Nick Bruining: An over 55s guide to accessing | Australian Markets
With Australia’s unemployment fee edging up barely in June, many older people not but eligible for an age pension shall be weighing up their choices.
That can embrace utilizing up their financial savings or tapping into their superannuation to carry them over till the age pension eligibility age of 67.
Ceasing employment after turning 60 and never intending to return to work on the time you entry your super is a legitimate “condition of release” and permits full entry to all of your nest egg.
One different option is the poorly understood JobSeeker allowance fee from Centrelink.
JobSeeker is a means-tested allowance benefit. Allowances are completely different to pension funds as a result of they’re thought to be a non permanent assist fee to carry you over till you come back to paid employment.
While the traditional JobSeeker fee for a single is $789.90 a fortnight, a single over 55 receives a greater fee of $850.60 if they’ve been on a JobSeeker fee for 9 consecutive months.
Eligible {couples} obtain $725.70 every, and as with different income assist funds {couples} are assessed as a single entity beneath the means take a look at system.
JobSeeker funds type half of your taxable income for the yr.
For these beneath 60, receiving JobSeeker may also open the door to accessing some of your super earlier than retirement.
If you’ve been in receipt of a Centrelink income assist fee for at the least 26 weeks, you possibly can apply to have up to $10,000 launched out of your super each 12 months. Be conscious that this withdrawal is taxable.
JobSeekers are subject to an asset and income take a look at — however with massive variations in contrast to the age and incapacity assist pension guidelines.
While the asset means take a look at decrease limits are equivalent to the pension figures, when you exceed the restrict no benefit is payable. It doesn’t taper down in the identical means as a pension.
For a single house owner, the asset take a look at restrict is $321,500, excluding the worth of the home. For a couple, it’s $481,500. Note that Centrelink will settle for the second-hand or scrap worth for fixed property, so don’t calculate this quantity based mostly on insured values.
Importantly, all money held in superannuation accumulation section is exempt from means testing till you hit 67.
Non-homeowners are allowed an extra $252,000 in property, whether or not as a single or a couple.
The income take a look at is advanced and is calculated in the identical means because the age pension. It is just not the identical because the Australian Taxation Office’s technique.
In essence, in case your Centrelink-assessable income exceeds $150 a fortnight, your allowance will begin to cut back. The cut-off limits range significantly based mostly on your loved ones scenario, however for a lot of older kid-free Australians, it’s across the $1500-a-fortnight mark — and better when you’ve been on advantages for more than 9 months.
Importantly, the “mutual obligation” necessities for over 55s is sort of completely different to youthful recipients of JobSeeker.
Mutual obligations require you to display some exercise that makes you job prepared.
While ideally you’ll proceed to search paid employment, you possibly can meet your obligations via different actions equivalent to formal research or accepted voluntary work. In each circumstances, this wants to take up at the least 30 hours a fortnight of your time if you’re over 60.
Between 55 and 60, you will need to proceed to search work with a most of 15 hours doing voluntary work within the first 12 months of unemployment. After 12 months, the identical guidelines for over 60s apply.
One important level to notice: if you’re over 60 and claiming JobSeeker on the identical time and never merely doing voluntary work or research, you most likely can not entry your super.
The guidelines are, you possibly can entry your super when you stop any employment after turning 60. If you don’t have a job to stop then, by definition you haven’t glad this situation of release.
Nick Bruining is an unbiased financial adviser and a member of the Certified Independent Financial Advisers Association
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