|
|
Post by bobm on Mar 22, 2016 10:02:43 GMT 7
Hi everyone. I'm single and retired in Thailand on DSP. I'm fortunate to have full portability as I'm grandfathered under old rules, as I was outside Oz when policy changes came in. I do not receive a full pension as I didn't have the required number of working years in Oz. So I receive 82% pension. I'm 68 years old but still on DSP, as when I reached the age for age pension I was sent forms from Centrelink and was in contact with them, and was told there wasn't any benefit to change from one pension to the other, so I chose to leave things as there were.
I own a one-bedroom flat in Perth, currently valued at approx $250,000. I rent out the flat via a property manager and currently receive weekly rent of $265. This is declared to Centrelink as income and my pension is reduced accordingly. I have no other income other than my part pension and the rent from my flat. I have no other assets and my Oz bank balance is never more than $3,000.
So that's my situation.
Now here's my question. My mother had just died and I've heard from my family that in a few weeks time I'll be inheriting $100,000. Normally I'd be over the moon about receiving $100K but I'm a bit worried is this going to stuff up things with my pension?
|
|
|
|
Post by jimmy55x on Mar 22, 2016 11:21:43 GMT 7
|
|
|
|
Post by scallywag on Mar 22, 2016 11:31:55 GMT 7
But it will be considered an asset,,,,until you spend it. |
|
|
|
Post by bobm on Mar 22, 2016 12:27:40 GMT 7
Thanks for the replies guys. Yes, I've looked at that Human Services page on lump sums/inheritances. But it will be considered an asset, so how much am I allowed in assets? Also while this sum of money is in an Aussie bank the interest is considered income, so can anyone give me a rough idea of how that will effect my Centrelink payments?
|
|
|
|
Post by scallywag on Mar 22, 2016 12:47:54 GMT 7
Thanks for the replies guys. Yes, I've looked at that Human Services page on lump sums/inheritances. But it will be considered an asset, so how much am I allowed in assets? Also while this sum of money is in an Aussie bank the interest is considered income, so can anyone give me a rough idea of how that will effect my Centrelink payments? |
|
|
|
Post by Banjo on Mar 22, 2016 14:17:36 GMT 7
Sure, it depends on the interest you receive.
|
|
|
|
Post by bobm on Mar 22, 2016 14:28:49 GMT 7
Thanks for that link scallywag. So my Perth flat is not considered part of my assets? And as a single part-pensioner homeowner I'm allowed to have less than $783,500, so my $100,000 in a bank will be way under. So I don't have any problems? I will however, fall under deeming and will have some of my pension reduced a bit:
"if you're single and receive an income support payment, the first $48,600 of your financial investments is deemed to earn income at 1.75% per annum and any amount over that is deemed to earn income at 3.25% per annum"
Do I understand the situation correctly or am I missing something? And what about new policy changes coming in at the start of 2017? Will anything effect me, or does my grandfather status keep me safe?
|
|
|
|
Post by bobm on Mar 22, 2016 14:31:01 GMT 7
Banjo could you please expand a bit on this "Sure, it depends on the interest you receive."
I really want to get a clear understanding of this whole situation so I play my cards right from the start.
|
|
|
|
Post by scallywag on Mar 22, 2016 16:11:32 GMT 7
I think,, $100k in a bank is an asset, that $100k will attract interest and that will be assessed as income. You should be able to figure it out or at least familiarise yourself with how it works and then seek advice.
|
|
|
|
Post by Banjo on Mar 22, 2016 16:12:24 GMT 7
Sorry, I meant that if you invested the money, or even left it in the bank, then on top of what you already earn you would lose 50 cents in the dollar pension.
|
|
|
|
Post by bobm on Mar 22, 2016 16:24:53 GMT 7
I think,, $100k in a bank is an asset, that $100k will attract interest and that will be assessed as income. You should be able to figure it out or at least familiarise yourself with how it works and then seek advice. scallywag, I am trying to figure it out, and familiarize myself with how it works, and seek advice. As much as I welcome an inheritance of $100,000K I don't want it to stuff things up for me. You mentioned earlier "until I spend it" so would that be an option, just blow it all and get it out the way. To tell the truth I'm concerned this bloody inheritance is going to upset my situation. I got everything nice and cozy, have portability, receive some additional income from property rental, everything is going well. I'm trying to find out if this inheritance is going to bugger everything up. |
|
|
|
Post by bobm on Mar 22, 2016 16:27:00 GMT 7
Sorry, I meant that if you invested the money, or even left it in the bank, then on top of what you already earn you would lose 50 cents in the dollar pension. So if I have it in a bank I lose 50c in the dollar pension, that means my pension will be reduced by half? Sorry I don't want to appear thick but I'm having difficulty trying to understand this situation. |
|
|
|
Post by Banjo on Mar 22, 2016 17:13:28 GMT 7
|
|
|
|
Post by mikey on Mar 22, 2016 17:36:45 GMT 7
My experience was, money in the bank, told centrelink, they then applied the deeming interest rates, and that was classed as my income. So, since your apparently over the $150 a fortnight amount, whatever the centrelink formula for deeming interest comes to will be added to your income.
As you spend down that $100,000, you need to keep them uptodate, as spending will reduce the amount they calculate income from interest on.
I think you'll be fine and not cross any thresholds to lose your part pension, but you can do the maths and take it from there.
|
|
|
|
Post by bobm on Mar 22, 2016 20:24:10 GMT 7
From my understanding of reading the Centrelink links posted here there's no problem with receiving an inheritance. It's exempt from the income test.
Examples of exempt lump sums:
a one-time gift
an inheritance
The problem only starts when the money is invested or banked and gets assessed as a financial asset.
If you use the lump sum to increase your financial assets, for example, you put it in the bank, loan it, or use it to buy securities or investments, it will be assessed as a financial asset. A notional rate of income will be deemed.
So it's alright to keep the money as cash, not bank it or invest it, just keep it safely as cash and spend it?
|
|
