Volume 10 Edition 6 Financial Care Services Newsletter

Volume 10 Edition 6 – 30 June 2020

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 66 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 Test can cut down your payment rate or totally exclude you from any Age Pension.

July 2020 Indexation increases in Income Test and Asset Test Allowances

The means test Allowances increased marginally for July 2020. Here is a summary of the new July 2020 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 $178 per fortnight and assets of not more than $482,500 or a home plus not more than $268,000 of other assets.

A single person would be excluded from any Age Pension if she has an income over $1,897.20 per fortnight, $49,327 per year, and/or assets of more than $769,000 or a home and more than $554,500 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 $178 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 $316 per fortnight and their combined assets total not more than $616,000 or a home plus not more than $401,500 of other assets.

A partnered person would be excluded from any Age Pension if the total, combined income of the couple is over $2,906.80 per fortnight, $75,576 per year, and/or their combined assets total more than $1,047,800 or a home and more than $833,300 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 $316 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 $316 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 and financial investments together with any ‘excess gift’ amounts and loans to family or friends.

The amount of deemed income from ‘financial assets’ has been reduced slightly by the recent changes to the deeming rates and the asset levels for the changeover to the higher deeming rate.

Deemed financial income for a single Age Pensioner

As from July 2020, the annual rate of deemed financial income for a single person is calculated as 0.25% of the first $53,000 of financial assets plus 2.25% of any additional financial assets.

Thus for, a single person with no more than $53,000 of financial assets, the deemed financial income is 0.25% of her financial assets.

For a single person with over $53,000 of financial assets, the deemed financial income is 0.25% of the first $53,000 plus 2.25% of her financial assets in excess of $53,000.

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 $88,000 of 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 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 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.

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 for general medical consultations and public hospital clinics.

Also many businesses offer ‘pensioner discounts’ particularly for services on the slower trading days.

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 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.

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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
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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.