What retirees need to know about Centrelink’s income and asset tests
Question 1: Which super fund reports where international equity funds are invested?
Late last year, the federal government passed legislation require all super funds to disclose the investments they hold for each asset class.
The rules are designed to provide transparency to pension fund members by requiring funds to take a “snapshot” of each of their investment options as of June 30 and December 31 of each year.
This information must be made available on a publicly accessible part of a fund’s website within 90 days.
So, in short, you should be able to see international holdings for all super funds. (Although the format of this disclosure can sometimes be confusing for the average member).
For example, to see the holdings of one of the largest super funds AustralianSuper, you can visit their ‘what we invest in page.
Question 2: Hello, thank you for your column. Most appreciated. My wife and I will soon be selling our house to make an apartment. Are we able to put money from the sale into our AustralianSuper accounts? I have about $650,000 in my account and she has about $550,000. We both draw pensions from our accounts.
Yes, you may have multiple options to contribute to your super in this scenario.
First, you can make a nonconcessional (after-tax) contribution of up to $330,000 each if you’re under age 67. If you are 67 or older, you can contribute $110,000 if you pass the “work test”.
However, starting July 1, 2022, you can make a nonconcessional contribution of $330,000 as long as you are under age 75. No work criteria will have to be met.
Second, you can use downsizer contribution rules. You can use this type of contribution to make a contribution of $300,000 each. This can replace or be added to the non-concessional contribution mentioned above.
To be eligible for this contribution, you must be 65 years of age or older and have owned your residence for 10 years or more. But from July 1, it is enough to be 60 or older.
There are others eligibility criteria, including time limits governing when these types of contributions must be made. You should therefore speak to your super fund or a financial adviser to find out more.
Finally, you will need to pay all of the above contributions into your super’s accumulation account, not directly into your pension account. Once the contributions have been made, you can pool the funds.
Question 3: My husband and I have less than $460,000 in super. We are 77 years old and plan to invest the super money in a small investment unit. Are we going to lose our partial pension? Thank you, E and L
Services Australia will count the $460,000 as an asset, whether it is a super, an investment property (unit) or a bank account.
Whether or not you own the home, as well as the other assets you have, will then determine your rights to the age pension.
Please see the table below:
Under the income test, however, superannuation is treated differently than investment property – whether in the accumulation or retirement phase.
But before making a decision, you need to consider other factors besides your old age pension, such as the likely income the investment will generate, how easily you can tap into the funds, and the risk of the underlying investments. .
Craig Sankey is a Certified Financial Advisor and Head of Technical Services and Advisory Enablement at Industry Fund Services
Warning: The answers provided are of a general nature and although inspired by the questions asked, they have been prepared without taking into account all of your objectives, your financial situation or your needs.
Before relying on any information, please ensure that you consider the information’s relevance to your objectives, financial situation or needs. To the extent permitted by law, no liability for errors or omissions is accepted by IFS and its representatives.
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