Assessing your eligibility for the Age Pension can be a daunting and complicated task, when there are many variables to consider. Centrelink assess any entitlement to the Pension under the Incomes Test and the Assets Test, but applies that Test which produces the least entitlement. It is a matter of determining which Test applies to your circumstances.
For example, under the Incomes Test, ‘financial assets’ are ‘deemed’ to earn a regulated rate of return, which can change at any time. Furthermore, there are two levels of ‘deeming rates’ applied, within an asset value threshold. The ‘deeming rates’ apply, regardless of the actual earning rate of the respective investments. Yet not all financial assets as we define them, are treated as ‘financial assets’ for Incomes Test purposes.
Furthermore, once other income exceeds a certain low threshold, the pension is reduced progressively to an upper threshold, at which level, the pension entitlement will cease.
Similarly, under the Assets Test a low and upper threshold for both homeowners and non-homeowners), exist. While the personal residence is exempted from the Assets Test, personal use assets – motor vehicles, caravans, personal effects and so on – are treated as assets.
We are able to sort through the maze for you and provide an assessment of your potential entitlement, as well as strategies that maybe available to enhance a benefit or to obtain a benefit.
Aged Care is an even more daunting issue, both emotionally and strategically. In addition, the implementation and the cost of Age Care is closely linked to an Age Pension benefit. Aged Care costs can often encompass three separate fees – the Basic Daily Care Fee, the Daily Income Tested Fee and an Accommodation Bond or Charge.
We can assist you in calculating the various Fees levels, as well as to devise strategies to reduce the level of fees.
For people moving into Aged Care, obtaining Financial Advice is increasingly important to not only understand the options available to them but also the payment options, especially when the Centrelink criteria is in conflict with many aged care centre rules and the impact of these on the client’s financial position. Negotiating the Age Care maze is a stressful time, not only for the person entering care but also for their family members who are often the ones who are left with the task of:
- Arranging assessment
- Locating a suitable facility
- Negotiating costs for care
- Deciding whether to pay a bond or accommodation charge or some of each
- Dealing with Centrelink
- Making decisions on whether to sell or retain the family home
Getting any of this wrong can have significant impacts on client cash flow, Centrelink entitlements and estate planning goals.
Getting the right advice when it comes to transitioning to an Aged Care Facility is very important. The process is complicated and without the right advice could have major implications on your Centrelink entitlements and or assets at death.
Desirable outcomes from seeking professional advice:
- Maximising Centrelink entitlements (aged pension)
- Minimising Aged Care Costs
Whether you are reaching the age where you will soon require Aged Care or you are assisting your elderly parents to transition to aged care, it is IMPORTANT to seek professional assistance.