Know your limits
We all know the importance of having regular health checks with our doctor or having our car serviced at least every six months. However, how frequently do we check to see if we qualify for Centrelink benefits?
If you retired a few years ago it could well be worth checking to see if you are now eligible for the Age Pension. The reason for this is that over the last three years, given the poor performance from the world’s equity markets, the value of your assets may well have fallen. At the same time, the Asset Test limits have continued to increase broadly in line with inflation.
Today, if a couple own their own home they can also own other assets (e.g. real estate other than the home, financial investments, motor vehicles etc) of up to $1,018,000 and potentially still qualify for a part Age Pension. Of course, if the couple qualify for even a small part Age Pension, they would then be entitled to the Pensioners Concession Card. This card entitles the holder to reduced cost medicines under the Pharmaceutical Benefits Scheme as well as various other concessions like reduced utilities, rates and travel costs.
As an example, consider Bill and Mary who retired back in October 2006. At that time they were both members of their own self managed super fund (SMSF) which had a total value of $830,000. They have been drawing a combined annual income of $60,000 from their fund. They also owned a car worth $40,000 and had $30,000 in a bank savings joint account. With a combined asset base of $900,000 they were well over the Asset Test limit at that time, which was $516,500, and therefore didn’t qualify for the Age Pension.
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