Did you know your home is an Age Pension tax haven?
There are many ways to make an Age Pension go further without becoming a job seeker. Receiving funds that do not attract tax could give you extra spending money on top of a full government payment.
Tax-free ways of making more moolah include becoming a homestay host to an international student. The Federal Government allows households to offer one or two rooms to student boarders without having to declare the fees they are paid.
However, if you have more than two homestay students, then the extra income must be declared to Centrelink.
Hosts can charge monthly fees of around $1000 for providing a furnished room, three meals a day, access to the internet and some other household services.
The students may be 18 years or older and attend university, or 14 years and attend a secondary school. Because of the extra duty of care under-age students require, they usually pay higher fees.
To find out if a state school near you is looking for hosts visit the Australian Government Schools International website. Most private schools also operate international mini-campuses and are always on the lookout for homes to host overseas students.
Other income sources generally exempt from tax and, therefore, a nice addition to a full Age Pension are:
- a payment received on surrender of an insurance policy where you are the original beneficial owner of the policy
- spouse maintenance payments
- lottery and game show winnings
- some scholarships, bursaries, grants and awards
- rewards or small gifts such as cash birthday gifts
- certain government payments, such as the carer allowance
- certain overseas pay and allowances for Australian Defence Force and Federal Police personnel.
According to the Grattan Institute, about 1.5 million Australians are earning up to $4264 a year and are still receiving the full Age Pension. For couples, the earnings cap before the pension is affected is $7592 a year.
Some of these pensioners’ earnings are from paid work they perform. Under the Work Bonus rules, a pensioner’s first $250 of income a fortnight is not assessed under the income test.
Further, senior singles can earn a further $164 a fortnight and still receive the full Age Pension. And a combined income of $292 a fortnight – in addition to the Work Bonus figure – should not affect a couple’s government payment.
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