My de facto partner and I are retired and each draw a pension from our separate super funds.
asserted
partner → retire → funds
Our wills are up-to-date, and we both have binding death benefit nominations directing our super to the surviving partner.
asserted
we → have → partner
We travel frequently and wonder what would happen if we died at the same time.
asserted
we → travel → time
Would our superannuation death benefits automatically form part of our respective estates and be distributed under our wills, or do we need to make additional arrangements to ensure this happens?
asserted
this → form → arrangements
We have asked both our financial adviser and super fund but have been unable to get a clear answer.
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We → ask → answer
Ideally, you should seek advice from your estate planning lawyer.
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you → seek → lawyer
Superannuation expert Leigh Mansell of Heffron says the succession rules in your state may determine who is considered to have died first when the actual order is unclear – for example, after an accident.
uncertain
order → say → accident
If those rules apply, one spouse will be treated as having died first.
asserted
spouse → apply → ?
I refer to that person below as Spouse 1.
asserted
I → refer → Spouse
For Spouse 1, first check whether their fund’s deed or binding death benefit nomination requires Spouse 2 to survive Spouse 1 for a specified period, or be alive when the death benefits are paid.
asserted
benefits → check → period
If neither requirement applies, Spouse 1’s death benefits may be paid to Spouse 2, with Spouse 2’s executor stepping into their shoes.
uncertain
executor → apply → shoes
Superannuation law permits this because Spouse 2 was an SIS dependant of Spouse 1 when Spouse 1 died.
asserted
Spouse → permit → Spouse
Spouse 2 was also a tax dependant of Spouse 1 when Spouse 1 died.
asserted
Spouse → die → Spouse
However, the concessional tax treatment applies only if Spouse 2 could reasonably be expected to benefit from Spouse 1’s death benefit.
uncertain
Spouse → apply → benefit
If Spouse 2 died before the benefit is paid, they cannot benefit from it.
asserted
they → die → it
The tax concessions would therefore not apply, and the benefit would be taxed as though it had been paid to a non-tax dependant.
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it → apply → dependant
You wrote about a man with $900,000 in super who receives a part age pension and can earn $85,000 a year.
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who → write → 85,000
I’m 71 in a relationship, have about $800,000 in super and a casual job earning about $10,000 annually.
asserted
I → ’m → 10,000
From using the Centrelink calculators, I assumed I would not qualify for even a part pension.
asserted
I → use → pension
Is there something I’m missing, and should I see a financial adviser about structuring my affairs differently?
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I → miss → affairs
When you apply for the age pension, you are tested under both the assets test and the income test.
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you → apply → test
The one that gives you the lower pension is the one Centrelink uses.
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Centrelink → give → pension
Because the two tests are way out of kilter, a person with substantial assets can also earn a substantial income without their pension being affected.
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pension → earn → income
Your super would be given a deemed income of $1069 a fortnight, while wages of $10,000 a year would be about $385 a fortnight.
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wages → give → 10,000
The Work Bonus disregards the first $300 of your fortnightly employment income, which gives you a total assessable income of $1154 a fortnight.
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which → disregard → 1154
This would entitle you to a pension of $743.65 a fortnight under the income test, compared with $481.50 a fortnight under the assets test.
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This → entitle → test
Therefore, the assets test would apply.
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test → apply → ?
In fact, you could have total assessable income of around $2200 a fortnight and still receive the same pension because the assets test would continue to be the one that determines how much pension you receive.
uncertain
you → have → pension
I am 70, receive the full age pension and intend to sell my home in Brisbane and move to the bush for some peace and quiet.
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I → receive → peace
I have found several suitable properties within my price range, but many are on more than five acres.
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many → find → acres
My understanding is that Centrelink may assess land above a certain area separately from the home.
uncertain
Centrelink → assess → home
How can I buy a larger acreage property without reducing or losing my age pension?
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I → buy → pension
Regan Welburn of My Pension Manager says Centrelink generally exempts your home and the surrounding five acres from the assets test.
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Centrelink → say → test
If you buy a larger property, the value of the land above five acres will normally be assessable.
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value → buy → acres
It would therefore be prudent to obtain valuations for the house and exempt five acres, and for the entire property.
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It → obtain → property
In many cases, most of the value will be in the house and surrounding land, so the additional acreage may not have a major effect.
uncertain
acreage → surround → effect
Above these levels, the pension reduces by $3 a fortnight for every $1000 of additional assets.
asserted
pension → reduce → assets
The pension cuts out at $745,750 for singles and $1,121,000 for couples.
asserted
pension → cut → couples
So a tree change may well be possible without losing your pension.
uncertain
change → lose → pension
If your pension is reduced, another option is Centrelink’s Home Equity Access Scheme, which allows eligible retirees to supplement their income by borrowing against their home.
asserted
retirees → reduce → home
…and 12 more, not listed.
The Aporia
