Post Retirement

Post Retirement Planning is about two major factors – the investment of your assets and the taxation planning to ensure that your after tax income in retirement is maximised.

Ethos Financial Advisers can assist with both asset structuring in retirement, and investment planning.

Investment planning in retirement is about ensuring your capital is protected and that your investments can grow in the future to meet your retirement income needs. Asset allocation is particularly important in retirement planning. Ethos Financial Advisers are conservative in their approach to investment.

Asset structuring means where your assets are invested, whether in superannuation or your own name or some other structure.

We can also assist in maximising your entitlement to the age pension.

Your income from superannuation may be drawn by an account based pension, through lump sum withdrawals or through an annuity and we can assess the most appropriate structure to meet your income requirements over the long term.

Social Security and Aged Care

Increase to age pension payments

The Government has announced that from 20 September 2009 it will provide age pensioners, DVA service pensioners, wife pensioners, disability support pensioners and carer payment recipients with an increase in their entitlements as follows:

for singles: an increase of $30.00 pw in the base pension and $2.49 pw in a new Pension Supplement; and
for couples: an increase of $10.14 pw in a new Pension Supplement.

The new Pension Supplement will combine the existing pension supplement, Pharmaceutical Allowance, Utilities Allowance and Telephone Allowance into a consolidated payment.

Income test: increasing the income test taper rate

The Government will from 20 September 2009 increase the income test taper from 40 to 50 cents in the dollar for a single pensioner and from 20 to 25 cents in the dollar for each member of a couple, for income above the relevant income free threshold (currently $138 pf for singles and $240 pf for pensioner couples combined).

Existing part pensioners affected by the income test changes will keep existing entitlements, maintained in real terms, plus an increase of $10.14 pw for singles or couples combined.

Under the new rules, the pension will be paid to new pensioners with private income of up $38,693 for singles, and $59,228 for couples combined, down from $47,444 for singles and $72,423 for couples combined under current income test rules.

Income test: concession for employment income

The Government will continue to encourage workforce participation among older Australians by establishing a new pension income test concession for employment income for people of age pension or service pension age from 20 September 2009. Under the new Work Bonus, half of the first $500 pf of employment income will not count for income test purposes. This will enable up to $250 pf of earnings to be excluded from means testing.

Closing of the pension bonus scheme

From 20 September 2009, the Government will close the Pension Bonus Scheme to new entrants. Existing members of the scheme will continue to accrue entitlements under existing rules.

Commonwealth seniors health card

The Government will not proceed with an element announced in the 2008-09 Budget to change the Commonwealth Seniors Health Card income test to include gross tax-free superannuation income in the adjusted taxable income test.

The Government will include income that is salary sacrificed to superannuation in the income assessment, with effect from 1 July 2009.

A new Seniors Supplement will be established for Commonwealth Seniors Health Card holders and veterans eligible for the Gold Card. The Seniors Concession Allowance and the Telephone Allowance will be consolidated into the new Seniors Supplement. The single rate of the Seniors Supplement will include an extra $129 a year, to bring it to two thirds of the rate paid to couples combined.

Increase in the age pension age

The Government will increase the qualifying age for the Age Pension and the Commonwealth Seniors Health Card for men and women to 67 years of age from 2023. The transition to the higher Age Pension age will commence in July 2017, with the qualifying age increasing by six months every two years, to reach 67 on 1 July 2023. This timeline dovetails with the current process for increasing the female Age Pension age, which is being increased from 63.5 today to 65 years of age by July 2013. The current Age Pension age for men is 65.

New annual carer supplement

The Government will introduce a new Carer Supplement. The first payment will be made by 30 June 2009 with subsequent payments starting from 1 July 2010. The new supplement will provide:

$600 pa to all Carer Allowance recipients for each person being cared for; and
$600 pa to all Carer Payment recipients.

People who receive both Carer Payment and Carer Allowance will be eligible for both payments. This supplement will be non-taxable.

Aged care – changes to basic daily care fee

To ensure that pensioners in aged care facilities retain a substantial portion of the age pension increase, the maximum basic daily fee will decrease from 20 September 2009 from 85 per cent to 84 per cent of the total base pension amount.

In addition, aged care residents who are in care on 19 September 2009, and who do not receive a pension and so do not benefit from the pension increase, or are part-pensioners who do not benefit significantly from the pension increase, will have their existing fee levels fixed at the current level until they leave care.

Those entering care after 19 September 2009 and who do not receive a pension or do not receive a significant benefit from the pension increase, will initially pay the same level of fees as is currently paid by residents. Over 4 years, their fees will gradually increase until they are paying 84 per cent of the pension, consistent with other residents.

David McManus Financial Adviser Based In Kew d.macmanus@ethosfinancial.com.au 0424 61 60 60 CFP DFP Certified Financial Planner Insurance Superannuation Retirement Planning Pension Centrelink Aged Care Income Protection

David Mac Manus Financial Adviser Based In Kew d.macmanus@ethosfinancial.com.au 0424 61 60 60 CFP DFP Certified Financial Planner Insurance Superannuation Retirement Planning Pension Centrelink Aged Care Income Protection

David MacManus Financial Adviser Based In Kew d.macmanus@ethosfinancial.com.au 0424 61 60 60 CFP DFP Certified Financial Planner Insurance Superannuation Retirement Planning Pension Centrelink Aged Care Income Protection

David Mc Manus Financial Adviser Based In Kew d.macmanus@ethosfinancial.com.au 0424 61 60 60 CFP DFP Certified Financial Planner Insurance Superannuation Retirement Planning Pension Centrelink Aged Care Income Protection