Superannuation Discussion + market volatility

[NM]

We are in the fortunate position of being given permission to spend the kids inheritance.

We are still waiting to receive our inheritance - 3 out of 4 parents still plodding on. My plan is to use any inheritance we receive to pay off our kids' HEX debts so they can be in a similar situation to me when I received a free tertiary education and not be shackled by debt at the start of a working career.

 

[QF WP]

Similar @NM except we're 5/5 still alive (yes, I have a step parent in law). My parents have already created bequests in their Wills to extinguish any likely HEX debts and give their grandkids a very good start in life.

I'm not in the least concerned with the current market movements, as I'm only 54 and still have sufficient employable years left, plus any cash bequests can be used to top up personal non-deductible contributions to our super.

 

[CaptJCool]

Hoping this is staying on topic
Do people .....work their superannuation to perhaps be entitled to either the Cshc or the old infamous $1 pension?

Yes

the recent 2022 Federal election has seen the CSHC thresholds lifted to $90,000 Singles and $144,000 couples

Federal election 2022: Promises, promises

As older Australians head to the polls, here is a summary of the key commitments made to seniors from the two major parties.

nationalseniors.com.au

bear in mind THIS IS TAXABLE INCOME
tax-free superannuation is excluded from determining the figure

and yes, if necessary I will

 

[mrsterryn]

bear in mind THIS IS TAXABLE INCOME
tax-free superannuation is excluded from determining the figure

and yes, if necessary I will

They are changing it from "adjustable taxable income "?
On topic component is the relevance to perhaps take advantage of poor market results if at Age pension age

 

[CaptJCool]

The Retirement Income Review tells us that Into the future around 1/3 of eligible 67 yo will apply upon turning 67. Some of the rest will end up there once their lump sum superannuation is exhausted but that’s later in life eg at 80.

in the meantime practically everyone will qualify for the CSHC

As for gifts and inheritances there’s F all research about this but we know

about $1,000 is given to each (adult) child as a gift pa (at most)

How to gift money to your kids without copping a tax bill

Australians currently hold more than $11 trillion in net assets, the most money that has ever moved between generations. Getting it wrong could be costly.

www.moneymag.com.au

inheritances tend to be received from age 55 onwards (surviving spouses inherit first and this knocks half those over 90 off of Age pension) so this is the more likely age for when the second parent Final estate happens...

Rethink inheritances. These days they go to the already middle-aged

Not only do we not tax inheritances, we actually subsidise them, making the already well off even better off.

theconversation.com

 

[QF WP]

The vast majority of my clients only qualify for CSHC - good planning over many years makes sure of that . I finally have one couple that will fail it this FY and next due to distributions from a family trust, but will be back on CSHC in 2024/5.

 

[CaptJCool]

They are changing it from "adjustable taxable income "?
On topic component is the relevance to perhaps take advantage of poor market results if at Age pension age

Sorry

you are right
it’s adjusted TI - still doesn’t include super except for deeming rates on account based income streams

 

[QF WP]

They are changing it from "adjustable taxable income "?
On topic component is the relevance to perhaps take advantage of poor market results if at Age pension age

Not to my knowledge - perhaps @CaptJCool forgot the important word "adjusted"

1.1.A.62 Adjusted taxable income (CSHC) | Social Security Guide

Definition For the purposes of CSHC, an individual's ATI for the tax year (1.1.T.10) is: the SUM of the following amounts for that year

guides.dss.gov.au

 

[mrsterryn]

Not to my knowledge - perhaps @CaptJCool forgot the important word "adjusted"

1.1.A.62 Adjusted taxable income (CSHC) | Social Security Guide

Definition For the purposes of CSHC, an individual's ATI for the tax year (1.1.T.10) is: the SUM of the following amounts for that year

guides.dss.gov.au

I was wondering with the increase to the income test limits

 

[QF WP]

Hmmm, I haven't seen or heard of the increase to the income limits (off to check with my technical friends) but current details can be found here:

3.9.3.30 Assessment of income for CSHC | Social Security Guide

Income test On 1 January 1999 the ordinary income (1.1.O.30) test was replaced by an income test based on ATI (1.1.A.62). This income test is based on the applicant's ATI for the reference tax year, usually evidenced by their TNA plus any other income documents required to determine the person's...

guides.dss.gov.au

 

[mrsterryn]

With the superannuation fees and transfers (John's original comment about how the fees worked ) are people moving their superannuation to the younger spouse ? I believe minimal tax disadvantages (?) And no Centrelink disadvantages as "gifting " isn't considered between partners

 

[CaptJCool]

Hmmm, I haven't seen or heard of the increase to the income limits (off to check with my technical friends) but current details can be found here:

3.9.3.30 Assessment of income for CSHC | Social Security Guide

Income test On 1 January 1999 the ordinary income (1.1.O.30) test was replaced by an income test based on ATI (1.1.A.62). This income test is based on the applicant's ATI for the reference tax year, usually evidenced by their TNA plus any other income documents required to determine the person's...

guides.dss.gov.au

Morrison announced it, and Albanese matched it!

 

[QF WP]

Morrison announced it, and Albanese matched it!

Announcing it is one thing, but getting legislation drafted, discussed and agreed in both Houses and getting Royal Assent may take quite some time.

Historical CSHC figures can be found here: 4.10.7.50 Historical income limits for CSHC | Social Security Guide

 

[mrsterryn]

Interestingly it seems to be assumed it will occur by Services Australia aka Centrelink . Which would definitely impact people who currently over a comfortable portfolio and over age pension age

 

[QF WP]

With the superannuation fees and transfers (John's original comment about how the fees worked ) are people moving their superannuation to the younger spouse ? I believe minimal tax disadvantages (?) And no Centrelink disadvantages as "gifting " isn't considered between partners

Withdrawal of funds from a superannuation or Pension fund from an Age Pension recipient and contribution to a younger spouse who is a non recipient can still be a valid strategy for a number of reasons (not just Centrelink). No gifting rules apply between a married couple, only to external beneficaries where the gift is more than $10K in a financial year with a cap of $30K over a 5 year period.

 

[CaptJCool]

Announcing it is one thing, but getting legislation drafted, discussed and agreed in both Houses and getting Royal Assent may take quite some time.

Historical CSHC figures can be found here: 4.10.7.50 Historical income limits for CSHC | Social Security Guide

With the final Senate figures announced today

ALP 26
Greens 12

then one needed to pass legislation of

david Pocock
paulube x 2
lambid x 2

the LNP Only got 32

 

[QF WP]

Noticed this précis on the recent sharemarket volatility from AMP’s Chief Economist Dr Shane Oliver:

 

[Flashback]

And of course in the UK with inflation sitting at 9% if you have cash in the bank, which although improved slightly now to rates of 1.5% it's still negative equity.... Although you're earning on the cash, overall you are losing.

 

[VPS]

Meanwhile in Australia we may have death/inheritance taxes soon.

Your rationale for that comment is?

 

[VPS]

The vast majority of my clients only qualify for CSHC - good planning over many years makes sure of that . I finally have one couple that will fail it this FY and next due to distributions from a family trust, but will be back on CSHC in 2024/5.

Do they actually check. I have a friend who has one and his wife was eligible this year for one and she was knocked back because he had gone back to work and they failed the income test. He is still using his CSHC and no one has asked for it back.

I used mine for the first time yesterday to save a couple of 100 dollars on xray gaps