The qualifying age for the Age Pension and the Commonwealth Seniors Card for men and women will increase to 67 years of age from 1 July 2017. The Henry Tax Review report on the retirement income system also recommends aligning the superannuation preservation age with this higher Age Pension age.
Pensions and Allowances
Wahlstrom Financial Services can provide advice, strategies and assistance to help you maximise your Centrelink entitlements and we assist in explaining and completing Centrelink documentation on an ongoing basis. Entitlements we can assist you with include:
Disability Support Pension
The Work Bonus is an incentive for pensioners of age pension age to remain in the workforce. Changes introduced on 1 July 2011 further improve the work bonus. You are now able to keep more of your income, or work for short periods with little or no affect on your pension. How this works is:
The first $250 of employment income you earn each fortnight is disregarded and not counted as income (previously it was half of your first $500)
Any unused amount (if you earn between zero and $250 in a single fortnight) is now added to your Work Bonus balance, which can accumulate to $6,500
Your Work Bonus balace starts from zero in July 2011
Your Work Bonus balance is used to offset any future employment income you earn in a single fortnight above $250 - for example, if one of the only times you work each year is casually in December as Santa Claus.
Only people that receive either Age Pension, DVA Pension, Service Pension or an income support suppliment can benefit from a Work Bonus.
Commonwealth Seniors Health Card - Income Test
Based on this, from 1 July 2009, the definition of Adjusted Taxable Income (ATI) used for CSHC will include:
YTaTarget foreign income
Net investment losses
Salary sacrifice contributions
Personal deductible super contributions
Pension Loans Scheme
People of Age Pension age (or their parents) who can't get pension because of their income or assets (but not both), or those who only receive a part pension, can access capital tied up in their assets under the Pension Loans Scheme.
The Pension Loans Scheme is a voluntary arrangement which provides support in the form of a loan, for a short time or for an indefinite period. It is paid in regular fortnightly installments.
How much can I get each fortnight? You can nominate to receive an amount, up to the maximum amount of Age Pension including Pharmaceutical Allowance and Rent Assistance, each fortnight. If your entitlement is less than the full amount of Age Pension you can top-up your fortnightly payments to the maximum rate of pension.
The total amount of loan you can receive depends on the value of the property you offer as security, the equity you wish to keep in the property and your age at the time the loan is granted.
Do I have to pay interest on the loan? Yes. Compounding interest will be charged on the balance of the loan and calculated on a fortnightly basis. The interest charged increases the amount to be repaid.
Security for the loan must be secured by real estate owned in Australia. Any real estate, including your principal home, may be used as security.
The Pension Loans Scheme is secured by registering a charge with the Land Titles Office on the title deed of the property you offer as security. You will have to pay for any costs associated with this charge.
The real estate you offer as security for your loan must be valued independently by the Australian Valuations Office. This is done at no cost to you.
Do I pay tax on these payments? The loan payments you receive are not subject to income tax.
Who can get a Pension Loans Scheme Loan?
You may qualify for payment under the pension loans scheme if you:
Are a male 65 years or over, or a female of Age Pension age, or their partner receives or could receive some pension under the income or the assets test, and
Have real estate assets in Australia that can be offered as security on the loan
Must I offer all my real estate as security for the loan? No, if you have more than one property, you may wish to exclude one from the assessment for a loan.
What is a guaranteed amount?
You may decide to retain equity in the real estate offered as security for the loan.
This guaranteed amount is an agreed amount of money set aside from the value of the property you offer as security for the loans. It is the minimum amount you or your estate will receive after repayment of the loan.
When can money be paid back to Centrelink?
The loan can be repaid in part or full at any time. If you wish to see the real estate that is used as a security for this loan, you would contact Centrelink prior to orgaising the sale so arrangements can be made for the loan to be repaid at the time of sale.
The loan may also be repaid from your estate after your death.
For more information please contact Centrelink.