Volume 9 Edition 5 Financial Care Services Newsletter

Online at Permalink: https://financialcareservices.com.au/newsletters/vol-9-ed-5/

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

Volume 9 Edition 5 – 31 May 2019

Winter can be dark and cold. But retirees can escape the dreariness of winter by travelling north.

Travelling within Australia needs no Passport or foreign money.
Retirees can relax with the reassurance that Medicare is available throughout our great land. Pharmacies in other States will fill your PBS prescriptions at Pensioner Concession prices, so why not travel.

But Centrelink will eventually register that you are not at home in your ‘principal residence’. Those doctor’s visits and PBS prescriptions in faraway pharmacies will tell a story. Once your travel story extends a full year then your Age Pension could be impacted.

Age Pensioner ‘homeowners’ are assumed to be living in their ‘principal place of residence’. But if you are away from your ‘principal place of residence’ for a prolonged period then you could lose your homeowner status.

One year absence from home for a Centrelink homeowner

You may travel around within Australia for one year without losing your ‘homeowner’ status.
If Centrelink become aware that you have been away from your home for a continuous period of one year, 365 consecutive nights, then you could lose your ‘homeowner’ status.
If you are away for more than 52 weeks, you could be transferred to ‘non-homeowner’ status with your former home treated as an investment property for the purposes of the Age Pension Assets Test.

The impact of losing your ‘homeowner’ status depends on the value of your principal residence.
If the total value of all of your assets including your home is less than $450,000 then as a ‘non-homeowner’ you would not be impacted by the Assets Test.

But your Age Pension could be reduced significantly if you have substantial equity in your vacant home.
After twelve months away, you could become a ‘non-homeowner’, at Centrelink, with your former home counted as an investment property for the Assets Test.
Read more about the Age Pension Asset Test and the current Asset Test Allowances

You could even lose your single rate Age Pension if your home is valued at $750,000 when you become a ‘non-homeowner’ with your former home counted as an investment property.

Consider Betty who is staying long term with her sister on the Gold Coast.
Betty intended to return home after the long Melbourne winter was over but she had a fall fracturing her leg.
So Betty stayed on with her sister until she could walk confidently again. Returning to Melbourne in autumn then flying back to the Gold Coast for the winter did not appeal to Betty. So she stayed on for a second winter.

Betty allows her daughter Bella, to live in Betty’s home in Melbourne.
Betty thinks that this is just a private family arrangement for Bella to be minding her mother’s house.
But Centrelink know that Betty is having long term health treatment in Queensland.

The Council Rates notice includes a capital improved value of one million dollars for Betty’s home in Melbourne.
Betty’s Age Pension is cancelled; just counting Betty’s home as an ‘investment property’ for the Age Pension Assets Test is enough to have Betty excluded from any Age Pension.
Betty also loses her Pensioner Concession Card.

Betty could apply to Centrelink for a Commonwealth Seniors Health Card to help with her medication costs whilst she is staying on in Queensland.

On her return to Melbourne, Betty reapplies for an Age Pension. Betty has to prove to Centrelink that she really is living in her home again.

Your responsibility to inform Centrelink

Age Pensioners must update Centrelink within fourteen days of any major change of circumstances.

Remember that if you do not provide Centrelink with the details of your new asset and income position, the great government data matching computer system will alert Centrelink to your absence from your principal residence.
Centrelink could then treat you as a non-homeowner with the full government assessed value of your home included in your ‘assets’.

Hint: if you are travelling extensively then you could keep some documents to show when you were at home.
Any Medicare claim for a visit to your local medical practice appears in the great government computer proving that you were back home.
Filling prescriptions at a pharmacy near your home is further evidence that you were there in person.

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 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, granny flat or Age Pension issues please contact Christine Hopper or call +61 3 9808 0338.

______________________________

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
LinkedIn Company – follow https://www.linkedin.com/company/financial-care-services/
Facebook Page – like https://www.facebook.com/fincareservice
Twitter Feed – follow https://twitter.com/fincareservice
Past newsletters – see http://financialcareservices.com.au/newsletters/
Newsletter – subscribe http://eepurl.com/js41T

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.