Post by Banjo on Oct 23, 2016 7:19:36 GMT 7
Questions: reporting variable income and inheritances to Centrelink
I have a problem and Centrelink and my federal MP have sent me around in circles. I am 74 and currently retired but I do six to 10 hours a fortnight driving buses doing a sports charter. On every second Monday I have to report my earnings to Centrelink so they can work out our age pension. My hours are not set each week but vary. When I phone the Centrelink line they state I have to quote my earnings exactly before tax. This is impossible because, in the Bus and Coach award, the Bus Award is state and the Coach Award is federal, with different rates of pay. If I drive a bus with an M/O Number Plate I get about $31 per hour. If I do exactly the same job, but the bus has a TV (Tourist Vehicle) number plate, I only get $26 per hour. There are also times when my employer will pay me the Bus Award when driving a TV plate because his tender was not so tight. I asked Centrelink why I can't phone them when I get my pay docket and quote to the cent. They said this was a government matter and to contact my MP. My MP sent me back to Centrelink. What do you suggest? R.C.
For other readers, age pensioners must report varying employment earnings income to Centrelink every fortnight. The income means test ignores the first $292 a fortnight, that is $7592 a year, for all couples ($164 a fortnight for singles or $4264 a year) and, under the Work Bonus Scheme, also ignores the first $250 a fortnight ($6500 a year) of earned income.
Pensioners with varying earned income must report their income, and their partner's if applicable, for the fortnightly reporting period even if they haven't been paid by their employer.
The amount earned in the reporting period may be different, after deductions, to the amount received and to complicate matters, the dates on payslips may not match the reporting period. Centrelink provides an earnings worksheet that allows pensioners to record the hours they work each day and their pay rate per hour, even if this varies. Google "Earnings Worksheet Centrelink" and download it.
In your case, you may not know in advance what rate your employer will pay you. I understand you may be able to synchronise your Centrelink reporting period with your payslip period and that may be the way to go. Call Centrelink again!
I am 75, live alone and receive a full pension payment each fortnight. I own my house and have limited savings. I am due to receive an inheritance of about $480,000. I was hoping to do house renovations and some asset procurements, which will result in spending about $50,000. How much am I able to spend and/or gift to family/friends to ensure I still receive some pension even if this is a reduced pension? Because this is an inheritance to me, do the normal gifting rules apply? From a financial perspective what are the benefits/disadvantages to maintain some pension and invest the rest of the inheritance or invest the inheritance and lose the pension? A.N.
You need to report your inheritance to Centrelink within 14 days. It will be counted by the assets test and, if kept in cash or shares etc, the interest earned will be subject to deeming by the income test.
You can spend as much as you like on your house and it is a good idea to keep it in as good a condition as possible since, if you fall ill at an advanced age, you will need to sell it to enter an aged care facility.
The normal gifting rules apply, that is you can gift up to $10,000 in any one financial year (the $10,000 rule) but no more than $30,000 (the $30,000 rule) over five consecutive years.
If you currently have, say, $20,000 in savings, and spend and gift $60,000, the remaining $440,000 will allow you a part age pension of some $530 a fortnight. This will drop to around $307 a fortnight after January 1 when the new assets test comes in. You can top this up with interest and capital from savings and, as these run down, your pension will increase.
One of the great sorrows of our time is that people with savings cannot earn a decent rate of interest on their money.
I am 65 in November and will probably retire in August 2017, when my wife will retire at 60 years old. I will retire with about $570,000 in First State Super. My wife has $580,000 in SASS super, and is not entitled to an age pension until she is 67. We currently live in country NSW with our home valued at about $360,000, and would like to retire to the coast, but even after downsizing our house, we would be looking at paying about $660,000. I am looking at paying the extra $300,000 for the coastal property from my super for two reasons. 1. Ensuring my wife's super lasts longer. 2. Bringing my super down to the $209,000 limit for the age pension. If the new house is in both names would this have any effect on these plans? If we stay in the country for a few more years when I apply for the pension and it is assessed on this house and my super amount (which will be in an allocated pension then), can I be reassessed for the pension again when we move to the coast, buy the $660,000 property and have less in my allocated pensions? M.M.
Yes, you can request a new income and assets test whenever your situation changes. When you apply for a pension, your income and assets will be subject to thresholds as a couple, not as a single, and you will receive half of any resulting married pension.
From January 1, 2017, the assets test will have an upper threshold, at which the pension cuts out, of $816,000 for homeowner couples ($542,500 for singles) and will ignore your wife's super until she reaches age pension age of 67. It will still ignore the house. The upper level will move higher on March 20 when the pension is again indexed.
If you have a question for George Cochrane, send it to Sunday Money, PO Box 3001, Tamarama, NSW, 2026. Helplines: Financial Ombudsman, 1300 780 808; Centrelink pensions, 13 23 00.
www.theage.com.au/money/ask-an-expert/your-questions-reporting-variable-income-and-inheritances-to-centrelink-20161018-gs4vwu.html
I have a problem and Centrelink and my federal MP have sent me around in circles. I am 74 and currently retired but I do six to 10 hours a fortnight driving buses doing a sports charter. On every second Monday I have to report my earnings to Centrelink so they can work out our age pension. My hours are not set each week but vary. When I phone the Centrelink line they state I have to quote my earnings exactly before tax. This is impossible because, in the Bus and Coach award, the Bus Award is state and the Coach Award is federal, with different rates of pay. If I drive a bus with an M/O Number Plate I get about $31 per hour. If I do exactly the same job, but the bus has a TV (Tourist Vehicle) number plate, I only get $26 per hour. There are also times when my employer will pay me the Bus Award when driving a TV plate because his tender was not so tight. I asked Centrelink why I can't phone them when I get my pay docket and quote to the cent. They said this was a government matter and to contact my MP. My MP sent me back to Centrelink. What do you suggest? R.C.
For other readers, age pensioners must report varying employment earnings income to Centrelink every fortnight. The income means test ignores the first $292 a fortnight, that is $7592 a year, for all couples ($164 a fortnight for singles or $4264 a year) and, under the Work Bonus Scheme, also ignores the first $250 a fortnight ($6500 a year) of earned income.
Pensioners with varying earned income must report their income, and their partner's if applicable, for the fortnightly reporting period even if they haven't been paid by their employer.
The amount earned in the reporting period may be different, after deductions, to the amount received and to complicate matters, the dates on payslips may not match the reporting period. Centrelink provides an earnings worksheet that allows pensioners to record the hours they work each day and their pay rate per hour, even if this varies. Google "Earnings Worksheet Centrelink" and download it.
In your case, you may not know in advance what rate your employer will pay you. I understand you may be able to synchronise your Centrelink reporting period with your payslip period and that may be the way to go. Call Centrelink again!
I am 75, live alone and receive a full pension payment each fortnight. I own my house and have limited savings. I am due to receive an inheritance of about $480,000. I was hoping to do house renovations and some asset procurements, which will result in spending about $50,000. How much am I able to spend and/or gift to family/friends to ensure I still receive some pension even if this is a reduced pension? Because this is an inheritance to me, do the normal gifting rules apply? From a financial perspective what are the benefits/disadvantages to maintain some pension and invest the rest of the inheritance or invest the inheritance and lose the pension? A.N.
You need to report your inheritance to Centrelink within 14 days. It will be counted by the assets test and, if kept in cash or shares etc, the interest earned will be subject to deeming by the income test.
You can spend as much as you like on your house and it is a good idea to keep it in as good a condition as possible since, if you fall ill at an advanced age, you will need to sell it to enter an aged care facility.
The normal gifting rules apply, that is you can gift up to $10,000 in any one financial year (the $10,000 rule) but no more than $30,000 (the $30,000 rule) over five consecutive years.
If you currently have, say, $20,000 in savings, and spend and gift $60,000, the remaining $440,000 will allow you a part age pension of some $530 a fortnight. This will drop to around $307 a fortnight after January 1 when the new assets test comes in. You can top this up with interest and capital from savings and, as these run down, your pension will increase.
One of the great sorrows of our time is that people with savings cannot earn a decent rate of interest on their money.
I am 65 in November and will probably retire in August 2017, when my wife will retire at 60 years old. I will retire with about $570,000 in First State Super. My wife has $580,000 in SASS super, and is not entitled to an age pension until she is 67. We currently live in country NSW with our home valued at about $360,000, and would like to retire to the coast, but even after downsizing our house, we would be looking at paying about $660,000. I am looking at paying the extra $300,000 for the coastal property from my super for two reasons. 1. Ensuring my wife's super lasts longer. 2. Bringing my super down to the $209,000 limit for the age pension. If the new house is in both names would this have any effect on these plans? If we stay in the country for a few more years when I apply for the pension and it is assessed on this house and my super amount (which will be in an allocated pension then), can I be reassessed for the pension again when we move to the coast, buy the $660,000 property and have less in my allocated pensions? M.M.
Yes, you can request a new income and assets test whenever your situation changes. When you apply for a pension, your income and assets will be subject to thresholds as a couple, not as a single, and you will receive half of any resulting married pension.
From January 1, 2017, the assets test will have an upper threshold, at which the pension cuts out, of $816,000 for homeowner couples ($542,500 for singles) and will ignore your wife's super until she reaches age pension age of 67. It will still ignore the house. The upper level will move higher on March 20 when the pension is again indexed.
If you have a question for George Cochrane, send it to Sunday Money, PO Box 3001, Tamarama, NSW, 2026. Helplines: Financial Ombudsman, 1300 780 808; Centrelink pensions, 13 23 00.
www.theage.com.au/money/ask-an-expert/your-questions-reporting-variable-income-and-inheritances-to-centrelink-20161018-gs4vwu.html
