Age Pension Update – July 2019

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On the 1st of July the age pension asset and income thresholds increased, in addition to the increase in these thresholds the levels at which the deeming rates of interest are applied also increased.

Two weeks after this date the government announced that the deeming interest rates would be reduced. The lower rate dropping from 1.75% to 1% and higher rate falling from 3.25% to 3%.  This drop in deemed interest rates will be effective from the 1st of July but will not be adjusted for age pensioners paid under the income test until the end of September. Any increase in the age pension will be back dated to the 1st of July.

The following tables provide an overview of the changes as well as upper limits from an asset’s and income perspective:

ASSETS TEST

Assets test threshold for full pension:

  For homeowner’s assets must be less than: For non-homeowner’s assets must be less than:
Single $263,250 $473,750
Couple combined $394,500 $605,000

 

Assets test upper limits:

    For homeowner’s
part pension assets must be less than:		 For non-homeowner’s
part pension assets must be less than:
Single   $572,000 $782,500
Couple combined   $860,000 $1,070,500

 

INCOME TEST


Single:

Fortnightly income up to $174 pf Full payment
Reduction in payment over $174 pf 50 cents for each dollar
Upper limit $2,026.40 pf No entitlement

Couple combined:

Fortnightly income up to $308 pf Full payment
Reduction in payment over $308 pf 50 cents for each dollar
Upper Limit $3,100.40 pf No entitlement

For those retirees receiving a part age pension, the benefits of the increase in the thresholds are seen immediately with an increase in the first age pension payment they would receive in July.

However, for the retiree who is not in receipt of an age pension it is not as simple.

The first step for this retiree is to review their current assets or income position against the new upper thresholds, if they are under the new thresholds now is the time to lodge an application for the age pension.

If they are still just above the thresholds, by only a few thousand dollars now is the time to talk to an adviser about the benefits of a gift of up to $10,000 or the purchase of a funeral bond, up to the value of $13.250.  Both strategies will reduce their assets and possibly their income under either the income or assets test.

The minimum pension that can be paid is not $1 per fortnight but $36.70 per fortnight for a single age pensioner or $55.40 per fortnight combined for a couple.

 

Source:  Mark Teale | Centrepoint Alliance

What are the things retirees fear?

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That question: ‘What do people approaching retirement, and those already retired, fear the most?’

The first thing that springs to mind is the fear of not having enough money, and perhaps the fear of the money ‘expiring’ before we expire.

What about loss of relevance?
We go from being a business owner, executive, professional, or a CEO one day, to a retiree the next. No matter who we are and what we did, adapting to retirement is going to be a challenge for many people as they re-frame their life and adapt to their new role.

What will I do with my time?
Many retirees say they simply don’t know how they ever had time to work. They are simply so busy. They are the lucky ones. But for every busy retiree, there is probably another that is bored, lonely and simply doesn’t know what to do to fill in their time. They simply ‘fiddle’ around and lead a life that lacks direction.

Becoming single?
Resulting from the loss of a life partner is perhaps one of the biggest fears that many older folks have. Perhaps they have been together for forty, fifty, or even sixty or more years and then one is gone. It is not only the loss of a spouse that can be devastating, it is also the loss of family and friends as well. Include younger people in your circle of friends.

Ageing itself?
With age comes the possibility of illness, disability, and a loss of independence.
As our minds and bodies age, the things we used to do so easily become a real chore. We simply slow down to the point where life becomes a real drag.

What the government might do?
With an ageing population, the costs associated with providing pensions, health and aged care continue to spiral and present an ever-increasing challenge for any government

 

 

Source:  Peter Kelly | Centrepoint Alliance