Changes to Age Pension Assessment Rules

This article highlights one change which seems to have gone largely unnoticed.There is much hype in the media at the moment regarding what changes may or may not be made in this year’s Federal Budget in relation to the Age Pension.

 It goes without saying that the government’s Aged Pension system is complicated.

The task of understanding the system becomes even more confusing when you try and reconcile it with superannuation and other investments that entitle you to a part-pension.

A particular quirk of the system is that if you get things wrong and happen to be overpaid you will have to fully repay the amounts to Centrelink.  However, if a mistake results in you being underpaid, there is no mechanism for getting back any underpayment.

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Can You Really Do That?

Investment property ownership continues to grow in Australia.

Many employees, whether it be of their own company or trust or unrelated employer, may have a residential rental property or multiple properties. 

Many of these same employees would currently be paying for the expenses associated with these properties out of their “after-tax” income.

However, it is possible to salary sacrifice these expenses i.e. having your employer pay for or reimburse you for the expenses and having the employer deduct any such payments or reimbursements from your “before-tax” income. 

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Looking at Purchasing an Investment Property

When it comes to buying property, there a few boxes that should be “ticked off” as part of your pre-purchase due diligence.

Firstly,“crunching the numbers”.

Before buying a property, it is imperative that you obtain as much information as possible as to the potential rental income and details of all associated expenses. 

This includes contacting the local council for details of rates (land and water), obtaining insurance quotes and investigating any other costs that may be involved.

It also includes working out how much you are going to borrow, and including in that estimate an allowance for stamp duty and any improvements that may be required to prepare the property for tenants.

We have a number of tools that help calculate how much you may need to “prop up” the property each week and also assistance with calculating tax depreciation.

It’s also important to factor in a “what if” analysis.  For example, what if interest rates increase?  Can we afford for a gap between when old tenants move out and new ones move in where no rent is received?

It’s also important to investigate what capital growth the property may bring, as this will be a key factor in determining whether the property is worthwhile investing in.

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SMSFs & Property Syndicates

Self-managed superannuation funds (SMSFs) remain one of the most popular vehicles when it comes to providing for one’s own retirement.


Their popularity is not just amongst the “mega rich” but your ordinary everyday mum and dad investor.


Therefore, it follows that not everyone will have enough money in their self-managed superannuation fund (SMSF) to own a property outright. Furthermore, for whatever reason, purchasing a property via a limited recourse borrowing arrangement may also not be appropriate.


As a result, it is becoming increasingly more popular for people to join with other like-minded investors in establishing a “property syndicate”.


In most cases the property syndicate is established as a unit trust.


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