Your money Q&A
Q I AM considering retirement next year and will be 69. My husband is 54 and won’t retire for some time. I will have about $240,000 in super and $20,000 in long service. My husband is a self-employed low-income earner ($2000 per month). What, if anything, will I be entitled to, such as a part pension? We own our home and cars and have no other assets.
A THE $260,000, which is the total of your superannuation and long service leave, will be subject to deeming. It should produce a deemed income of around $277 a fortnight. You say your husband is self-employed – his taxable income may be less than $2000 a month. But if we assume it is $2000 a month for Centrelink purposes you should be eligible for around $460 a fortnight under the income test.
Q MY WIFE and I are both 79 and our only income is the age pension. I worked part-time until my employment was terminated in November last year.
I applied for and am receiving compensation for a work-related injury of $369 per week. We have no assets/cash on hand. What will our tax situation be now I am unemployed and unlikely to ever work again. My wife is unable to work.
A THANKS to the combination of the Senior Australian Pensioner Tax Offset and the tax-free threshold of $18,200 a person I cannot see you would be in a position where either of you would be paying tax.
Q I AM 83, my wife is 78. We own our home and receive a pension of $250 each fortnight based on our assets of $670,000. Last year our taxable income was $25,000 each, which was tax-free, and we also received franking credit refunds totalling $6800. Could you please advise what would be our position if one of us died, both under the existing rules, and under the new rules proposed by Labor.
A IN EACH the survivor would become subject to the rules for a single homeowner and would lose any pension, as the assets cut-off point for a part singles pension is $556,500. Under the existing system the survivor would retain the franking credits of $6800 – but under Labor’s proposed changes the survivor would lose the franking credits as well as the pension. Your best course of action would be to take some estate planning advice and arrange your wills so that enough of your investment portfolio is bequeathed to others to ensure the survivor stays under the assets test. Then they could keep a part pension, and the franking credits, irrespective of who wins the next election.
- Do you have a question? Send to Q&A, PO Box 130, Wyong NSW 2259 or email email@example.com A selection of questions will be covered in this column. Personal replies will not be given.