Financial Care Services Newsletter

by Christine Hopper
Volume 12 Edition 9 – 30 September 2022

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

Income support for a dignified retirement

Australian Social Security provides tax payer funded income support to long term Australian residents who have limited financial resources.
Centrelink manage the payment of Australian Social Security benefits.

Centrelink income support is to cover basic living expenses only.
The level of Centrelink benefits does not allow for you to ‘save’ money.
You cannot expect to make significant mortgage repayments out of your Centrelink income support benefits.

Therefore, paying off your home mortgage before you stop earning could be smart.
Your retirement planning objective could be to clear your mortgage before age 60.
An unplanned early exit from the workforce could spoil your retirement plans.

Citizens who are incapacitated for working fifteen hours per week could apply for the Disability Support Pension, “DSP”.
DSP is paid at the same rates and subject to the same means testing as the Age Pension.

The full rate of Age Pension or DSP, would finance a very modest style of living in a home that you own.

Age Pension for single seniors

The full rate of Age Pension increased by 4.0% effective 20 September 2022.
The new rate of Age Pension is $936.80 per fortnight for a single person.

A single person can only be paid the full rate of Age Pension if her income is no more than $190 per fortnight and her assets do not exceed $504,500.
If she owns her own home then the asset level for a full Age Pension is only $280,000.

Each extra one dollar of income reduces her Age Pension by fifty cents under the Income Test.

Each additional one thousand dollars of assets reduces her Age Pension by three dollars per fortnight.
Centrelink assess each applicant under the Income Test and under the Assets Test.
Whichever Test hits you the hardest is the Test that will apply to you.

Under the Income Test, a single person could have an income of $2,061.60 per fortnight, $53,600 per Centrelink ‘year’, and be entitled to one dollar per fortnight of Age Pension.
But if her assets are more than $816,400, or $591,900 together with her home, then the Assets Test would exclude her from any Age Pension.

The Pension Supplements totalling $89.70 per fortnight are payable to single people who are receiving at least one dollar per fortnight of Age Pension.

Thus effective 20 September 2022, the maximum payment to a single Age Pensioner is $1,026.50 per fortnight of Age Pension and Supplements.

All Centrelink Pensioners get a Pensioner Concession Card.

Age Pension for partnered seniors living together

The maximum amount of Age Pension for each member of a couple at Centrelink increased to $706.20 per fortnight effective 20 September 2022.
Pension Supplements of $67.60 per fortnight are now payable to each Age Pensioner member of a couple.

Thus, the maximum fortnightly payment to a member of a couple increased to $773.80 per fortnight as from 20 September 2022.

Remember at Centrelink a ‘couple’ 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 choose to keep your finances separate.

Do not think that no one would notice that you live with your partner.
If your neighbours and/or your extended family think that you are cheating they could be so annoyed that they might just contact Centrelink to inform on your household.

Couples can have $336 per fortnight of income before the Income Test bites.
If the total combined income of the couple exceeds $3,156.80 per fortnight, $82,000 per Centrelink ‘year’, then the Income Test would exclude them from any Age Pension.

The Asset Test allowances for a Pensioner couple are $643,500 or $419,000 together with a home.
If your assets exceed $1,113,600 as non-homeowners or $889,100 plus a home, then you will not be eligible for any Age Pension as from 20 September 2022.

Age Pension for partnered aged care residents

When one member of a couple at Centrelink enters residential aged care they become a ‘couple separated by illness’ for Age Pension purposes.
They are still a ‘couple separated by illness’ after the second partner enters residential aged care.

Each aged care resident is charged the Basic Daily fee for housekeeping expenses.
There are no housekeeping fee discounts for couples or for residents who share a bedroom and/or bathroom.
Hence each aged care resident needs the single rate of Age Pension to cover their Basic Daily fee and essential personal expenditure.

Each member of a ‘couple separated by illness’ could be paid an Age Pension at the single rate but adjusted under the Income Test and Assets Test applicable to couples.

Indexation increase in aged care fees

Basic Daily fee for housekeeping costs

The Basic Daily fee for residential aged care is set at 85% of the single rate of Age Pension.
All aged care residents pay the Basic Daily fee.
Yes, non-pensioners and DVA War Widows pay the full Basic Daily fee irrespective of their actual incomes.

The Basic Daily fee increased to $56.87 per day effective from 20 September 2022.
Your residential aged care invoice for October could include an adjustment for the increased Basic Daily fee for the last eleven days of September.

Accommodation Supplement for Supported Residents in Commonwealth regulated residential aged care

Seniors who were classified as having ‘low means’ at the time they entered permanent residential aged care can be asked to pay a means tested Accommodation Contribution as a Supported Resident.
The Commonwealth tops up their Accommodation Contribution to ensure that the aged care provider receives the maximum Accommodation Supplement for each Supported Resident.

The maximum Accommodation Contribution increased to $63.14 per day effective 20 September 2022.

Means Tested Aged Care fees

Centrelink will be recalcaulting all means tested care fees to take account of the 20 September 2022 indexation increase in the transition levels in the means testing formula.

The means tested care fee for a self-funded aged care resident could decrease slightly to reflect the increased changeover levels.

The Annual Cap and Lifetime Cap on means tested care fees for residential aged care were also increased effective from 20 September 2022.

Commonwealth Seniors Health Card

The income limits for the Commonwealth Seniors Health Card were increased by 6.0% effective from 20 September 2022.

A single senior who has attained Age Pension Age could be eligible for the Commonwealth Seniors Health Card if her ‘adjusted taxable income’ is not more than $61,284.
A couple living together could have a combined ‘adjusted taxable income’ of $98,054 and be eligible for Commonwealth Seniors Health Cards.

Your ‘adjusted taxable income’ is calculated for a July to June financial year: an income tax year.
Your claim for a Commonwealth Seniors Health Card must show your ‘adjusted taxable income’ for the last completed financial year for which you have lodged an Income Tax Return.

But you may ask to be assessed on your projected ‘adjusted taxable income’ for the current financial year if your circumstances have changed significantly.
For example, if your income has dropped substantially because you have recently stopped fulltime work.

Remember, the definition of ‘adjusted taxable income’ for the Commonwealth Seniors Health Card is different from the Age Pension ‘assessable income’.

The main benefit for holders of the Commonwealth Seniors Health Card is PBS medication prescriptions at the Pensioner Concession prices.

Help with checking your situation against the qualification and means tests.

Christine Hopper helps clients check their situation against the residency and means tests for the Age Pension.

Contact Christine for the Financial Care Services Age Pension data form to prepare for your Age Pension ‘personal financial factual information‘ consultation with Christine.
You will also receive the Client Services Guide for Christine Hopper that gives you essential information about how Christine works with her clients.

You could then meet with Christine to look at your personal situation.
Christine could explain how Centrelink could calculate ‘income’ for your situation.

If the means tests would exclude you from the Age Pension then you could consider a Commonwealth Seniors Health Card.
You could ask Christine for the Financial Care Services Commonwealth Seniors Health Card illustration data form to help you collect the data needed to estimate your ‘adjusted taxable income.’.

A younger partner might be eligible for a Low Income Health Card when the older partner has an Age Pension.

If you have not been excluded from the Age Pension by the age or residency qualifications and you hope that the means tests would not exclude you then you could apply for an Age Pension.

Christine helps clients to complete the Age Pension Claim forms.

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 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 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 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 info@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.