Category: Advice Library

A range of resources to assist advisers deliver great advice; SOA wording, checklists and department forms.  Up to date and easy to access resources for all our members.

SOA GRANNY FLATS

A living arrangement is considered a ‘granny flat’ interest where: the person ‘pays’ for a life interest or right to accommodation for life in a private residence that is to be the person’s principal home, and the residence is not owned by the client, their partner, or an entity (trust or company) that they control. Both life interests and life tenancy arrangements may meet the definition of a granny flat interest for Centrelink purposes. The granny flat interest rules do not have any tests regarding family relationship or the level of support provided to the resident. However, granny flat arrangements generally do involve family members, typically involving an arrangement between a parent and child. There are special rules for the assessment of granny flats which can allow granny flat residents to transfer assets or money over the allowable gifting limits without deprivation applying[1], in exchange for a right of occupancy for life in a residential property. The following definitions are fundamental to the assessment of granny flat arrangements for social security purposes: Entry Contribution (EC) – the value of the granny flat interest is the entry contribution for social security purposes. This amount determines home ownership status (i.e. homeowner or

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SOA Wording – Challenger CarePlus

The Challenger CarePlus annuity provides guaranteed regular payments in exchange for an initial capital investment.  The annuity creates a regular cash flow for life, regardless of how long the annuitant lives or how investment markets perform. It is treated beneficially for Social Security purposes through favourable income and assets test treatment. The CarePlus Insurance will pay the estate or the nominated beneficiaries a lump sum (called the sum insured) when you die. You pay a single premium for lifetime insurance cover. The Insurance can only be purchased if you are also purchasing a CarePlus Annuity.

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SOA Wording – Couple Assessment

Strategy Overview  For a couple the timing of an aged care asset and income assessment can affect the calculation of assessable assets and income.   The formula used to calculate your ability to contribute towards the cost of your accommodation and care is based on your assets and your income.   As a couple, the assessable assets are considered on a 50/50 basis, irrespective of in whose name the asset is held and the minimum assets amount ($52,500) is deducted from each share. The income assessment will also capture half of each person’s income.  Some people will have their accommodation costs met in full or in part by the Australian Government, while others will need to pay the accommodation price agreed with the aged care home.  The outcome of the income and the asset test are added together, if the amount is less than the threshold then you are classified as a Low Means resident.   The timing of the assessment can create very different outcomes when dealing with a couple because of an exemption that applies to your former home when your spouse still lives there.  A couple who both enter care on the same day will each have 50% of the

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SOA Wording Asset Test Changes

Centrelink Assets Test Change  The Age Pension assets test is a means-based test which helps Centrelink determine your eligibility for the age pension and other social security payments. If you have assets over the lower threshold, your entitlement to the Age Pension will reduce.  Under the current rules, the asset test reduces your rate of Age Pension by $1.50 per fortnight for every $1,000 over the lower threshold.  Under the new rules that will apply from 1 January 2017:  The lower threshold is increasing  The rate at which your Age Pension reduces if your assets exceed the lower threshold is doubling from $1.50 per fortnight to $3.00 per fortnight for every $1,000 over the threshold.  This has the effect of reducing the cut-off limit where an Age Pension is no longer payable.  What are the new asset test thresholds? As at 1 July 2021 The table below provides a summary of the current and new Age Pension asset test thresholds. Please note that the lower thresholds have increased and the cut-off thresholds where you are not entitled to an Age Pension have lowered.    Current lower threshold   New lower threshold (estimated)  Current cut off limit  New cut-off limit  (estimated)  Single homeowner  $270,500  $250,000  $791,750  $546,250  Single non-homeowner   $487,000  $450,000  $943,250 

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RV SOA Wording Revised

There are lots of different terms used by retirement communities, from the traditional “Retirement Village” or “Over 55’s Community” to the more contemporary “Gated Community”, “Lifestyle Resort” and even “Aged Care”. In reality most retirement communities are either a Retirement Village or a Land Lease Community.

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