Single Touch Payroll (STP), is an Australian Government initiative to reduce employers' reporting burdens to…
Choosing your ideal accommodation in retirement is not just about finding the right location and environment. With longer life expectancies and the importance of a fulfilling lifestyle, retirees need to put a lot of thought into where and how they will live in retirement. There are also a range of financial issues to consider.
Your financial adviser can implement strategies to assist in:
· Reducing assessable assets;
· Increasing social security entitlements; and
· Minimising entry and ongoing costs for aged care accommodation
Living in the family home, or moving to a more suitable private home, is often the preferred choice of accommodation due to familiarity and stability.
- You will need to budget for ongoing maintenance and upkeep, particularly if alterations are required as you get older.
- If your home makes up the bulk of your wealth, you may be disadvantaged by a lack of access to capital and subsequent problems with generating income.
- Selling your existing home and moving to a smaller or more convenient home may affect your social security entitlements, particularly if there are excess funds.
- There are social security impacts if you do not sell your home but buy elsewhere or move in with a friend or relative.
- If you require in-home care, you may be eligible for assistance from the government.
Granny flat accommodation is usually within, or attached to, the home of a relative. Residents can generally benefit from close at hand support and company from their family and friends.
Rights to a granny flat are established by either:
- transferring the ownership of your private home and obtaining a life interest; or
- exchanging money or assets for a life interest in a private residence.
- Your granny flat rights may be included in the Centrelink assets test, depending on whether you are considered a homeowner or non-homeowner.
- If you are not considered a homeowner, you may be entitled to receive Rent Assistance.If you pay substantially more for your granny flat than it is worth, the extra amount may be included in your asset
Many older people appreciate the lifestyle benefits of retirement villages. These can include companionship, facilities and activities, additional security, home maintenance and access to on-site medical assistance.
- Buying into a retirement village may attract an entry fee known as an ‘entry contribution’.
- Fees vary greatly from village to village.
- The type of contract will also vary between villages, but each will detail relevant entry, ongoing and exit fees.
Eligibility for social security is based on:
- The amount of the entry contribution, can determine whether you are considered a ‘homeowner’ or ‘non-homeowner’ for social security purposes. Rent assistance may also be available
- Decisions made about the former home.
- A basic daily care fee applies and although overall costs may be part-funded by the government, all residents are required to pay this fee.
- Means tested care fee may also apply
- Accommodation deposit is required, which is an entry fee paid, which can be paid as a lump sum or ongoing fee.
- Additional fees may be charged for extra services.
- If your former home is retained and one spouse continues to live there, the resident generally remains a ‘homeowner’ for social security purposes and the home is an exempt asset.
- Rental income received is assessable under the income test.
This information does not consider your personal circumstances and is general advice only. You should not act on any recommendation without considering your personal needs, circumstances and objectives. We recommend you obtain professional financial advice specific to your circumstances.