Super always trumps cash in retirement savings
I have a pension based on an account with Hostplus, but I don’t need to draw on it because I have other sources of income. However, I am aware that a minimum amount must be taken out of the super each exercise. I am 71 years old, so this amount represents for me 3% of the super balance this year. I had scheduled my annual minimum withdrawal – $ 19,000 – for the next month because I wanted to leave the funds in the account for as long as possible. Last month I was in urgent need of additional funds so I made a one-time withdrawal of $ 20,000 from the Hostplus account. I then tried to cancel the annual withdrawal scheduled for next month, because I don’t need it, and I thought I had already exceeded the minimum withdrawal amount provided by law. However, when I tried to do so, Hostplus told me that it was not possible – I still had to make the annual minimum withdrawal. They told me that there are two different processes and that only planned withdrawals are included in the legislated annual tally. Is it correct? I would have thought it didn’t matter how you withdraw the money, as long as you withdraw the minimum amount and comply with the law.
Your fund has a real-time obligation to report the withdrawal of super benefits to the Australian Taxation Office (ATO). The purpose is to allow them to follow the balance cap and it is essential for them to know at the time of withdrawal whether a payment is a lump sum or a pension payment. Unfortunately, this means that he has already been notified to the ATO.
My parent has a level 4 home care program and receives full board. Suppose he starts receiving income and puts it into his plan to get additional service. Would this affect his old age pension?
Rachel Lane, director of Aged Care Guru, says the income he earns would be assessed to calculate his pension and the amount he needs to contribute to his home care program through the income-based care fee .
As a full pensioner, no income-based child care costs are payable and there is a level of income that he can earn before his pension drops. As a single person, this amount is $ 178 per fortnight.
Income-dependent childcare costs are calculated using her pension plus other income. If this amount is less than $ 28,049 per year, he would not pay income-based child care expenses. If he earns more than this amount, the income-based fee will be charged at 50 cents per dollar above the threshold.
It is important to know that not all income is real income. The most common form of income for pensions and income-based fees is what’s called deemed income – what Centrelink says you should earn on your investments, regardless of the actual income they produce.
The current deemed rates are 0.25% on the first $ 53,000 of investments and 2.25% on any amount above. If he earns more than the estimated rates of his funds, it will not affect his pension or income-based care costs.