With changes to the age pension assets test coming into effect in less than six months, pensioners and those nearing retirement should be checking their assets to ensure they are ready for 1 January 2017.
Unlike the government’s proposed superannuation changes which still need to be approved, the new pension rules already have been legislated.
From 1 January 2017, the threshold at which a homeowner couple will stop receiving a part pension will decrease from $1.18 million to $823,000. For a single homeowner, the threshold will decline from $792,000 to $547,000.
However, the lower threshold will rise from $296,500 to $375,000 for couples and from $209,000 to $250,000 for singles.
For those who will be affected by these changes, now is the time to consider strategies that will lower your assessable assets. For example, if you have plans for an overseas holiday or to purchases a new car, it may be a good idea to bring these plans forward to take place before next January.
However, don’t squander away money you never intended to spend. Other sensible options that can lower a person’s assessable assets include prepaying for a funeral or giving away money to family members. Gifting money to family is limited to $10,000 a year or $30,000 over five years.