January changes to the asset thresholds have left many Australians wondering how they can reduce their assessable assets to ensure they still receive an Age Pension.
On 1 January 2017, the Australian Government implemented changes to the assets test used to calculate age pensions. These changes have been widely reported in the media, and can be a little intimidating when trying to understand what they can mean for individuals, couples and their families.
The new changes include imposing new asset limits. These limits will not affect everyone, but there will always be people on the borderline who need to make sure that the new rules do not adversely affect their entitlement to an Age Pension or their Age Pension amount.
Mandy Cooper, Chief Executive Officer of the Australian Friendly Society states that one step people can take to reduce their assets tested, is to purchase a funeral bond.
A funeral bond is a capital guaranteed product designed to finance funeral expenses.
In this financial year, investments of up to $12,500 (indexed annually) in a funeral bond, such as the Bendigo Funeral Bond, are currently exempt from the Centrelink and the Department of Veterans’ Affairs (DVA) Income and Assets Tests.
Funeral bonds are typically bought by people approaching retirement, entering retirement living or nursing care. People may choose to assign their bond to a funeral director as part of a pre-paid funeral arrangement.
“As well as being exempt from income and assets tests, a funeral bond may provide peace of mind for you and the people closest to you at what can be an incredibly stressful and upsetting time” Ms Cooper concluded.
The Bendigo Funeral Bond is issued by Australian Friendly Society Limited ABN 29 087 648 851 AFSL 247028, associated with Bendigo and Adelaide Bank Limited ABN 11 068 049 178 (the Bank) and its related entities. It is capital guaranteed by the Society, it is not a deposit with, guaranteed by, or liability of the Bank or its related entities. This article include general information only, you should consider your situation and read the Disclosure Document before making a decision.