This can benefit people who:
- are receiving a social security payment and residing in aged care, who have a grandfathered account based pension
- May increase entitlement to pensions or allowances under the income test
- May reduce aged care fees due to reduction in assessable income
Things to be aware of:
- person requiring amounts exceeding the minimum have a choice between making commutations or increasing pension payments. Need to compare:
- Commutations: not included in assessable income however cause permanent reduction in deductible amount
- Increasing pension payments: included in assessable income, however timing increased payments towards end of financial year, minimises amount assessable. Important to provide a new Centrelink schedule for the following financial year ASAP
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Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.