What pensioners should know about Centrelink’s income and asset tests


Question 1: Which super fund declares where international share funds are invested?

Late last year, the federal government passed legislation requiring all super funds to disclose what investments they are holding for each asset class.

The rules are designed to provide transparency to superannuation fund members by requiring the funds take a ‘snapshot’ of each of their investment options as at June 30 and December 31 each year.

That information must be made available on a publicly accessible part of a fund’s website within 90 days thereafter.

So, in short, you should be able to see international shareholdings for all super funds. (Although the format of this disclosure can sometimes be confusing to the average member).

For example, to see the holdings of one of the largest super funds AustralianSuper, you can visit their ‘what we invest in’ page.

Question 2: Hello, thanks for your column. Most appreciated. My wife and I will be selling our house soon to downsize into an apartment. Are we able to put some money from the sale into our AustralianSuper accounts? I have about $650,000 in my account and she has about $550,000. We both draw pensions from our accounts.

Yes, you may have a couple of options in relation to contributing to your super under this scenario.

Firstly, you can make a non-concessional (after-tax) contribution of up to $330,000 each if you are under 67 years of age. If you are 67 or over you can contribute $110,000 if you meet the ‘work test’.

However, from July 1, 2022 onwards, you will be able to make a non-concessional contribution of $330,000 so long as you are under age 75. No work test will need to be met.

Secondly, you can use the downsizer contribution rules. You can use this contribution type to make a $300,000 contribution each. This can be instead of, or in addition to, the non-concessional contribution mentioned above.

To be eligible to make this contribution, you need to be 65 or over and have owned your residence for 10 years or more. But from July 1 you only need to be 60 or over.

There are other eligibility criteria, including time frames governing when these types of contributions need to be made. So you should speak to your super fund or a financial adviser to find out more.

Finally, you will need to make all of the above contributions into the accumulation account of your super, not directly into your pension account. After the contributions are made, you can combine the funds.

Question 3: My husband and I have less than $460,000 in super. We are 77 years old and thinking of investing the super money in a small investment unit. Will we lose our part pension? Thanks, E and L

Services Australia will count the $460,000 as an asset whether it is in super, in an investment property (unit), or in a bank account.

Whether you are a home owner or non-home owner, plus what other assets you have, will then determine your age pension entitlements.

Please see the table below:

Under the income test, however, superannuation does get treated differently to an investment property – whether it is in the accumulation or pension phase.

But before making a decision, you should consider other factors besides your age pension, such as the likely income generated from the investment, how easily you can draw down on the funds, and how risky the underlying investments are.

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. 

The New Daily is owned by Industry Super Holdings

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