustrate some different Accommodation Room Prices so that you do not sign up for a place that would unduly stretch your family finances.

Contact Christine Hopper or call +61 3 9808 0338 to arrange an aged care consultation.

Christine at Financial Care Services your independent adviser

Christine at Financial Care Services is an independent adviser specialising in retirees of modest means and aged care entrants.
Our core values include working with clients in claiming DVA and Centrelink entitlements.

Christine at Financial Care Services is here to answer your Health Card and 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, Low Income Health Card and Commonwealth Seniors Health Card Claims and the Commonwealth aged care means testing forms is available to clients of Christine at Financial Care Services.

Christine charges fees based on the work involved in advising you about health cards, 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.
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Christine Hopper
Financial Care Services
Independent aged care, strategic lifestyle and Social Security advice for seniors in Melbourne, Victoria, Australia
Telephone – call +61 3 9808 0338
Email – contact Christine@financialcareservices.com.au
Address – mail to 2B Thomas Street, Camberwell Victoria 3124
Website – visit financialcareservices.com.au
LinkedIn – connect https://www.linkedin.com/in/christinehopper1
Past newsletters – see http://financialcareservices.com.au/newsletters/
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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.