Q. I HAVE told my parents they can build a granny flat in my backyard. They own their own home and the flat would take about eight months to build. Is it best to take out a personal loan, start building, pay loan repayments then when the flat is completed, sell their house and pay out the loan; or borrow off their house and when flat is done sell their house and then repay the lender?
A. Either way would be fine – it may be worth talking to a good mortgage broker. Granny flat arrangements are complex and you should take advice from an aged care specialist sooner rather than later. The book Aged Care Who Cares by Rachel Lane and myself has a chapter on granny flats. Read that as a first step.
Q. MY wife and I (71 and 70) are age pensioners on the asset scale for pensions. We hold some Medibank Private shares and have private health insurance with them. We have no taxable income, so don’t pay tax. Can we claim a refund for the fully franked dividends we get from Medibank, and are we able to receive any part of the “premiums eligible for Australian Government rebate” that appear on our health insurance statement?
A. YOU are certainly able to get a refund of the franking credits from any of your dividends. The rebate for private health cover is deducted from any tax you owe in the financial year, but based your taxable income will be zero, so the rebate is not able to be used.
Q. I HAVE $98,000 in my bank’s “deeming account”. It is deemed by Centrelink to be earning 3.25 per cent interest, but the reality is much less. I’m reluctant to change banks. How often does the government adjust the deeming rate?
A. YOUR numbers aren’t quite right. For a single the first $51,200 is deemed at 1.75 per cent; for a couple the 1.75 per cent cut-off is $85,000. Talk to your bank to try and get a better deal. Deeming rates are adjusted in line with interest rates.
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. Personal replies will not be given.
