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Retiree Finance News Feb 2023

There are a couple of legislated changes that may impact you.

Are you now eligible for the Commonwealth Seniors Health Card (CSHC)? Income Threshold Increase Effective 4 Nov 2022

The CSHC has a range of benefits such as reduced prices on medication, bulk billing at your doctor, discounted public transport and state government rebates on utilities like electricity..

The eligibility for the CSHC is income tested, not asset tested (although income is deemed from your assets).

You are eligible if:

If you are single and your income is below $90,000.

If you are a couple and your income is below $144,000.

If you are an couple separated by illness, respite care or prison and your income is below $180,000.

The definition of income is Adjustable Taxable Income + Deemed Income (from account based pension income streams).

If you are a self funded retiree with an account based pension from prior to 1 Jan 2015 with exempt income for the CSHC but with high fees and/or limited investment choices, this may provide you with an opportunity to keep the CSHC whilst updating your pension to lower fees and improve your investment options. However it is important to compare your options and ensure the numbers stack up for you. If you would like to do a comparison of the scenarios, please contact us for our Comparison service.

Please contact us for information on how the income is calculated and/or see more information here on the Services Australia government site.

Increase to amount allowed in tax free Pension accounts:

Indexation of the General Transfer Balance Cap

The General Transfer Balance Cap determines how much you can move into the tax free environment of the pension phase of super. From 1/7/2023, the amount you can transfer has lifted from $1.7 million to $1.9 million.

This is a $200,000 increase. If you are considering commencing a pension prior to the end of this financial year, it may be worth holding off as you will be able to transfer an additional $200,000 into the tax free environment of a super pension account.

This ties in with if you are downsizing your home where you could contribute more to super before moving the funds into pension after 1 July 2023. See our posts on Downsizing for more information on Downsizer Contributions.

With the increase in interest rates, it may be beneficial to move a term deposit into superannuation and the increase in caps could enable this.

Crunching the numbers will help you determine a strategy that will work for you.

Rules changes make it easier to downsize:

2 years home sale proceeds is exempt from Age Pension asset test

From 1 Jan 2023, the government has extended the time the proceeds from the sale of your home, that you intend to buy another home with, are exempt from the asset test for Age Pension calculations. The asset test exemption was previously for 12 months, but it has been extended to 2 years with an additional year available if you haven’t purchased a new home due to circumstances outside of your control.

The capital you intend to use to buy another home will be deemed but at the lower rate of 0.25% compared to the full rate of 2.25% as it was last year. It will increase your total assessable income and possibly lower your pension based on the income test.

For more information refer to the Services Australia website. Link here.

If we can be of assistance, please give us a call or secure message us via this website.


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