Centrelink Age Pension Changes
As you may have heard in the media, there is suggestion that the Government will alter the current asset threshold for Centrelink Age Pension recipients.
The assets cut off thresholds that have been discussed are in the vicinity of $823,000 for couples (from the current level of $1,150,000) and $550,000 for singles (from the current level of $775,000).
Labor has also unveiled some proposed changes of their own. A 15 per cent rate of taxation on annual superannuation income above $75,000 in the retirement phase, and a lowered income trigger for the application of a 30 per cent rate on payments on the way in during the contribution phase – it would cut in at $250,000 in income instead of the current $300,000.
Those who lose payments are expected to retain the Commonwealth Seniors Health Card. Access to the card is not decided by an assets test and it is possible for seniors to get the card even if they do not qualify for the pension. Currently, older Australians can get the card if they are single with an income of less than $51,500 or part of a couple earning less than a combined income of $82,400 per annum.
Whilst there is nothing concrete at present, and as these changes have been pencilled in to commence in 2017, it is important that we are abreast of the potential issues and start considering whether or not you will be affected by the changes.
The budget will be released on May 12th and we will have a clearer indication after the budget as to whether any changes will be brought into effect.
We feel another big obstacle with the proposed changes is how the Government will communicate these changes to the Australian public. As always, we are here to support you working through the confusion, complexities and changes to determine how this will affect your personal situation, with a focus on your immediate budget and long term capital longevity and what we can do to support you.
*This information is editorial only. Please consult a financial planner to take into account your individual needs.