If you are in receipt of a part pension, changes to the Assets Test to be implemented on 1st January 2017 could affect your income. The Government has estimated that these changes will result in:
- 91,000 people losing entitlement to a pension
- 235,000 receiving a pension reduction
- 170,000 receiving a pension increase
What are the changes?
- The amount of assessable assets you can have and still receive a full pension will INCREASE.
- The amount of assessable assets beyond which you receive no pension at all will DECREASE.
- The rate at which the pension reduces once your assets exceed the Lower Threshold will change : Current Pension reduces by $1.50 per fortnight for every $1,000 over the Threshold. From 01 January 2017 Pension reduces by $3.00 per fortnight for every $1,000 over the Threshold.
- If you are no longer eligible to receive a pension due these changes you will automatically be issued with a Health Care Card allowing continued access to discounted pharmaceuticals.
What strategies can you consider?
Strategies to reduce assets are limited. Some of the options we can look at are:
- Gifting. The maximum is $10,000 per financial year, however you can only gift up to $30,000 over a five (5) year period so we will need to ensure you do not breach this cap.
- Funeral Bonds. Again, there are certain caps to be aware of.
- Long term annuities.
- Personal expenditure (such as home improvements, holidays, etc.).
WARNING: No strategy should be employed without first seeking advice and confirming the impact on your own particular situation. We have scheduled pension reviews from July onward but please let us know if you wish to come in earlier.