Cock­ies get break thanks to Cen­tre­link

Countryman - - NEWS - Ben Har­vey

It’s a left­over con­ces­sion from the Howard gov­ern­ment era that means many older farm­ers could be miss­ing out on valu­able Cen­tre­link ben­e­fits.

Some­times re­ferred to as the “cockie’s ex­emp­tion” it al­lows ac­cess to the age pen­sion and valu­able con­ces­sion cards once a per­son reaches age pen­sion age, presently 65½.

The lu­cra­tive perk is one of dozens of tips which WA fi­nan­cial ad­viser Nick Bru­in­ing de­tails in his new book, Don’t Panic: More rea­sons you don’t need $1 mil­lion to re­tire well.

The book is a fully re­vised and up­dated ver­sion of his first Don’t Panic project, which ran off the shelves when it was pub­lished in 2015. The new edi­tion is 50 pages longer than its pre­de­ces­sor, con­tains a bonus “ready-reck­oner” of fig­ures and thresh­olds im­por­tant to re­tirees and has a pull-out house­hold bud­get plan­ner.

Im­por­tantly, in the bank­ing royal com­mis­sion era, Don’t Panic: More rea­sons you don’t need $1 mil­lion to re­tire well has lots of in­for­ma­tion about what fees and charges are rea­son­able and how you can choose a fi­nan­cial ad­viser.

The so-called cockie’s ex­emp­tion comes about be­cause Cen­tre­link age pen­sions do not re­quire you to stop work in or­der to claim. Hav­ing reached the el­i­gi­bil­ity age, you sim­ply need to sat­isfy the means test con­di­tions. Cen­tre­link has two tests based on in­come and as­sets and the test which pro­duces the low­est pen­sion is the one used.

For a cou­ple on the land, in­come needs to be un­der a com­bined $79,736 to qual­ify for a small part pen­sion which also gains ac­cess to the valu­able pen­sion con­ces­sion card.

The con­ces­sion card pro­vides sub­stan­tial dis­counts on med­i­cal and gov­ern­ment util­i­ties and ser­vices worth any­thing from a few hun­dred dol­lars to sev­eral thou­sand a year, de­pend­ing on your cir­cum­stances.

For sin­gles, that thresh­old is $52,119. In both cases, planned changes to the rules sur­round­ing a spe­cial in­cen­tive pro­gram to keep se­niors in the work force kick in on July 1, 2019. That will ef­fec­tively lift the cut-off thresh­olds to a gen­er­ous $59,919 and $95,336 for sin­gles and cou­ples re­spec­tively.

By far the more sig­nif­i­cant means test that usu­ally has farm­ers think­ing they have no hope of a claim­ing a pen­sion is the as­set test.

Over and above the fam­ily home and the 2 hectares it sits on, as­sets must be less than $848,000 for a cou­ple to qual­ify and for sin­gles, $564,000.

The spe­cial con­ces­sion for landown­ers is an ex­ten­sion to the as­set test ex­emp­tion for the fam­ily home be­yond the nor­mal two hectares.

Pro­vided the prop­erty is on a sin­gle ti­tle, you have lived there for 20 years and the prop­erty is be­ing fully utilised, hav­ing re­gard to your age and the prop­erty it­self, the en­tire par­cel of land could be ex­empt. The ex­emp­tion does not ex­tend to stock, plant or crops on the prop­erty.

Full util­i­sa­tion means you must en­deav­our to make full use of the prop­erty, but at 85 for ex­am­ple, you wouldn’t be ex­pected to be chas­ing 3000 head of sheep and tend­ing to hun­dreds of hectares of wheat.

Alan Stan­dring, 86, is af­fected by the cockie’s ex­emp­tion. He moved to his Cowa­raump dairy farm more than 50 years ago and while he stopped pro­duc­ing milk in 2000 he de­cided to see out his re­tire­ment on the farm, en­joy­ing a part age pen­sion while con­tin­u­ing to utilise the farm as best he could.

“I have ev­ery­thing I need on the farm, it’s been my life longer than I can re­mem­ber and I re­ally can’t see any rea­son why I would want to leave,” he said.

Re­tired Cowaramup dairy farmer Alan Stan­dring is el­i­gi­ble for dif­fer­ent Cen­tre­link con­ces­sions.

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