THE age pension thresholds and the deeming rates changed on 1 July.
The asset cut-off points for a homeowner couple are now $1,092,000 - for a single pensioner $735,750. The income test cut-off points are $70,553.60 per annum for a couple and $46092.80 for a single.
Financial assets are now deemed to be earning 2.5% for the first $77,400 ($46,600 for singles), and 4% on the balance. For example, if a couple had $300,000 of financial assets their deemed income would be $10,839 a year being 2.5% on $77,400 ($1935) and 4% on $222,600 ($8,904). These include interest bearing deposits, debentures, shares, share trusts, and friendly society and insurance bonds. However, it does not include property, and money in account-based pensions.
The changed rates should mean a pension increase for most part pensioners, and it may mean that people who were previously ineligible may now qualify for a part pension. There is an important message here for holders of the Commonwealth Seniors Health Card - they are the ones most likely to find themselves now qualifying.
Even though the part pension may be small it does entitle you to most of the prized concessions.
Your superannuation is not counted until you reach pensionable age. We often encounter situations where the husband may be 65 or more and where the wife less than 60. Wherever possible we encourage as much superannuation as possible to be held in the wife's name, as it is not counted by Centrelink, and this enables the husband to maximise his pension.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: firstname.lastname@example.org.
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