Payment for selffunded retirees no longer applies
YOUR ADVICE
MY wife and I are self-funded retirees in receipt of the Seniors’ Supplementary Payment (SSP) from Centrelink. I understand that the SSP was granted to selffunded retirees as part compensation for not qualifying to receive a Pensioner Concession Card (PCC) and its associated financial benefits. In mid-2015 it was announced that the asset level qualifying to receive a part pension was to be reduced from July 2017, and would result in many part pensioners losing access to their PCC as from that date.
Immediately that announcement was made the SSP that my wife and I receive was reduced by about 70 per cent or $170 per quarter for each of us. Now that the government has announced that from October 9, 2017 access to a PCC will be reinstated to those ex-part pensioners adversely affected by the changed asset level qualification, does it follow that the value of the SSP will also be restored to something like mid-2015 levels?
A departmental spokesperson advises that to help ensure payments to senior Australians remain targeted to those who need them the most and to ensure the sustainability of the Commonwealth Seniors Health Card (CSHC), the Government has ceased payment of the Seniors’ Supplement.
The Seniors’ Supplement provided quarterly instalments based on an annual rate (at June 2015) of $894.40 a year for single CSHC holders and $673.40 for CSHC holders who were partnered. The final payment of the Seniors Supplement was made for the quarter to June 2015. There are no plans to reinstate the Seniors’ Supplement.
This means that cessation of the Seniors’ Supplement affected around 280,000 people with levels of income or assets that have, over many years, been considered sufficient to enable them to support themselves in most circumstances and not require the age pension.
The Commonwealth Government continues to offer the same benefits to CSHC holders as are offered to Pensioner Concession Card holders in terms of prescription costs and access to the lower threshold of the Extended Medicare Safety Net.
CSHC holders who have remained continuously in receipt of the card since September 19, 2016 also receive the Energy Supplement, which will remain at its current rate of $366.60 per year for singles and $275.60 per year for each eligible member of a couple.
SHALL I pay off my investment loan of $178,000 (4.44 per cent p.a.) from my superannuation ($590,000)? I am 65 and still working part time. I own two more houses mortgage free. I have $48,000 in the bank. Planning to retire next year.
I certainly would not be paying off the mortgage while you are working as you would be losing valuable tax benefits/
The decision after you retire really turns on whether your superannuation can earn better than the 4.44 per cent you are paying on the investment loan.
From my experience it should, therefore I suggest you keep the investment loan going until you decide you wish to make a major change in your situation.
Noel Whittaker is the author of
and other books. His advice is general in nature and readers should seek their own professional advice before making any financial decisions. Email: noel@noelwhittaker.com.au