Here are some tips for retiree Australians (and their families and friends) as we kick-off 2020:
1. If you are turning 66 this year, make a diary note to look closely at an age pension application 12 weeks before the actual birthday. This gives time to address any hiccups well in advance of your first payment being due. You should have some idea of whether you are eligible for the age pension, and the payment should form part of spending plans.
2. If you are turning 66 this year, and think you are not eligible for the Centrelink age pension, make sure you know exactly why, so you can get ready to apply if things change. You may even be wrong.
3. If you are turning 66 this year, and you are not eligible for the Centrelink age pension, then apply for the Commonwealth Seniors Health Card. This card is income tested and could save you more than $2,500 a year on healthcare costs.
4. If you think you were not eligible for the Commonwealth Seniors Health Card, check again. Low income returns on investments and changes in deeming rates mean that your eligibility may have changed. Unlike the Centrelink age pension, you can only apply for this once you reach age pension age. Something to do on your 66th birthday!
5. If you are already receiving a part pension, make sure Centrelink is up to date with the right data. For part pensioners, a change in assets of $1,000 means an extra $78 per year in age pension payments. Check the right value for the car or caravan is in the system, and household contents are realistically valued. These assets are means tested. Your savings may have changed due to a holiday, renovation or medical emergency. Make contact and increase your pension.
6. If you receive an age pension, make sure you are receiving these five entitlements:
– Gas Rebate
– Electricity Rebate
– Water Rebate
– Council Rate Discount
– Driver’s License and Registration Concession
7. If you are applying for the Centrelink age pension, apply for the entitlements above as soon as you receive your Pension Concession Card. (Hopefully on your birthday – because you started application three months beforehand!)
8. If you are in the situation of (6) and (7), keep searching for entitlements, concessions, rebates, programmes or whatever they are called. In my list I have more than 40 and counting. Policies change, governments try and get re-elected, budgets have announcements – it’s a moving feast. Everything from replacement appliances, fishing licenses, pet registration, and stamps.
9. If you are part of a couple, make sure you are registered for the Medicare safety net as a family or couple. This is something most people set up when they first get married but things can change a lot over time. With access to Concessional Medicare Safety Net thresholds as a holder of a Pensioner Concession Card or the Commonwealth Seniors Health Card, this one is a no-brainer.
10. If Christmas with the family has got you thinking about aged care, learn about it before it happens. You will be grateful for some basic knowledge. The Government Aged Care portal, myagedcare.gov.au has good resources to get you started. Look at local aged care providers. What are the costs? Are the assets of your parents organised enough to be called on to fund aged care?
11. If you are trying to work out how your savings are going to last, try the ASIC Moneysmart Retirement Planner. It’s much better than many of the services provided by for-profit companies as it includes age pension eligibility and works this out over time.
12. Check how your spending compares to the ASFA Retirement Standard. This is a great tool for reviewing how your spending in retirement might look if things are going well, or if you have to tighten your belt.
13. If you are in NSW and hold a Commonwealth Seniors Health Card, apply for the Seniors Energy Rebate. If you have already applied, don’t expect to get it again next year. You will have to re-apply.
14. If you are in NSW, hold a Commonwealth Seniors Health Card or receive an age pension, and live in a regional area, get ready for the $250 Regional Seniors Travel Card.
15. If you are 66 or over and still working, don’t assume the Centrelink age pension is irrelevant. For someone with a small amount of savings and a low-income job, there is a potential benefit.
16. Travelling by public transport in NSW? If you want to make the most of government transport help, take a look at the following: Pensioner OPAL Card, Pensioner Travel Vouchers, Country Pensioner Excursion Tickets and Regional Excursion Daily (RED) Tickets.
18. If you own property and need a top up for your day-to-day living expenses, the Pension Loans Scheme may be right for you. The interest rate has dropped to 4.5%. If you are eligible for the Centrelink age pension at $0, maybe you can apply for a loan even if you are a self-funded retiree. This may suit people who may be cashflow poor. People with income streams that prevent them getting the age pension (via the income test) may also apply for a top up. It’s a scheme for everyone.
If you would like further information on any of the above points or are starting to think about your retirement and would like a discussion with Bruce, please contact our office to arrange an appointment.