Received this email from Centrelink today: From 1 January 2015, the deeming rules that apply to financial investments will be extended to account-based income stream products. This means that all financial assets will be assessed under the same rules.
The deeming rules assume your financial assets are earning a certain amount of income, regardless of the income they actually earn. If you earn more than these rates, the extra income is not assessed. Deeming encourages you to earn more income from your investments and reduces the extent to which your payments may vary.
What this means for you?The following changes will apply from 1 January 2015.
- If you are a Low Income Health Care Card holder, we will use the deemed income from your superannuation account-based income stream product to assess your entitlement.
- If you are a self-funded retiree and receive aged care, we will use the deemed income from your superannuation account-based income stream product to assess your aged care fees.
- If you receive an income support payment, the superannuation account-based income stream products you hold before 1 January 2015 will continue to be assessed under the existing rules.
- If you stop receiving income support payments, your superannuation account-based income stream product may be reassessed using the deeming rules if you receive income support payments again in the future.
- If you change products or buy a new superannuation account-based income stream product from 1 January 2015, we will assess it using the deeming rules.
- If your partner holds a superannuation account-based income stream product and they are not receiving income support payments, the deeming rules will apply to their product and be used when calculating your entitlement. This may affect your payments or your aged care fees.
What you need to do.You need to tell us of changes to your financial situation. While you do not need to do anything else at this time, you may wish to get advice from your financial planner about these changes.
More information For more information about these changes, please go to the Australian Government Department of Human Services website and search for 'account-based income streams' or call us on 132 468 (call charges may apply).
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Deeming rules - Current http://ift.tt/1wGaF4LThe deeming rules assume your financial assets are earning a certain amount of income, regardless of the income they actually earn. Deeming encourages you to earn more income from your investments and reduces the extent that your payments may vary.
Deeming is used to calculate income for pension, benefit and allowance payments. As Family Tax Benefit is based on taxable income, it is not affected by deeming.
From 1 July 2014:
• if you are single and getting either a pension or allowance, the first $48,000 of your financial investments is deemed to earn income at 2% per annum and any amount over that is deemed to earn income at 3.5% per annum
• if you are a member of a couple:
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http://ift.tt/1wGaFSgIncome test for Low Income Health Care Card - CURRENTYour Low Income Health Care Card is assessed on gross income for the 8 week period ending on the day you lodge your claim. Your income must be below the limit that applies to you. This limit varies depending on whether you are single or partnered or have dependants.
Qualifying
To qualify for a Low Income Health Care Card your income must be below the limit that applies to you for the 8 week period ending on the day you lodge your claim.
________________________ Weekly 8 Week
Status___________________
income IncomeSingle, no children _________ $519 $4,152
Couple combined, no children $899 $7,192
Single, one dependent child__ $899 $7,192
For each additional child, add_ $34 $272
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http://ift.tt/1wGaF4N
Budget 2014-15: Commonwealth Seniors Health Card – include untaxed superannuation income in the eligibility assessmentDescription of the measure
From 1 January 2015, non-taxable superannuation income will be included in the Commonwealth Seniors Health Card (CSHC) income test. This means that from 1 January 2015, superannuation account based income streams will be deemed under the existing deeming rules for the Age Pension.
From 1 January 2015 this will affect
all new CSHC holders. Who will be affected by this measure?
This measure will affect new CSHC holders who are granted on or after 1 January 2015.Customers who are existing CSHC holders as at 1 January 2015 will not be subject to deeming of existing superannuation account based income streams.However, existing CSHC holders who purchase a new product on or after 1 January 2015 will be subject to superannuation deeming arrangements on that product.
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My interpretation of above is if do not have Commonwealth Seniors Care Card and will be 65+ by December 31, 2014; you should apply for your Commonwealth Seniors Care Card when you reach 65 and latest before December 31 2014.http://ift.tt/1wGaFSiIncome test for the Commonwealth Seniors Health Card current rulesThe Commonwealth Seniors Health Card is subject to an adjusted taxable income test. There is no assets test.
You should have an annual adjusted taxable income of less than:
$50,000 (singles)
$80,000 (couples, combined), or
$100,000 (couples, combined, for couples separated by illness or respite care, or where one partner is in prison)
The adjusted taxable income limit is increased by $639.60 for each dependent child you care for
THE MAJORITY OF US SHOULD BE ABLE TO GET Commonwealth Seniors Health Card!!!!!!!!Deemed income of $50,000 for single super fund limit @ 3.5% would total $1,428,500
Deemed income of $80,000 for couples super fund limit @ 3.5% would total $2,285,700
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PLEASE DO YOU OWN RESEARCH AS I AM NOT A FINANCIAL ADVISOR
