Your money with Noel Whittaker
Q MY FRIEND and I, both females, share a house. We are both retired and each own half the house. We are not a “couple” – we just get on well together and have shared accommodation for quite a few years now. It has enabled us to have a nice house in a nice area that neither of us could have afforded on our own. My friend has substantial assets – well over the single pension assets test limit. I only have $230,000 in super and not much else in the way of assets.
The house is paid off. Is it worth my while to apply for the pension? I believe Centrelink will view us as a couple and say neither of us is eligible. I am only asking whether it is worthwhile before putting both of us through the agony of the application, particularly as my friend will be obliged to give her information with nothing to gain from it. I don’t know where else to go to ask for help; even a few dollars a week would help my situation a lot.
A A DEPARTMENTAL spokesperson says that when single income support recipients share accommodation, the department will ask a series of questions about living arrangements to determine whether further assessment is required regarding the relationship. By law, a person is considered to be a member of a couple relationship if they are married or in a registered relationship (different-sex or same-sex), or in a de facto relationship (different-sex or same-sex) and are not living separately on a permanent or indefinite basis.
In determining if a person is a member of a couple, the department takes into account the financial aspects of the relationship, the nature of the household, the social aspects of the relationship, any sexual relationship between the parties involved, and the nature of the people’s commitment to each other.
Based on the information you have supplied, it would seem your application should be successful, in which case you should qualify for a pension of about $840 a fortnight or $21,840 a year. That could make a huge difference to your life.
Q IN JUNE my wife and I sold our permanent residence (a city apartment) for $1 million. We bought it in 2003 and hope to use part of the sale proceeds to top up our SMSF which has eroded to about $200,000.
From July 2010 to August 2016 we rented in rural Victoria while caring for my wife’s elderly mother. At the same time we rented out our apartment. We have been informed we are ineligible to place any of the sale proceeds into SMSF because we rented out our permanent home. Is this correct; could my wife’s caring role be an extenuating circumstance.
A JUST keep in mind that the proposals which will let retirees downsize and put up to $300,000 each into super are not yet law, and will not begin until July 1, 2018.
Also, it will apply only to home sales where the contract is signed after July 1, 2018, which means you would not be eligible as you have already signed a sales contract. However, all is not lost.
Provided you qualify under the age limits, and your current balance in superannuation is less than $1.6 million, you could still make non-concessional contributions up to the current limits. Anyone under 65 is eligible to contribute, but if you are aged between 65 and 75, you must pass a work test to be able to contribute. This involves working 40 hours over 30 consecutive days in the financial year in which you make the contribution.
- Do you have a question? Send to Q&A, PO Box 130, Wyong NSW 2259 or email edit@thesenior.com.au A selection of questions will be covered in this column.
