RETIREES worried about tougher new age pension rules are trying to lower their Centrelink-assessable assets through buying funeral bonds and other strategies.
In a recent article published in news.com.au by Anthony Keane, several Financial experts including David Koch and Planning for Prosperity’s own Bob Budreika were interviewed on the impact of the impending Centre-link entitlements and in particular how these changes will impact pensioners
Jan 1 pension entitlement changes
In summary, from January an estimated 300,000 people will lose part or all of their age pension, while about 170,000 low-asset pensioners will receive a boost, as the government lowers the level of assets you can hold before pensions reduce.
Kochie’s video here provides a quick summary of the impact to pensioners, while the detailed article by Trish Power on SuperGuide provides more detail.
Here’s our recent blog on the CentreLink changes Jan 1 2017
Planning for Prosperity senior financial adviser Bob Budreika believes many retirees are in for a nasty surprise in January when the pension changes hit.
“I think a big part of the population isn’t really aware,” he says. “Retirees who don’t have a financial planner don’t realise what they need to do.”
Don’t blindly reduce assets
However, Bob cautions people from blindly trying to lower their assets for the sake of preventing pension cuts, because the longer term cost of losing the assets may be greater.
“There’s an attitude with some people to do whatever they can to make sure they maximise Centrelink. Some of the decisions they make can be pretty silly,” he says.
“Look at two sides of the equation. Ask yourself “if I do tie up assets in a home renovation, funeral bond or gifting, what is it going to mean for my long-term financial security because that money is effectively gone.”