Parents getting aged pension

Hi all,

I have a query in regards to parents being able to obtain the part pension.

Say for example they currently are above the asset threshold as a couple and can't qualify for any pension but then say in a years time fall below the asset threshold as a home owning couple when would they be able to qualify for a part pension???

Any ideas???

Cheers

 

When they fall below the asset threshold, assuming they didn't gift funds away in breach of the deprivation rules - but assuming they don't also fail the income test?
Not sure how those numbers are looking at present with deemed income rates.

 

Depends how they get below the threshold - eg if they gift a property/money/car/shares to someone it is subject to an annual limit and may affect them for 5 years, if it's money and they lose it all at the TAB then there's no waiting.

They might be better off shifting the cash or proceeds into super and take it as a super income account to supplement the pension.

 

Yeah I have read about the gifting rules for houses cash etc etc, I was thinking actually of them living and enjoying themselves and spending some of their own money by them doing some Reno's around the house a few day trips and travel when covid eases up etc etc and then if they get below the threshold hopefully they could be eligible for a tiny part pension.

 

As soon as their assets fall under the threshold they should qualify. They could do this by spending like you said.
I am reading a really good book atm called 'die with zero' which basically encourages people to spend up as you get older rather than reducing expenditure fearing you will run out of money.

 

They need to look at the 'value' of the pension (and associated discounts they might receive) and compare that with the amount being blown to get to that point.

If we're talking spending $20K on little trips & needed work on the house to get $20/week that's fine, but if we're talking $400K to get $20/wk I would be questioning the priorities there. Might be better to buy an annuity (this is from an annuity-averse person)

What is a small part pension actually worth in other benefits, anyone know?

 

@pippen pls try this link to Noel Whittaker’s calculators :

Deeming Calculator | Noel Whittaker

there’s also one on pension calculator too and few others

 

They will be assessed on either assets or income whichever is the lowest

Age Pension Calculator | Noel Whittaker

 

Thanks @Anne11, I forgot all about Noel! I usually play around with his stock market calculator. The thought didn't even cross my mind. Cheers

 

Fully agree, parents don't want to use their capital but the banks are paying less than 1% interest so they have no debts and live off lets say 20k per year.

I tell them its ok to use the capital as they are pushing late 70's now.

 

Make an appointment with the Centrelink FIS advisor and always “ test your eligibility “

 

Noel’s calculators are the best.

 

I like this one: simple

Retirement Drawdown Calculator | Noel Whittaker

 

Is there any audit on the spending? I know a Russian couple who were 400k over the threshold. They waited a few years 'spending' it aka their mattress got heavier and then gradually said its going and their full pension was eventually reinstated.

 

Yes it is interesting, I think they will have to substantiate depending to make sure no gifts have been given and this is auditing to a degree, but it would be easy to rort.

 

You would of thought that receipts would be necessary etc etc to justify spending for example 150k in say 3 years when previously the couple may only have spent 20k a year.

 

Yeah it's interesting...but as per Terry's post about, looks easy to rort.

 

The same applies to pulling out all of your super on day 1 of retirement and blowing the lot on OS travel (in your dreams), wine & partying then applying for the pension on day 3 (you had a hangover on day 2 and spent it in bed).

 

• Depends on how avaricious you are. Spend $316.80 pa on PBS contribution (at $6.60 per script) and the remaining pharmaceuticals are at no cost to you but if you really need 48 scripts or more pa to keep you alive, well....
• Medicare Safety net of about $700 pa after which you get 80% of out of pocket Medicare rebate with variations.
• Free vaccinations and cancer screening. Lots of joy there.
• Free medication review if on more than 5 medications a day (See PBS contribution).
• Reduced car registration by maybe 10% and public transport costs.
• Plus other relatively small stuff.

I reckon you'd be pushing it for a couple of thousand for most people.

 

Isn't that legal?