Sale of shares

My wife and I are both on the full pension. 
Our total assets were only $50,000 savings in our bank.

In Julywe were persuaded to buy some shares because of a tip from a friend and we purchased 70,000 of these shares for 10 cents each. Now these shares are worth 62 cents each giving us a substantial profit if we sold them. Our question is what do we do.

Our problem is how will this effect our pension. Either by way of income or assets. We cannot afford to lose any part of our pension.

David C

 

6 comments

a couple can have up to app $324k in shares, bank etc before Pension would reduce underr the Income Test. All good.

https://www.humanservices.gov.au/individuals/services/centrelink/age-pension/how-much-you-can-get/assets-test/assets

Good for you, if you own your own home you can have $394,000 in the bank so stop worrying and buy your friend a box of beer or a nice bottle of Scotch. lol

Not $394k, that's total assets

Wow! There is a huge variation amongst pensioners. The poorest pensioners have nothing. Then the homeowners are another varied group as far as wealth is concerned. People hear the word pensioner and assume it is one homogenous group. It would be interesting to show these variations to help people understand how some pensioners are destitute whilst others are well off. 
I think we are middle ground. We have our own home but not much else. We have an old car. I still consider us lucky compared to a single pensioner who rents. We manage okay from pay to pay but are very good at shopping and saving. We do not go out to restaurants or drink or smoke so that helps keep our heads above water. A big expense could see us in difficulties though! 

The variations are on the Centrelink website. You can clearly see the amount of Assets and Income you can have and still get the full pension, or a part pension. Just as in general life, there are huge variations. 

that's a profit of $36,400 approx so won't affect any pension payment from centrlink although you will need to update centerlink with your adjusted assets if you sell, also the ATO will be interested in the capital gains side if you sell so talk to a good tax agent

Would there be capital gains payable on that amount divided between them if they pay not tax?

I would still talk to a tax agent to make sure as no indication that they do or don't earn any other income & even though they said "we purchased" but maybe the shares are in only 1 name & not both. Still worth checking.

For a couple, you can receive up to $308 per fortnight before the age pension is reduced.

$308/FN is 308*26=8008 pa.

The deeming rate on the first $52,000 of assets is 1% now, yielding $520 towards the $8008.

The remainder (on top of the $52k) is deemed at 3%, meaning you can have assets up to $249,600 (x 3%=7488).

$52K + $249.6K = $301,600 total assets deeming to 520 + 7488 = $8008.

Divide 8008 by 26 to get the max. income of $308/FN.

So lose no pension if you have no more than $301,600 per couple.

Not sure where the other numbers quoted in the comments come from : probably old thresholds (now $52k) and old deeming rates (now 1% and 3%).

 

For a couple, you can receive up to $308 per fortnight before the age pension is reduced.

$308/FN is 308*26=8008 pa.

The deeming rate on the first $52,000 of assets is 1% now, yielding $520 towards the $8008.

The remainder (on top of the $52k) is deemed at 3%, meaning you can have assets up to $249,600 (x 3%=7488).

$52K + $249.6K = $301,600 total assets deeming to 520 + 7488 = $8008.

Divide 8008 by 26 to get the max. income of $308/FN.

So lose no pension if you have no more than $301,600 per couple.

Not sure where the other numbers quoted in the comments come from : probably old thresholds (now $52k) and old deeming rates (now 1% and 3%).

 

Couple lower tier for deeming is $86100, my figure of app $324k is accurate

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