Volume 7 Edition 9 Financial Care Services Newsletter
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Financial Care Services Newsletter by Christine Hopper
Independent aged care, lifestyle and financial advice for seniors
Volume 7 Edition 9 – 28 September 2017
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 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 financial planning objective could be to clear your mortgage before age 60. An unplanned early exit from the workforce could spoil your retirement plans.
A Retirement Planning consultation with Christine at Financial Care Services could help you plan wisely. Contact Christine for the Financial Care Services Retirement Planning data forms. You will also receive the Financial Care Services Financial Services Guide detailing our skills qualifications and fees. Call Christine now on 039808 0338 to start your retirement planning.
Age Pension for older seniors
Permanent Australian residents who were born before July 1952 can apply for an Age Pension now.
The full rate of Age Pension 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 0.7% effective 20 September 2017. The new rate of Age Pension is $814 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 $168 per fortnight and her assets do not exceed $456,750. If she owns her own home then the asset level for a full Age Pension is only $253,750.
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 here 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 $1794 per fortnight, $46,644 per Centrelink ‘year’, and be entitled to one dollar per fortnight of Age Pension. But if her assets are more than $727,750, or $524,750 together with her home, then the Assets Test would exclude her from any Age Pension.
The Pension Supplements totaling $80.40 per fortnight are payable to single people who are receiving at least one dollar per fortnight of Age Pension. All Centrelink Pensioners get a Pensioner Concession Card.
Thus the maximum payment to a single Age Pensioner is $894.40 per fortnight of Age Pension and Supplements.
Age Pension for partnered seniors
The maximum amount of Age Pension for each member of a couple at Centrelink increased to $613.60 per fortnight. Pension Supplements of $60.60 are payable to each Age Pensioner member of a couple.
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.
Couples can have $300 per fortnight of income before the Income Test bites. If the total combined income of the couple exceeds $2,750.40 per fortnight, $71,510 per Centrelink ‘year’, then the Income Test excludes them from any Age Pension.
The Asset Test allowances are $583,500 or $380,500 together with a home. If your assets exceed $991,900 as non-homeowners $788,900 plus a home, then you will not be eligible for any Age Pension
Read more about Age Pensions for Couples separated by illness
Estimating your potential Age Pension rate.
You could use the Centrelink Pension Estimator provided that you understood the income and asset definitions.
The less stressful option is to arrange a Short ‘personal financial factual information’ Consultation with Christine at Financial Care Services. Christine is experienced with Centrelink Pension Applications and the many Centrelink financial means tests.
Financial Care Services offers Short Consultations for ‘personal financial factual information’ to help you check your financial position against the means tests for an Age Pension or Commonwealth Seniors Health Card.
You can start the by emailing for the Financial Care Services Financial Services Guide and Age Pension Data form.
The fee for a Short Consultation 45 minutes in person or by telephone and/or email for ‘personal financial factual information’ is $99.
Christine could also assist you with collating your personal data, estimating how much Pension or Carer Payment you could expect to receive and completing the Centrelink forms for you to sign. Normal hourly rate consultation fees apply for assistance with personal data collation, completing Centrelink forms and attendance at a Centrelink office with you.
But what if you have to retire early
If you are disabled to the extent that you cannot work 15 hours per week then you could apply for the Disability Support Pension (DSP). DSP is paid at the same rates and subject to the same means testing rules as the Age Pension.
But if you are ‘legally blind’ then you can have the full rate of DSP or Age Pension without any financial means testing.
Seniors can find themselves involuntarily retired at age sixty; too young for an Age Pension, too healthy for DSP but ‘too old’ for a ‘youth focused’ workforce.
As a society, Australia ensures a basic level of income support for all citizens. If you are early retired but without financial resources then Centrelink would usually pay you a NewStart Allowance.
The single person rate of NewStart is only $538.80 per fortnight. This funds only a very frugal lifestyle.
But if you have attained age 60 years and have been on Centrelink income support for at least 39 weeks then you could have your single rate of payment increased to $582.80 per fortnight. This rate of Allowance is substantially below the Age Pension rate for a single person.
NewStart has a liquid assets test. Your NewStart Allowance could be deferred if are single and have at least $5,500 of money available immediately.
Your NewStart payments could also be deferred if you were paid a lump sum in respect of accrued annual leave or long service leave.
The NewStart Income Test starts to reduce your payment rate once your income reaches $104 per fortnight. But overall you could be better off taking any available casual work and receiving a lower NewStart payment.
NewStart recipients must engage in Centrelink approved work related activities. For example, as a senior you could apply for jobs, work as a causal or participate in voluntary services in your community. Every fortnight NewStart recipients must tell Centrelink what they have earned and what they have been doing workwise.
Before you actually retire preview your potential financial position.
Help is available Financial Care Services offers two packages for seniors considering retirement.
Option 1 is the Short Consultation for ‘personal financial factual information’ only looks at your eligibility for Centrelink Income Support benefits such as the Age Pension for older people or NewStart for younger seniors.
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 Financial Care Services to obtain the Age Pension Illustration Personal Data form. You will also receive our Financial Services Guide that provides essential information about Financial Care Services.
Option 2 is ‘Retirement Planning Consultation: a detailed consideration of your assets, your income, your debts and your housing needs. Retirement Planning involves ‘professional financial advice’ to consider your whole situation and future financial arrangements. Financial Care Services charges professional hourly rate fees for all consultations that include financial advice and/or discussions about your financial position.
Retirement Planning Consultations require more detailed personal and financial information to be provided by the client to allow for the potential implications of your health status, housing needs and any liabilities to be considered in addition to the structuring of your assets to generate “retirement income” including any Age Pension entitlements. Retirement Planning Consultations are charged at professional adviser hourly rate fees.
Financial Care Services your independent financial adviser
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.
To make an appointment for confidential, independent and professional advice about aged care, retirement lifestyle or financial issues please contact Christine Hopper or call +61 3 9808 0338.
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
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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.
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