- Question 1(a) Does your superannuation balance affect your ability to get the age pension? Does the overall balance or the income received from that balance count as an asset when applying for the pension? How much can I have in super before the pension is not attainable?
- Question 1(b): I am 63 years old and my wife is 56 years old and we earn around $140k per year. We have our own home valued at $600k and an investment property at $450k. Currently, our combined super is $350k. How much would we receive from the government pension, if I was to retire?
I will answer the above two age pension questions together.
Once you attain age pension age your super balance counts towards the age pension asset test.
Under the income test, whether the funds or in super or you have started a pension with them, they are ‘deemed’ to earn a set return, and this amount is then counted, regardless of actual return or income received.
As at April 2023, you can have the following amounts and receive a full or part age pension:
Below are examples of the level of annual age pension that would be payable for a given level of assessable assets, provided the income test does not apply, assuming you are a home owner, is as follows:
The age pension age has been gradually increased to 67. Anyone born before January 1, 1954 is already age pension age. For people born after January 1, 1954 the following applies:
- Question 2: I am 57 years old and looking to maximise my super without realising capital gains. I have $550,000 in my Hostplus super and $200,000 in LICs and ETFs outside of super with capital gains attached. Can I transfer the LICs and ETFs directly into my super without cashing them in and realising the capital gain. Hostplus has a DIY component where you can choose your own investments within the fund, which includes my LICs and ETFs?
Hostplus does have a very extensive investment menu, as do some other super funds, that include the option of investing directly in shares, exchange traded funds, listed investment companies on top of their regular investment options, i.e. Balanced, Conservative etc.
The issue here is that the investments are in your name currently but to get them into super will mean they are in the super fund’s name, in trust for yourself. This means there is a change of beneficial ownership, which triggers a capital gain event.
Therefore, you will have to weigh up whether to trigger the gain now to get funds into super, or at a later time.
You may be able to manage some of the gains by making personal tax-deductible contributions to super up to your concessional cap. However, as you have a balance over $500,000 unfortunately you cannot utilise the carry forward provisions.
I suggest seeking personalised financial advice.
- Question 3: I live and work abroad for now. I rent my home in Australia at present and this past financial year, I earned $1950 in rent, expenses were $303.80. Do I need to lodge a tax return? The E-Tax will not permit me to do so as I am an overseas Aussie for taxation purposes. I will move back home next year. Thank you.
Are you clear on whether you are a non-resident for Australian taxation purposes?
I assume you have a tax file number, therefore the ATO will be expecting something from you. Either a tax return or a ‘return not necessary’ form.
As you have earned an income from rent in Australia (even if it is minimal), and no tax was withheld, you are required to lodge a return.
If E-tax does not let you, then I suggest contacting the ATO directly to see how this can be lodged or consider receiving specific taxation advice.
Craig Sankey is a licensed financial adviser and head of Technical Services & Advice Enablement at Industry Fund Services
Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.
Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.
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