I am having an excited debate with a friend and seek some assistance, please.
Assume Man 1 is on the aged pension; and receiving near to the full pension, given the value of assets etc.
Man 1 then considers buying a new Tug and Caravan combo, say $120,000 investment.
Man 1 would need to draw dollars from his super fund = reduced pension because of increased dollars in bank..
Man 1 buys the Combo, then $ bank balance reduces, but asset value goes up by $120,000, resulting in ongoing reduced pension payments.
Is this scenario close to correct, or have one of us got it wrong.
Mate believes the Man 1 could buy the Combo and not lose any benefits.
Help Please. KB
jade46 said
04:20 PM Oct 7, 2016
Your pension does not reduce the same for an asset i/e Tug and Caravan as $ in the bank.They "DEEM" the money in the bank is earning you interest so an income and reduce pension based on that income . Your asset is calculated differently and of course can be devalued every 6 months whereas money in the bank cannot. Attached is the link to a very good pension calculator. You can run whatever figures you like and see the different results
http://yourpension.com.au/#calculator
-- Edited by jade46 on Friday 7th of October 2016 04:22:45 PM
oldbloke said
04:40 PM Oct 7, 2016
Major changes are coming in january 2017, so you may need to take them into account.
LLD said
04:51 PM Oct 7, 2016
Started on aged pension yesterday. Recently bought a new tug & van. Rather than $120,000 extra in the bank earning deeming rates, you now have a 2 assets worth a bit less than what was paid out. I used dealer buy in Redbook as a guide.
$100,000 worth of assets will reduce a pension by about $75 / fortnight.
Robshep said
05:13 PM Oct 7, 2016
Man 1's ended up transferring $120000 of his super asset in to $120000 vehicle/caravan asset - no change overall.
Centrelink will accept a "fire sale" valuation on the vehicle/caravan assets, so the $120000's two components can be reduced accordingly.
One wouldn't go declaring a $60000 vehicle at $1000 and a $60000 caravan at $1000, otherwise bells will ring and there could be a knock at the door.
Be reasonable with the fire sale valuation and the $120000 can be reduced to an amount acceptable to both parties, reducing the overall assets value (and increase his CURRENT pension).
(Not an expert, but have spent the odd hour or two (or three) on the phone sorting things out with them).
brickies said
07:14 PM Oct 7, 2016
Centrelink give good advice and it's free
NeilandRaine said
10:51 PM Oct 7, 2016
I wish I had enough money for this to be a problem
rockylizard said
07:51 AM Oct 8, 2016
brickies wrote:
Centrelink give good advice and it's free
Gday...
Ditto above .... the ONLY place to ask questions on subjects such as this is at Centrelink. Their Financial Services Officer/s are excellent, informed, helpful and unbiased.
Asking these questions from other 'forumites' is fraught with danger .... almost as bad (or worse?) than asking an electrical (or WDH) question.
Cheers - John
Norweb said
08:55 AM Oct 8, 2016
brickies wrote:
Centrelink give good advice and it's free
Agree with brickies, I am in the situation waiting for probate to be granted on late mother in law money (a very large sum).
My person in Centrelink has been great over the past 4 years as he gave the wife info about the mother in law when her husband died (the wife had power of attorney as mil had dementia).
They give advice and are not biased at all as they don't get any commission not like financial advises. The only hassle is whilst waiting is seeing the 20yrs old with expensive phones and discussing what they will tell them why they have not looked for a job. Gets you wild as I had 4 day off school and mum said how was I going to pay my rent. I worked 48yrs non stop.
I went on the pension 2010 and have had two heart attacks and thank god for the purple card, it got me in the ambulance and 2 stents no charge. norm
keiron said
10:36 AM Oct 8, 2016
Sincere thanks for all replies. Very helpful. KB
macka17 said
03:02 PM Oct 8, 2016
Hey Norweb.
What's the "purple" card?.
Norweb said
03:36 PM Oct 8, 2016
The pension card,the wife has one too and one of her medication is $86.00 and she gets it for $6.00 on the pension. We both worked hard and paid taxes and had no super to speak off. ...norm
Roving-Dutchy said
04:19 PM Oct 8, 2016
We live in a great country, I sometimes think we don't realize, how lucky we are, one of my medications that I paid $6 for was priced at $1500 for a 3 month supply.
I agree with talking to a Financial Adviser at Centrelink, is the best bet to gain the correct information re your entitlements.
Cheers
David
jade46 said
08:21 PM Oct 8, 2016
So rockylizard how do I electrify my WDH
Bryan said
10:02 PM Oct 8, 2016
jade46 wrote:
So rockylizard how do I electrify my WDH
Having had loads of experience in this specific area and once read a comic book about how the Road Runner got electrified, I'm pretty certain you will need to plug it in to get to work.
-- Edited by Bryan on Saturday 8th of October 2016 10:03:11 PM
Weedpharma said
09:06 AM Oct 9, 2016
Bryan, do I need to use an RVD?
Weedpharma
brickies said
12:07 PM Oct 9, 2016
Now stay on topic not far to the poster to go off topic
Bryan said
12:56 PM Oct 9, 2016
Weedpharma wrote:
Bryan, do I need to use an RVD?
Weedpharma
No but you'll definitely need a VDR
Tony Bev said
01:19 PM Oct 9, 2016
To get things back on topic
I think that rockylizard has hit the nail on the head
The people who have this type of free advice at their fingertips, are the financial advisors at Centerlink
The advice I received four years ago, (shortly before I turned 65), which may now be out of date was as follows
If I had purchased a new tug and caravan, the price I paid would have been the asset value, as it would have been reasonably new
But...
In regards to my then 30 year old caravan, and twenty year old car, the asset value would have been, what I would reasonably expect to get, if I sold it
Unfortunately although the Centerlink financial advisors, can quote chapter and verse, on what pension you will receive, in regards to how much cash and assets you have, they are not allowed to give financial advice
Yes LLD those seminars are very helpful have been to them are are run by FIS Officers , And they answer question from the floor and after the session .
wingnut said
11:49 AM Dec 17, 2016
I had to retire with medical problems back in 2010 and went to Centrelink for advise. After asking a lot of questions both real and hypothetical we decided to sell up everything and go on the road.
I cashed in my super and paid it into the house as we still had a mortgage. Then bought a new Pajero and a 2 year old Jayco Sterling (2006) model) Used the equity from the house set up them up for travel then sold the house. All this time the house was being paid for with mortgage insurance.
Now the van is not classed as an asset as it is our home and we use caravan parks no free camping at all in the last 5.5 years and we receive rent assistance, same as if we were renting a house or unit.
So now we travel solely on the pension no other income and no super. Since we started out we have traded the Pajero on a Colorado and the 2006 Sterling on a 2013 Sterling so now the only assets are the Colorado and a modest (small) amount in the bank for emergencies. Until you do it you don't know how little you really need. We eat well and have out nibblies and drinks pay our bills and save money, still got private health going.
You only need big amounts of money if you want to live the high life we don't and never have. We've had houses and been overseas 6 times but in the end it's only stuff and when you get rid of it you then realise how much you really didn't need all that stuff.
Travel is different to many people ,the ones that do the lap in 3 months or like us have done the bottom half twice in 5.5 years and seen half of it. We tend to stop for minimum of a week and sometimes a month if it suites us. Fuel is our smallest cost , most caravan parks average arund $180 a week, worst was Townsville at $210 best was Lightning ridge at $150. We use the seniors supplement + rent assist to pay the rent, after we use that money we average around $70 a week out of our combined pensions.
Life on the road is simple and it gets better as time go by and you get a feel for the best places at the best time to be there.
I am having an excited debate with a friend and seek some assistance, please.
Assume Man 1 is on the aged pension; and receiving near to the full pension, given the value of assets etc.
Man 1 then considers buying a new Tug and Caravan combo, say $120,000 investment.
Man 1 would need to draw dollars from his super fund = reduced pension because of increased dollars in bank..
Man 1 buys the Combo, then $ bank balance reduces, but asset value goes up by $120,000, resulting in ongoing reduced pension payments.
Is this scenario close to correct, or have one of us got it wrong.
Mate believes the Man 1 could buy the Combo and not lose any benefits.
Help Please. KB
Your pension does not reduce the same for an asset i/e Tug and Caravan as $ in the bank.They "DEEM" the money in the bank is earning you interest so an income and reduce pension based on that income . Your asset is calculated differently and of course can be devalued every 6 months whereas money in the bank cannot. Attached is the link to a very good pension calculator. You can run whatever figures you like and see the different results
http://yourpension.com.au/#calculator
-- Edited by jade46 on Friday 7th of October 2016 04:22:45 PM
www.redbook.com.au/portal/tabID__2807404/DesktopDefault.aspx
So my total cash & assets is less. I used www.humanservices.gov.au/customer/enablers/online-estimators to do my estimation. Initially I forgot 2 cars, 1 van & 5 motorbikes. Don't have super, just savings assessed by deeming rates.
$100,000 worth of assets will reduce a pension by about $75 / fortnight.
Centrelink will accept a "fire sale" valuation on the vehicle/caravan assets, so the $120000's two components can be reduced accordingly.
One wouldn't go declaring a $60000 vehicle at $1000 and a $60000 caravan at $1000, otherwise bells will ring and there could be a knock at the door.
Be reasonable with the fire sale valuation and the $120000 can be reduced to an amount acceptable to both parties, reducing the overall assets value (and increase his CURRENT pension).
(Not an expert, but have spent the odd hour or two (or three) on the phone sorting things out with them).
Gday...
Ditto above .... the ONLY place to ask questions on subjects such as this is at Centrelink. Their Financial Services Officer/s are excellent, informed, helpful and unbiased.
Asking these questions from other 'forumites' is fraught with danger .... almost as bad (or worse?) than asking an electrical (or WDH) question.
Cheers - John
Agree with brickies, I am in the situation waiting for probate to be granted on late mother in law money (a very large sum).
My person in Centrelink has been great over the past 4 years as he gave the wife info about the mother in law when her husband died (the wife had power of attorney as mil had dementia).
They give advice and are not biased at all as they don't get any commission not like financial advises. The only hassle is whilst waiting is seeing the 20yrs old with expensive phones and discussing what they will tell them why they have not looked for a job. Gets you wild as I had 4 day off school and mum said how was I going to pay my rent. I worked 48yrs non stop.
I went on the pension 2010 and have had two heart attacks and thank god for the purple card, it got me in the ambulance and 2 stents no charge. norm
Sincere thanks for all replies. Very helpful. KB
What's the "purple" card?.
I agree with talking to a Financial Adviser at Centrelink, is the best bet to gain the correct information re your entitlements.
Cheers
David
Having had loads of experience in this specific area and once read a comic book about how the Road Runner got electrified, I'm pretty certain you will need to plug it in to get to work.
-- Edited by Bryan on Saturday 8th of October 2016 10:03:11 PM
Weedpharma
No but you'll definitely need a VDR
To get things back on topic
I think that rockylizard has hit the nail on the head
The people who have this type of free advice at their fingertips, are the financial advisors at Centerlink
The advice I received four years ago, (shortly before I turned 65), which may now be out of date was as follows
If I had purchased a new tug and caravan, the price I paid would have been the asset value, as it would have been reasonably new
But...
In regards to my then 30 year old caravan, and twenty year old car, the asset value would have been, what I would reasonably expect to get, if I sold it
Unfortunately although the Centerlink financial advisors, can quote chapter and verse, on what pension you will receive, in regards to how much cash and assets you have, they are not allowed to give financial advice
They can only tell you to see a financial advisor
Hope that this clears a few things up