Question 1: I receive a partial pension based on income. My husband works full time and I have income from investment property. If my husband’s income goes up, my pension goes down. What happens if I notify Centrelink that the tenants have left and I have no rental income?
Centrelink has an income and asset test, and it applies any test that results in lower retirement payments.
Your investment property will be subject to the asset test whether or not it is leased.
However, if you have a loan on the investment property, Centrelink will deduct it from the value of the property – that is, they will use the equity in your asset, but only if the loan is secured by investment property.
For example, if your investment property is worth $ 500,000 and the loan is worth $ 200,000, then Centrelink will count $ 300,000 as part of the asset test.
However, if the loan for your investment is secured by your primary residence, you cannot deduct the loan from the value of the investment property.
If the loan is secured by both properties, Centrelink will deduct a portion of the loan from the appraised value.
As part of the income test, if you do not receive any rent, you should immediately notify Centrelink as it will not assess any income against the investment property under the income test.
Depending on your overall situation and other assets, you can switch from an income test to an asset test.
In any case, it looks like you can benefit from an increase in your pension and you should inform Centrelink of your current situation.
Question 2: Hello, I have just arrived in Australia from New Zealand. It took me a while to settle down. I want to make the maximum contribution to my retirement pension during this fiscal year to get the maximum tax benefits. Question: What is my maximum amount? Could this be based on when I arrived in Australia or when I found a job? Thank you
The pension contribution limits are based on a financial year, regardless of the length of your stay in the country or the length of your work.
For fiscal year 2021-2022, the concessional limit (tax deductible) is $ 27,500.
This ceiling includes employer contributions, wage sacrifice contributions and personal contributions for which you are requesting a tax deduction.
In addition to that, you can also potentially use “deferred” contributions. Carry-over agreements involve access to unused concessional ceilings from previous years. People accumulate an unused amount of concessional contributions when they make less than the authorized amount in a fiscal year.
Even if you weren’t in Australia in previous years, you can still use this rule. I have already detailed how this strategy might work.
I suggest creating a MyGov account and linking it to the ATO online service. This way you can track your concessional contributions and how much you can contribute without going over your cap.
A number of super funds in the industry offer super contribution advice at no additional cost, so it may be worth contacting your fund to see if they can help you determine an appropriate contribution level.
Question 3: My daughter is an Australian citizen who works in Singapore. Can she make (voluntary) contributions to an Australian pension fund?
The short answer is yes.
Anyone under the age of 67 can make a voluntary contribution to super, whether or not they are in Australia. However, you must ensure that the TFN is registered on the account.
Your daughter’s living conditions will also have no effect on when she can access her super. The same access rules will apply whether or not she lives abroad.
If your daughter was considering making pre-tax or tax-deductible contributions, she should get specific tax advice as it can be very complex.
Craig Sankey is a Chartered Financial Advisor and Head of Technical Services and Advisory Activation at Industry Fund Services
Disclaimer: The answers provided are general in nature and while motivated by the questions asked, they have been prepared without considering all of your goals, financial situation or needs.
Before relying on any information, please ensure that you consider the relevance of the information to your goals, financial situation or needs. As far as permitted by law, no liability for errors or omissions is accepted by IFS and its representatives.
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