Australian Aged Pension

[CARLO BALDASSARRE]

Thanxs "heybuz,

                                 Centrelink usually finds out ....

 

[sceadugenga]

In theory you will receive half the combined couples rate.

 

In practice, if your wife has no income or significant assets, you can apply for an exemption and be paid the single rate.

 

Lying to Centrelink about relationships is not a good idea, one day you may want to live in Australia with her and they will ask "who's this? How long has this been going on for?"

 

[BEVUP]

40 minutes ago, sceadugenga said:

In practice, if your wife has no income or significant assets, you can apply for an exemption and be paid the single rate.

Is that even if she has no ties to Auss

& I'm sure the moment you say "wife & son in Thailand ", eyebrows will be raised. Then the old saying comes out " but we plan to settle / retire here" 

[sceadugenga]

Yeah, they don't want you living overseas with some billionaire Hi-So's daughter and getting the pension.

[totally thaied up]

4 hours ago, sceadugenga said:

In practice, if your wife has no income or significant assets, you can apply for an exemption and be paid the single rate.

 

In which you need to be stone broke to get. Under $5000 in total, I was told in cash or assets. If your in that position, even getting the 400K a year in Income for a marriage visa can be a hassle to get. You need to get paid at least $680 a fortnight to get over that hump and most people I know on the marriage side of things only get $652.

 

You really don't want to be in that boat... if in the future Immigration start asking for 'real world figures', with hard evidence of your earnings if you are going down the income route, many Australians may find Thailand with a sinking dollar just too out of reach for them. Lying about your income is a 4-year jail sentence and hiding your Amphur marriage can mean a whole lot of grief.

[sceadugenga]

Incorrect information and responses removed.

 

 

[Nemises]

This recently written (July 2018) 3,500 word article on the AAP for Aussie Expats may interest:

https://www.linkedin.com/pulse/age-pension-ultimate-article-australian-expats-ryan-cullinan-acsi/

[Ryan CUllinan]

Hey crew, 
I wrote the article above. It's a long one... haha. 

Age Pension: The ultimate article for Australian Expats.

 

https://www.linkedin.com/pulse/age-pension-ultimate-article-australian-expats-ryan-cullinan-acsi/

 

 

Every year more Australians are looking overseas to start their retirement in paradise. Whether it be for a lower cost of living, warmer climate or because they enjoy more exotic surroundings. As a financial planner one of the most common topics I get asked about is "am I eligible for the age pension?" and this article should set out to answer all of the important questions.

There will be a few surprising facts and figures in this article, such as the '35 year rule' trumping the '2 year rule' and how your income vs. assets may affect what you're entitled to.

*WARNING* this is a long article, and for a good reason; there are many factors in play here, if you find yourself getting half way through this article and it's not answering the specific question you are looking for, please send me an e-mail directly to [email protected] or simply message me your question to my linkedin profile: https://www.linkedin.com/in/ryancullinan/

Before we get started it's important to note that everyone is different and the laws surrounding your eligibility and potential entitlement are unique and do change. This article was originally written in July 2018. If you have concerns about your pension you can contact the Department of Human Services (Centrelink) HERE.

Contact the Department of Human Services. 132 300 within Australia or the international number: +61 3 6222 3455

[sceadugenga]

What's your opinion of the 2 year wait for portability even for people who have a full Australia Working Life Residency of 35 years or more?

 

[totally thaied up]

So, if I am Ampur married to a Thai and we don't own our own house in Thailand or Australia, we are classified as a couple? That means I can get a full pension if I have under the $594,500 threshold? So say if I 'near broke', but my parents left me 600K after passing on and I was on the pension, my rates would not drop at all from where they are today?

[LosLobo]

1 hour ago, Ryan CUllinan said:

Hey crew, 
I wrote the article above. It's a long one... haha. 

Age Pension: The ultimate article for Australian Expats.

"So lets say for example you are earning $50,000 a year from your superannuation draw down and investment property rental income."

Your super drawn down does not get used for calculating your income …..the total balance of your super is used and then that amount is deemed.

Edited July 19, 2018 by LosLobo

[LosLobo]

1 hour ago, totally thaied up said:

So, if I am Ampur married to a Thai and we don't own our own house in Thailand or Australia, we are classified as a couple? That means I can get a full pension if I have under the $594,500 threshold? So say if I 'near broke', but my parents left me 600K after passing on and I was on the pension, my rates would not drop at all from where they are today?

If you parents left you $600k that money would be deemed and your pension would most likely be paid subject to the income test not the assets test. You would not get a full pension.

 

Unless the money was bitcoin then it would only be classed as an asset!  ?

Edited July 19, 2018 by LosLobo

[watcharacters]

15 minutes ago, LosLobo said:

If you parents left you $600k that money would be deemed and your pension would most likely be paid subject to the income test not the assets test. You would not get a full pension.

 

 

That's just not fair!..

 

[totally thaied up]

13 minutes ago, LosLobo said:

If you parents left you $600k that money would be deemed and your pension would most likely be paid subject to the income test not the assets test. You would not get a full pension.

Yes, I thought that was the case. I just did the calculations and worked it all out. At that level, it works out at $576 a fortnight. For me, later on, it is not worth it. Was thinking of getting the oldies to give the lions share to my sister and keeping on the payment but no, it is not worth it. I live well on what I get a fortnight now and it was just a thought (or brain fart) in motion. Will definitely be no pension later on but will be more than comfortable. This thread has been so helpful.

[4MyEgo]

1 hour ago, totally thaied up said:

So, if I am Ampur married to a Thai and we don't own our own house in Thailand or Australia, we are classified as a couple? That means I can get a full pension if I have under the $594,500 threshold? So say if I 'near broke', but my parents left me 600K after passing on and I was on the pension, my rates would not drop at all from where they are today?

$600,000 in the Australian stock market in bank shares for example would return you about 66,000 baht per annum tax free as a non resident, now as you know shares go up and they go down, so if you don't need $, talk to a broker and collect every month, its a long term investment as I see it, and the capital gains are also tax free for non residence.

 

Better than having the $'s in the bank and if you diversify your portfolio, your returns can me as high as 100,000 baht a month, cha ching ?

 

For me personally, I won't be missing the Aged Pension, the refugees and immigrants with the 4 wife's and 14,000 kids need to eat I suppose 555 

[4MyEgo]

8 minutes ago, watcharacters said:

 

 

Sorry to hear you're not happy.

 

[Ryan CUllinan]

1 hour ago, LosLobo said:

Your super drawn down does not get used for calculating your income …..the total balance of your super is used and then that amount is deemed.

"

What the income test is

We assess your income from all sources. This includes financial assets such as superannuation. To work out how much your financial assets are worth as income, we use deeming.

 

Maybe I was wrong in the article, however the above is directly from the DHS website? 

https://www.humanservices.gov.au/individuals/services/centrelink/age-pension/eligibility-payment-rates/income-test-pensions

 

[Ryan CUllinan]

Unless of course your policy has become insolvent or frozen. In that case you can't access the funds anyway so that's actually in a worse position. 
 

[LosLobo]

42 minutes ago, Ryan CUllinan said:

"

What the income test is

We assess your income from all sources. This includes financial assets such as superannuation. To work out how much your financial assets are worth as income, we use deeming.

 

Maybe I was wrong in the article, however the above is directly from the DHS website? 

https://www.humanservices.gov.au/individuals/services/centrelink/age-pension/eligibility-payment-rates/income-test-pensions

 

Understanding deeming is the crux of determining one's pension entitlement, the addition of this subject including deeming rates would make your article more complete.

 

Edited July 19, 2018 by LosLobo

[Ryan CUllinan]

Thanks LosLobo, 
I deliberately steered away from Asset calculations and deeming and put the phone number for DHS in there as that's where I feel if you are close to the edge then you should really pay someone who is a Dip FA to give you some advice or contact Centrelink directly. 

 

As for using the ASX as a market entry point for the foundation of retirement portfolio at the tail end of a 7-8 year bull market?... That's also something I would advise caution in regards. 
I've met clients who have 7 figure stock portfolio's who still don't have stop loses set on their positions... Absolute lunacy in my mind. 

Even if you take stable high div/low vol favorites like the "big 4" the NAV dipping and then a potential chip into the principle has a compounding negative effect on your policy... 

 

Then again, I am an overly cautious investor/advisor. I suggest 5 buckets (Cash/Bonds-Gold/Fixed Income/Blue Chip/Growth) and ensure you have 2 years of expendible income as cash at all times (for the next market cycle downturn). 

[Ryan CUllinan]

42 minutes ago, LosLobo said:

Understanding deeming is the crux of determining one's pension entitlement, the addition of this subject including deeming rates would make your article more complete.

 

However, I may just go back and make a quick revision mate. I appreciate your input! 

[LosLobo]

7 minutes ago, Ryan CUllinan said:

Thanks LosLobo, 
I deliberately steered away from Asset calculations and deeming and put the phone number for DHS in there as that's where I feel if you are close to the edge then you should really pay someone who is a Dip FA to give you some advice or contact Centrelink directly. 

 

As for using the ASX as a market entry point for the foundation of retirement portfolio at the tail end of a 7-8 year bull market?... That's also something I would advise caution in regards. 
I've met clients who have 7 figure stock portfolio's who still don't have stop loses set on their positions... Absolute lunacy in my mind. 

Even if you take stable high div/low vol favorites like the "big 4" the NAV dipping and then a potential chip into the principle has a compounding negative effect on your policy... 

 

Then again, I am an overly cautious investor/advisor. I suggest 5 buckets (Cash/Bonds-Gold/Fixed Income/Blue Chip/Growth) and ensure you have 2 years of expendible income as cash at all times (for the next market cycle downturn). 

I agree we are now at a 10 year high...…how long can it last!

[4MyEgo]

An interesting input into how the aged pension age increase will affect those waiting as the Australian age pension AAP increases to 70 years of age.

 

Some snippets in bold italics and then the link to the article.

 

We estimate that increasing the pension age by three years to age 70, and lifting the preservation age to 70, would increase total workplace participation rates by an additional 1.4 per cent, increasing economic growth by around $25 billion.

Obviously, reforms would need to be designed to ensure that those over 55 who cannot work due to disability are able to access a pension equivalent to the Age Pension and have unfettered access to their superannuation.

 

My thoughts: For those fortunate enough to save some coin in super, why not take out the threshold amount of $200,000 which is non taxable at preservation age, but 1st confirm with the fund that its non taxable income, i.e. you paid your tax on it on the way in, then pee off to Thailand and then take out the balance when you reach 60, again its non taxable at 60 and over, you should have enough to last you till you reach the AAP age then ship yourself back to "the lucky country", put in your claim, do your 2 year jail term and when you have, pee off to Thailand again with the pension being portable.

 

(Under) the current regime, people can retire at any age after 55 and live on their superannuation and savings until they qualify for the Age Pension. A later pension age would effectively encourage many to work for longer, even if they formally retire before the pension age.

 

Increasing the pension age is yet another example of the rules being broken for working people and the Turnbull Government being out of touch.

At a time when working people are struggling against near-record low wage growth and are already being forced to work longer hours for less pay, the Turnbull Government proposes to force people to work until they’re 70.

 

What the above tells me is that they would love to raise the preservation age to above 55, who knows maybe bring it in line with the AAP age, think about it for a minute, how much would that increase economic growth by, if raising the AAP age by 3 years would generate $25 billion, just my thought on it.

 

I was fortunate enough to have an asset to sell and retire 3 years ago at age 55, also having super which I just took out $200k non taxable having reached preservation age, the balance will come out post 60 as it will be non taxable again, now if I run out of money by the time I reach the AAP age, then I can ship myself back, claim the AAP and do my 2 years, then have it made portable for me to return to Thailand, however as I have mentioned, it's not feasible as it would take 4 years for me to re-coupe initial the outlay, others unfortunately don't have that choice.

 

Do I think I will live to 67-70, they say we are all living longer, I don't know, a lot of mates didn't even make it to 50, so far for me, so good, have never felt so good, money readily available, a great income from a tax free investment, no stress, and they want me to work till I am 67-70, hmmm, you can keep your AAP, I choose life for the remainder of my years.

 

This post isn't meant to throw it in anyone's face, but as the Anonymous saying goes, “Whatever you do today is directly proportional to what will happen to you tomorrow. So sow what you reap.” 

 

https://www.yourlifechoices.com.au/why-we-should-work-until-70--or-not?utm_medium=email&utm_campaign=yourlifechoices retirement affordability index june 2018 2nd send&utm_content=yourlifechoices retirement affordability index june 2018 2nd send+version+a+cid_98e6e53f032ce00f1363bf9c10549510&utm_source=campaign monitor&utm_term=push the age pension age to 70

 

 

 

[moojar]

4 hours ago, 4MyEgo said:

An interesting input into how the aged pension age increase will affect those waiting as the Australian age pension AAP increases to 70 years of age.

 

Some snippets in bold italics and then the link to the article.

 

We estimate that increasing the pension age by three years to age 70, and lifting the preservation age to 70, would increase total workplace participation rates by an additional 1.4 per cent, increasing economic growth by around $25 billion.

Obviously, reforms would need to be designed to ensure that those over 55 who cannot work due to disability are able to access a pension equivalent to the Age Pension and have unfettered access to their superannuation.

 

My thoughts: For those fortunate enough to save some coin in super, why not take out the threshold amount of $200,000 which is non taxable at preservation age, but 1st confirm with the fund that its non taxable income, i.e. you paid your tax on it on the way in, then pee off to Thailand and then take out the balance when you reach 60, again its non taxable at 60 and over, you should have enough to last you till you reach the AAP age then ship yourself back to "the lucky country", put in your claim, do your 2 year jail term and when you have, pee off to Thailand again with the pension being portable.

 

 

Did you notice the bit in your first quote?  "...and lifting the preservation age to 70, ...".   That's a quote from the Grattan Institute CEO - one of those 'think tanks' that are really an institution developing political agendas / policies.  

 

Won't affect many of us here, the preservation age is already gradually increasing to 60.  But I'll be telling my kids not to invest more than they must in super.  It's tax effective sure, but it will turn into a large set of financial hand-cuffs.  

 

Your "take what you can tax free at preservation age and piss off to Thailand" strategy must be a good one though, coz it's the same as mine!  ?  Not so sure about withdrawing the rest once I hit 60 though - haven't thought that far ahead yet.  As I understand it, being ATO non-resident doesn't hurt the super side of things.  For me it will depend on the AUD's value, and that seems to depend a lot on Comrade Trump's gyrations atm.  If we were to spike up near parity with the USD again I'd be tempted to snatch and run. 

[4MyEgo]

9 minutes ago, moojar said:

 

Did you notice the bit in your first quote?  "...and lifting the preservation age to 70, ...".   That's a quote from the Grattan Institute CEO - one of those 'think tanks' that are really an institution developing political agendas / policies.  

 

Won't affect many of us here, the preservation age is already gradually increasing to 60.  But I'll be telling my kids not to invest more than they must in super.  It's tax effective sure, but it will turn into a large set of financial hand-cuffs.  

 

Your "take what you can tax free at preservation age and piss off to Thailand" strategy must be a good one though, coz it's the same as mine!  ?  Not so sure about withdrawing the rest once I hit 60 though - haven't thought that far ahead yet.  As I understand it, being ATO non-resident doesn't hurt the super side of things.  For me it will depend on the AUD's value, and that seems to depend a lot on Comrade Trump's gyrations atm.  If we were to spike up near parity with the USD again I'd be tempted to snatch and run. 

You picked up on the preservation age thing as quick as I did mate.

 

I didn't need to touch my super, 58 in two weeks time, but thought about it and said, you know what, these C..ts can change things overnight, that said, if I took the $200k and park it in the bank, they couldn't touch me, as for the balance, well as a non resident, I ain't touching it till I am 60, because as you say, its 1/3 to the taxman up to $80k then 37c from $80k to $180k, fark that, I just hope they don't change the super age before I hit 60, and yes, tell your kids not to throw it into super because eventually they will be slaves till they are 70 for the super and AAP which they won't see anyway, because when its aligned the assets test will say, oh sorry you have too much in super...lol

 

I don't care that I am only getting 2.8% in interest less 10% withholding tax as a non resident, the fact of the matter is "I have it", it's mine and they cannot change the rules, sure I might earn less than it being in super, but I have the choice to invest it in the ASX as most of my $'s are, earning tax free $'s, but don't want to go all in, and will just look at it as survival money over the next 6 years.

Edited July 22, 2018 by 4MyEgo

[moojar]

^ They wouldn't change it that quickly, I don't think you have to worry.  If / when the preservation age is increased it will have to be off in the future you'd think, like they are currently doing with both preservation age and AAP qualification age.  I turn 58 in two years, not at all worried the preservation age goal posts will be shifted before then. 

 

You sound as paranoid as I am - I swear every change they make lately is aimed squarely at me!!  ?  Labor's whole policy agenda is out to get me.  

 

I'm not giving financial advice, but you might be better off parking the funds in Super? At least your earnings are taxed bugger all in there - 15% of earnings?  If you have officially retired you may be able to move it into a totally tax free area?  That $1.6m cap thing that was changed recently, anyone with more than that must move the excess back into an 'accumulation' account, so that suggests there are two types of super areas, pre- and post-retirement, with different tax treatment.  Should be easy to find out anyway.  

 

Haha, lots of question marks - As Sgt Schultz would say, I know nothing!

 

 

 

[4MyEgo]

19 hours ago, moojar said:

^ They wouldn't change it that quickly, I don't think you have to worry.  If / when the preservation age is increased it will have to be off in the future you'd think, like they are currently doing with both preservation age and AAP qualification age.  I turn 58 in two years, not at all worried the preservation age goal posts will be shifted before then. 

 

You sound as paranoid as I am - I swear every change they make lately is aimed squarely at me!!  ?  Labor's whole policy agenda is out to get me.  

 

I'm not giving financial advice, but you might be better off parking the funds in Super? At least your earnings are taxed bugger all in there - 15% of earnings?  If you have officially retired you may be able to move it into a totally tax free area?  That $1.6m cap thing that was changed recently, anyone with more than that must move the excess back into an 'accumulation' account, so that suggests there are two types of super areas, pre- and post-retirement, with different tax treatment.  Should be easy to find out anyway.  

 

Haha, lots of question marks - As Sgt Schultz would say, I know nothing!

 

 

 

Paranoid I am, I have around $500k in the ASX so what I make there is tax free, then I have some in the bank which attracts 10% withholding tax on the interest earned as a non resident, the $200k (threshold) I took recently from super as I reached my preservation age which is tax free allows me to manage it, and yes I agree in super it would earn more than where I parked it at the moment,, i.e. in the bank, however as I haven't been doing too badly on the ASX, I might look for some opportunities as the market dips.

[Salerno]

On 7/20/2018 at 12:49 AM, Ryan CUllinan said:

However, I may just go back and make a quick revision mate. I appreciate your input! 

From your article:

 

Quote

 

You must be an Australian resident for at least 2 years prior to claiming the Age Pension.

 

 

I think you need to clarify that as I believe it's incorrect. The 2 years is only relevant to portability; a person can go back and claim on the day they arrive and, if meet the requirements, be granted the AAP from that day ... they just can't leave Australia and get paid it.

[scorecard]

5 hours ago, Salerno said:

From your article:

 

 

I think you need to clarify that as I believe it's incorrect. The 2 years is only relevant to portability; a person can go back and claim on the day they arrive and, if meet the requirements, be granted the AAP from that day ... they just can't leave Australia and get paid it.

 

Interesting point for me for another reason (which I don't wish to discuss here). 

 

Salerno, in the bigger picture I think this is meaning that there is a need to qualify in terms of previous residency, and probably proof of being under the threshold in terms of assets, cash, income etc., however that person can be outside of Australia, in fact for quite a few years, then return and lodge the OAP application forms on the day or arrival in Australia. i.e. no need to wait until say 90 days / 1 year etc., after returning to lodge the application.

 

If the OAP is granted it's backdated to the date of lodging the application. (Typically how long would it take to get a response?)

 

Portability of the OAP (living outside of Australia and still receiving the OAP payments) is allowed after living in Australia full time for 2 years after the date of approval. 

 

Have I got it correct?

 

Thanks.

[Salerno]

33 minutes ago, scorecard said:

Salerno, in the bigger picture I think this is meaning that there is a need to qualify in terms of previous residency, and probably proof of being under the threshold in terms of assets, cash, income etc., however that person can be outside of Australia, in fact for quite a few years, then return and lodge the OAP application forms on the day or arrival in Australia. i.e. no need to wait until say 90 days / 1 year etc., after returning to lodge the application.

Correct. If you qualify (residency, assets etc.) they can't refuse as far as I understand it.

 

But, make sure you let them know you've returned "home" for good ? 

 

33 minutes ago, scorecard said:

If the OAP is granted it's backdated to the date of lodging the application. (Typically how long would it take to get a response?)

As long as you complete your claim within 14 days from lodging intent or starting online I believe when granted it is paid from the date you started (online)/lodged intent. Personally I'd be doing it as early as possible (e.g. 13 weeks before pension age) given delays. Or more likely, if I ever get in that "lucky" position, head back a year before and then lodge 13 weeks in advance of pension age (slim possibility could get portable faster).

 

Can't say I'm aware of average turnaround I'm afraid.

 

33 minutes ago, scorecard said:

Portability of the OAP (living outside of Australia and still receiving the OAP payments) is allowed after living in Australia full time for 2 years after the date of approval. 

See above; if they can prove you only came back to get the pension then head back overseas they could delay and/or refuse portability. But basically yes, around two years penance for your sins then head off.

 

All the above IMHO of course.

Edited July 23, 2018 by Salerno