Financial Care Services Newsletter
by Christine Hopper
Volume 14 Edition 3 – 27 March 2024
Christine at Financial Care Services, the specialist adviser to seniors in transition to new lifestyles
Pension Indexation Increases 20 March 2024
Centrelink and DVA Pension rates increased by 1.8% on 20 March 2024.
The amount of the ‘indexation’ increase is small reflecting our lower half year inflation rate.
New maximum Age Pension payment rates
After the March 2024 indexation is applied, a single pensioner could receive a maximum fortnightly payment of $1,116.30.
This payment includes $1,020.60 of basic pension and $95.70 of Supplements.
Each member of a pensioner couple could receive a maximum fortnightly payment of $841.40.
This payment includes $769.30 of basic pension and $72.10 of Supplements.
But your payment is reduced by the Age Pension Means Tests
The actual amount that an individual pensioner is paid is subject to the pension Means Tests.
Centrelink work out the reduction that could be applied to you under the Assets Test and separately under the Income Test.
Then Centrelink apply whichever Test generates the lowest pension payment to you.
Means Test cut offs for Single Age Pensioners
A Single Pensioner could keep her Pensioner Concession Card and receive the Pension Supplements plus one dollar per fortnight of DSP or Age Pension, if her assessable Income is not more than $2,243.20 per fortnight.
But she must also satisfy the Assets Test to remain as a Pensioner.
A Single pensioner may have not more than $883,616 of Assets or a ‘home’ plus $641,616 of other Assets, and still be eligible for one dollar per fortnight of Age Pension.
Means Test cut offs for Partnered Age Pensioners
The Means Tests for ‘couples’ count all of the Income and all of the Assets that the couple have.
Centrelink use the ‘total’ amounts for the couple; mine, yours, ours are all included without distinction.
Remember that at Centrelink and DVA, a couple is any two adults who share domestic arrangements and present socially as ‘a couple’.
You cannot be treated as a ‘single’ at Centrelink just because you and your domestic partner keep your finances separate.
Your partner’s income and assets cannot be ignored because your partner does not satisfy the residency, age and/or disability conditions for a Centrelink Pension.
Means Test cut offs for Pensioner couples living together
After the Pension increase on 20 March 2024, an Age Pensioner couple living together could have a joint Income of $3,433 per fortnight, and still be Pensioners.
An income over $89,300 per annum, has them cut-off by the Income Test from entitlement to that last one dollar per fortnight each of Service or Age Pension.
They would lose the Pension Supplement and the Pensioner Concession Card when their income exceeds $3,433 per fortnight.
But they must also satisfy the relevant Asset Test.
Remember Centrelink check your position against the Asset Test and the Income Test then apply whichever Test would generate the lower Pension payment or exclude you from the Pension.
A homeowner couple living together could have $963,700 of assets in addition to their home before the Asset Test excluded them from that last one dollar per fortnight each of Age Pension and the Pension Supplement.
A non-homeowner couple living together could have $1,205,700 of assets and get that last one dollar per fortnight each of Age Pension and the Pension Supplement provided that the Income Test had not excluded them from any Age Pension.
Pensions for couples separated by illness
When at least one member of a couple lives in residential aged care, they become a ‘couple separated by illness’ for Centrelink purposes.
The maximum fortnightly Pension payable to a member of a couple separated by illness increased to $1,116.30 from 20 March 2024.
This payment includes $1,020.60 of basic pension and $95.70 of Supplements.
The Pension payable to a member of a couple separated by illness is subject to reduction according to the means tests for couples.
After the Pension increase on 20 March 2024, an Age Pensioner couple separated by illness could have a joint Income of $4,438 per fortnight, and still be Pensioners.
But they must also satisfy the relevant Asset Test.
Remember Centrelink check your position against the Asset Test and the Income Test then apply whichever Test would generate the lower Pension payment or exclude you from the Pension.
A homeowner couple separated by illness could have $1,131,000 of assets in addition to their home before the Asset Test excluded them from that last one dollar per fortnight each of Age Pension and the Pension Supplement.
A non-homeowner couple separated by illness could have $1,373,000 of assets and get that last one dollar per fortnight each of Age Pension and the Pension Supplement provided that the Income Test had not excluded them from any Age Pension.
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 at Financial Care Services writes these Newsletters.
She can help you to understand your Age Pension situation.
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.
Contact Christine to help you navigate your Age Pension challenge.
Aged Care Fee adjustments reflecting the 20 March 2024 Age Pension increase
The Basic Daily fee for residential aged care is set at 85% of the Single rate of Pension excluding Supplements.
The March 2024 Age Pension increase is reflected in a small increase in the Basic Daily fee for residential aged care.
All aged care residents will be charged $61.96 per day for the Basic Daily Fee as from 20 March 2024.
This fee is the ‘housekeeping money’ for the food, laundry, cleaning entertainment and utility bills required for aged care homes.
Aged care residents who have significant resources also pay for their personal support and nursing care.
The care component cannot be more than the cost of the resident’s actual assessed level of care.
Centrelink will recalculate the Means Tested Care Fee for each aged care recipient based on the slightly increased changeover points.
Self-funded retirees might have a tiny reduction in their Means Tested Care fees as a result of the small indexation increase in the changeover points in the Asset and Income component calculation formulae.
The Annual Cap on Means Tested Care Fees has been increased slightly to $33,309.29, from 20 March 2024.
An aged care resident would need to have a Means Tested Fee of at least $91.26 per day for her care fees to be limited by the Annual Cap.
The Lifetime Cap on Means Tested Care Fees is now $79,942.44.
Help to navigate the aged care fees and charges for residential aged care
Christine at Financial Care Services can help you with the Centrelink aged care entry challenge.
Christine at Financial Care Services understands the DVA Pensions and Centrelink assessment of the means tested amount for aged care both home care and residential aged care.
A consultation with Christine at Financial Care Services helps you understand your potential aged care costs together with the Centrelink implications of rearranging your assets, leasing or selling the former home.
Christine can Illustrate the costs of placing your family member in your preferred aged care facility.
She can help you check if your family can afford that place or maybe ask for a lower Accommodation Room Price.
Christine could complete your Centrelink form ‘Permanent Residential Aged Care Request for a Combined Assets and Income Assessment SA457’ for you to sign.
She has neat handwriting just right for inserting your data into small printed spaces.
Christine could help you with collating your supporting documents and then mailing your form to Centrelink.
Assistance with completing the Commonwealth aged care means testing forms is available to clients of Christine at Financial Care Services.
Christine at Financial Care Services charges hourly rate fees for helping with Centrelink matters.
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.
© 2024 Christine Hopper @ Financial Care Services. All rights reserved.