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Are you receiving the correct Age Pension Payments?

Age Pension eligibility is calculated by a means test assessment.

Both income and assets are assessed by Centrelink/DVA in order to determine eligibility and payment amounts.

The current maximum age pension payments are

Single $1064.00 per fortnight

Couple $802.00 each per fortnight

Income assessment

Recipients are able to earn $204.00 per fortnight for singles ($360.00 for couples) before a reduction can be applied to payments. Payments are reduced to zero when annual income reached $60,632 for singles and $92.768 for couples.

Assets assessment

Home-owners can have a maximum of $301,750 assessable assets ($451,000 for a couple) before pension payments are reduced. Payments are reduced to zero when assessable assets reach $656,000 for a single ($986,500 per couple)

Applicants who fail the income test for any pension payment may qualify for the Commonwealth Seniors Health Card if the income is between $60,632 and $90,000 for a single. ($144,000 combined income for a couple)

Are you receiving your correct payments?

 

Information provided as at August 2023

Article by Paul Dwyer, our advisor in Victoria

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Loan Scenario of the Week (25/08/2023)

Alan (aged 69) and Wendy (aged 65) live in their unencumbered home in Sydney’s Northern Beaches. They also own a holiday home on the South Coast.

 

Wendy is still working as a consultant. However, for the past 6 months she has been sick which has reduced their income considerably.

 

Alan is retired and they are reducing the self-managed super fund capital to meet their current living costs due to the drop in Wendy’s income. They have gotten a Reverse Mortgage to pay out the credit card debt they have (approximately $16,000) and then have funds available for living costs until Wendy recovers. Then going forward to have funds available if required for ongoing expenses if needed and one off discretionary costs.

 

They have plans to sell their Northern Beaches home and move to their holiday home on the South Coast in 5 years time.

 

As they have over $3million in assets and the loan maximum facility will be less than 10% of this they will most likely still leave a large inheritance and they will have funds to pay for aged care costs in the future, it is more than likely that the property will appreciate by more than the cost of the loan, especially if the sell and pay it out in five years time.

 

If you would like to know more about how a Reverse Mortgage can help you achieve your lifestyle aspirations please call Raymond on 0438 184 784 or Nicholas on 0438 184 785.

 

 

(Names, locations, amounts, & other personal details have been changed to protect the client’s identity.)

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Loan Scenario of the Week (18/08/2023)

Neil (aged 66), lives in his home on the NSW South Coast. He has lived there for over 30 years and
inherited the property from his father. It is an acreage property. The zoning on the property was
rural, with the council changing it over the years. Currently the quarter of the property around the
house is zoned residential. A third of the property is zoned light industrial with the balance of the
zoned environmental protection.

There is a regular mortgage of approximately $300K to over the property.  Neil is currently working
occasionally as a consultant. But this work and receipt of payment has been sporadic since Covid. He
did over $15,000 of work in May but is yet to be paid. As a result, his mortgage shows a month in
arrears. He also has some arrears on his rates which he is paying off. He wants to take a Reverse
Mortgage to pay off his mortgage so that in future he will not be so affected by late payments and
sporadic work.

He is also looking to gift his son $100,000 to help him purchase a property. As his property is valuable
with multiple zonings he does not receive any Centrelink pension so the gifting will not effect any
pension. Other funds will be used to undertake property maintenance and fund travel. By removing
the need to make monthly loan repayments Neil will be able to live his life comfortably and stay in
his property for years to come.

Whilst he is planning on gifting funds to is son, he expects to be able to leave an inheritance to his
family despite the Reverse Mortgage, and he can later sell the property if he needs to pay for aged
care. The loan is not to top up his income but will reduce his outgoing payments so he can live
comfortably on his income. Neil intends on making payments as his work permits, but this Reverse
Mortgage has allowed him the freedom of not stressing about regularly making repayments.

(Names, locations, amounts, & other personal details have been changed to protect the client’s
identity.)