Wednesday, April 29, 2015

Full Pension and $53,000 pa

We recently assisted a number of financial advisors on methods to achieve the full pension while still working. To explain the options we will look at the process in small steps and be a bit simplistic. In subsequent post we will expand upon the scenario. Let's say we have a couple - Jack & Jill - who run a small business, are both of age pension age and are paying themselves a small wage. We may have both Jack and Jill paying themselves $6,500 per annum - which is the limit of the Work Bonus Scheme. Hence this combined $13,000 pa is exempt from the income test. Now lets say they have other earnings of $7,000 pa - such as additional income. More typical would be if this income were as a result of deemed income. For example they may have $250,000 in bank accounts - below the assets test - which results in a deemed income of just under $7,000 pa. Again this income is below the income test threshold of approx. $7,400 pa. So they now have a combined income of $20,000 pa - wages and deemed income. The full pension for a couple is more than $33,000 pa. The combined income is more than $53,000 pa.