Volume 6 Edition 3 Financial Care Services Newsletter

Is your electoral enrolment correct ready for the 2016 federal election?

A federal election is to be held in 2016 on a date yet to be announced. But once the election date is announced and the writs are issued for an election you have only seven calendar days to update your electoral enrollment.  Maybe you could check your enrollment online now.

When you need to get on to the right electoral roll at the right address

Remember that moving to a retirement lifestyle living community village near your previous home is still a change of address that necessitates a new electoral enrolment.
The Australian Electoral Commission (“AEC”) now provides for you enrol online if you have changed address recently. Your new Identity check is via your Passport or Driver Licence number. Start here to change your address on the electoral roll

When someone no longer understands what voting is about

If your relative no longer has the mental capacity to comprehend voting in a federal election then you could apply to have the name removed from the electoral roll.
You could start the process by downloading the form see the section “A relative has dementia,,,”, A paper copy of the form must be completed by a medical practitioner who knows the demented person. The medical certification protects mentally competent people being removed ‘accidently’.

What about deceased aged care residents enrolled to vote?

If the death occurred in Australia, the State, or Territory, Registrar of Births, Deaths and Marriages will inform the AEC and the deceased person’s name will be removed from the electoral roll.
But if an elector dies outside of Australia then a family member or close friend, could contact the AEC to have the name removed from the electoral roll. Contact the AEC 

Social Security and Veterans Pensions increase from 20 March 2016

The Commonwealth increased the maximum rates of DSP, Carer, Age and DVA Pensions by 0.8% from 20 March 2016.

The Age Pension related Basic Daily fee for Commonwealth regulated aged care increased to $48.25 reflecting the Age Pension increases of 20 March 2016.
The caps on the total amount of means tested care fees and the crossover points in the aged care means tested amount formula also increased to reflect the increase in the Age Pension rate.

How much is the Pension for a Single Person?

The new maximum total payment for a Single Pensioner is $873.90 per fortnight, an additional $6.90 per fortnight. The maximum payment for a Single Pensioner includes Pension Supplements totalling $79.10 per fortnight. The Supplements are paid to income support beneficiaries who receive at least one dollar of Pension per fortnight.

The maximum payment to a Single Centrelink Age Pensioner or full-time Carer, is $873.90 per fortnight, that is, $22,700 per year.

Thus the Age Pension benefit supports a frugal lifestyle for a single retiree who owns a home without any major debts.  

A senior who is retrenched before her Age Pension Age could apply for NewStart whilst she seeks other employment.  The NewStart Allowance is paid at a significantly lower rate than the Age Pension but NewStart could be the only source of regular income for an early retiree without some savings.

Maybe now is the time to seriously consider clearing your personal debt and paying off your home mortgage before you find yourself retired.

Contact Christine at Financial Care Services to book an appointment to discuss your long term planning for when you no longer earn an income from work.

How much can I have in other income and assets before I lose the Pension?

Currently, under the Asset Test, a Single Pensioner could have $734,700 of assets in addition to her home and retain an Age Pension of one dollar per fortnight together with the full rate of Supplements. But under the Income Test, she must not have an Income of more than $1,749.60 per fortnight, $45,400 per year, if she is to remain entitled to that last one dollar per fortnight of Age Pension.

The partnered rate of Age Pension is lower as couples are assumed to share some domestic expenses.

The maximum Age Pension payable to a member of a couple at Centrelink increased to $599.10 per fortnight plus Supplements of $59.60 per fortnight.

Thus a couple living together could receive a maximum combined payment from Centrelink of $1,317.40 per fortnight, including Supplements. At this rate, the total combined annual income of $34,250 could allow a homeowner couple a very modest standard of retirement living.

Additional resources would need to be accumulated before retirement to finance extensive travel and/or leisure activities. But the Pension means tests reduce the amount of Age Pension payable to retirees with significant assets or income streams. Read more about cut-off limits under the Asset Test and the Income Test

A major change to the Asset Test is expected for January 2017 but the detail is not yet published.

The Commonwealth has announced that

• the Asset Test taper rate will be increased to $3 per fortnight per $1,000 of additional assets over the Asset Test threshold, and
• the Asset Test thresholds will be increased.

The maximum amount of Assets that a retiree could have and retain that last one dollar per fortnight of Age Pension is expected to reduce significantly in January 2017. But the 2017 cut off levels are unknown as only indicative amounts have been announced for the new levels at which the Asset Test will cut in.

The combined impact of the increasing age for becoming eligible for the Age Pension and the tightening of the means tests could be that seniors would be utilising their accumulated resources to finance their initial periods of retirement living.

Financial challenges await seniors retiring from the workforce without substantial assets and full home ownership or a public housing place.

The financially challenged retirees could include seniors who could not pay off the home mortgage before leaving the full-time workforce and seniors renting in the private sector. Moving to a less expensive housing might be the better solution when the regular pay packet declines.

Remember, Australian Social Security provides a basic income for permanent residents who are in constrained financial circumstances. The Age Pension is adequate for a frugal lifestyle for seniors who fully own their own homes. Public housing tenants might also just manage on the Age Pension. Private sector tenants could be spending at least one third of the Age Pension on housing costs after allowing for any Pensioner Rent Assistance.

If you are hoping for an active retirement then you would need to have completed the purchase of your home and accumulated some additional resources.

Financial Care Services offers Retirement Planning consultations to assist retirees make good decisions. Contact us for the Financial Care Services Retirement Planning Advice data form; you will also receive the Financial Care Services Financial Services Guide that includes our Privacy Policy and fee structure.

Financial Care Services is an independent financial advisory service specialising in retirees of modest means and aged care entrants. Our core values of working with clients in their lifetime financial planning supports claiming DVA and Centrelink entitlements.

Financial Care Services charges fees based on the work involved in advising you about pensions and aged care financial solutions and arranging your investments.
___________________________________________________

Christine Hopper

Director

Director
Financial Care Services Pty Ltd
Independent aged care, lifestyle and financial advice for seniors in Melbourne, Victoria, Australia
Australian Financial Services Licence Number
299570 (check this at www.search.asic.gov.au/fsr/flb.html)
Authorised Representative Number
252529 (check this at www.search.asic.gov.au/fsr/far.html)

Telephone – call +61 3 9808 0338
Email – contact info@financialcareservices.com.au
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Disclaimer: The information contained in this newsletter is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before investing any money or moving in to any retirement village, lifestyle community or aged care facility. Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations.

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.

© 2016 Financial Care Services Pty Ltd. All rights reserved.