Home' Retire Successfully : November 2016 Contents Next, Meg and Darcy need to work out
the pension level they are entitled to under
the income test. They have assessable
income of $16,900 (or $650 per fortnight).
The level of (combined fortnightly) pension
they are entitled to will decrease by 50
cents for every dollar they earn over $292
per fortnight. They may therefore receive a
pension entitlement of $29,728.40 a year
under the income test.
Finally, they need to compare the results of
both tests to see how much pension they
are entitled to – that is, whatever is the
lesser amount. Their pension entitlement
is determined by the income test as it
produced the lower figure (in this case
$29,728.40 a year).
Source: RI Advice Group Pty Limited
Maximising your pension
You may receive more age pension if
you are able to minimise the amount of
assessable income and assets you have.
You could do this in two ways:
1 Choose investments that are favourably
assessed by Centrelink
2 Value your assets in line with accepted
Other government benefits for
pensioners and retirees
Even if you only receive $1 age pension,
you are entitled to certain benefits from the
Pensioner Concession Card including:
• bulk billed medical rates
• discounts on eligible prescriptions
• lower council and water rates
• cheaper car registration
• reduced fares on public transport.
Choosing ‘social security
Investment decisions should not be
solely driven by ‘social security friendly’
motivations. When planning your retirement
finances, the four principles of wise
investing (page 15) should be considered
first. Then you can move on to other
considerations such as finding a good
balance between achieving your financial
goals and maximising your age pension.
The table on the next page shows why
some investments are considered ‘social
Valuing your assets in light of the
Centrelink has guidelines about what it
considers to be an asset. These may be
quite different from the way you would value
your assets. Here are some useful tips that
could legitimately reduce your asset value:
• Don’t include the value of your home.
• Use the ‘fire or garage sale’ value for
personal assets, and not the insurance
or replacement value.
• Pre-pay your funeral expenses (or invest
up to $12,500 in a funeral bond).
• Spend money renovating your home.
• Make a gift of up to $10,000 per financial
year (per couple or single) – with a limit
of $30,000 over any five year period.
The value of these concessions varies but
is estimated to be worth around $800 to
$1,200 a year if you are single or $1,500
to $2,000 a year for a couple.
The Commonwealth Seniors Health
If you are excluded from the age pension
because you have too many assets or
too much income, you may be entitled to
the Commonwealth Seniors Health Card
(CSHC) – provided you are pension age
and have adjusted taxable income less than
$52,796 a year if you are single or $84,472
(combined) a year if you are a couple (as at
Treatment by Centrelink
Non-account based income
streams eg, lifetime/fixed
(term > 5 years)
Only part of your income payment is assessed
by Centrelink under the income test.
Note: Pensions that commenced before 20 September 2007 that
meet certain criteria may be eligible for a 50% or 100% asset test
exemption. Pensions commenced on or after 20 September 2007 are
fully assessable under the asset test.
streams eg, allocated
Account based income streams commenced from
1 January 2015 are assessed under the deeming rules.
Some people who commenced an account based income
stream before 1 January 2015 may have only part of their
income payment assessed under the Centrelink income test.
Your rental income, less allowable expenses, is assessed
under the income test.
earning more than the
current deeming rates
These investments are assessed as earning income at
deeming rates. The portion of the return greater than the
deeming rates is not assessed by Centrelink under the
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