As a member of BAN TACS Accountants, IN8 Business Advisory has exclusive access to Noel Whittaker’s tips on building your wealth and minimising your risk. This latest article discusses the merits of salary sacrificing to maximise your superannuation contributions. Consult your financial advisor for further guidance.
In January, asset pensioners should be aware of a change in pension. In his latest article, Noel Whittaker explains in depth what to be aware of and how you can maximise your annual pension.
The changes to the aged pension assets test which took effect this month have meant that some asset pensioners have an increased pension, and some have a reduced pension. If you are an asset tested pensioner you should be aware that even though your home is an exempt asset, your personal effects such as furniture and vehicles are still counted.
Many pensioners do not realise that the Centrelink valuation of these assets is at second-hand value, not replacement value. This would put a value of $5000 maximum on most people’s furniture. Just think what they would be worth if you sold them on the footpath on a wet Saturday morning. Also, keep in mind you can gift $10,000 a year with a maximum of $30,000 over five years.
Because of the changes in the asset test threshold some pensioners who were previously asset tested have become income tested. If you are one of these, or even if you are income tested now, you should take advantage of the Work Bonus scheme if you can.
The purpose of the Work Bonus scheme is to encourage retirees to take on some casual work to supplement their pension. It allows an age pensioner to earn $250 a fortnight from a genuine paid job – not self employed. The recipient must be over age pension age.
Under this scheme it would be possible for a couple to have total assessable income of $792 a fortnight and retain the full pension. That is $292 pf Centrelink assessable income such as deemed income PLUS $250 each per fortnight of wages under the work bonus. If either earned more than $250 a fortnight from wages the excess would be included in the income test.
More information is available at https://www.humanservices.gov.au/customer/services/centrelink/work-bonus
Think about it – this would enable a couple to get the full pension plus an extra $20,592 a year!!
Australia is still borrowing more than $1 billion every month and the welfare bill is blowing out. This is why savvy pensioners will do all they can to maximise their pension – who knows when the next cut will come.
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: noel@noelwhittaker.com.au
