That trip around Oz

The latest customer at agepensionsolutions.com owns 2 units in the same block, lives in one and rents the other out, but is wanting to also rent his residence for 12 months while touring around Oz.

His question is will it decrease his pension?

Well after inputting his details his assets are the determining factor and he gets about 50% of the maximum aged pension, so the exercise was to see how much more income he can make to "equalise" the asset/income tests.

The result was that he could receive 90% of the amount [after deductions] he presently gets for the rented unit, so he has decided to rent it at that figure, hitch up the Sterling and drive into the sunset with an extra $150 per week in his pocket.

Another happy customer!

Allocated Pension vs Lump Sum

As we see it, the first question one needs to address as a LOP is what you do with your accumulated Superannuation once you retire.

The normal action is to provide an "Income Stream" via an Allocated Pension or similar, but one can also take a [part] Lump Sum to provide "goodies" like a new car, boat, caravan etc, or just leave [part of] it as Superannuation [and take Lump Sums later?].

All these options attract different TESTING regimes against [any] Aged Pension entitlement. So we see the first logical exercise in your Plan is to decide on the CAPITAL amount of Allocated Pension.

So to allow you to compare apples with apples we have set up the Input Tables to allow you to try different amounts of Capital while checking the effect on Aged Pension.

Links for your Convenience

Below the BLOG ARCHIVE [scroll down if needed] on the right we have listed some links that may be of interest to you, however these are offered on a "no official endorsement" basis, so use the normal care when accessing them.

Entering YOUR Data into LOPS

In case you are not aware, one of the advantages of an Aged Pensioner have a PC [with Internet] is that you can use the Centrelink ONLINE SERVICES facility to access all your information about Assets, Income etc. Generally this will be the info you gave them but remember that Centrelink may well change some data eg value of shares changing. Therefore if you Register for Online Services you will have the very latest data.

Then you can simply put the same data into the LOPS, resulting in a huge amount of DERIVED INFORMATION that of course is not part of the legislation but is vitally important to YOU in your ongoing FINANCIAL PLAN.

Is Deeming Included?

You may notice in using the LOPS that the DEEMED amount [if any] is not itemised anywhere. Please rest assured it IS there in the calculations and it will appear as part of the TESTED INCOME on the page called AGED PENSION RESULTS.

About Drawdown

You may be asking if the LOPS caters for the reduction in Drawdown which Centrelink allows based on the turndown in the world economy. The answer is yes, you can go to the INPUT in Col 2 and select Centrelink #2 and change all the percentages [to half].

However we don't recommend doing so as this reduction will most probably end in 2010 so can not be considered as being part of any long term plan, which is what the LOPS is all about.