Two significant changes have been made to the Work Bonus scheme. These changes apply from 1 January 2024. The first change is that an initial credit of $4,000 will be granted to the “work bonus bank” of each new age pension recipient. The second is that the maximum balance of the “work bonus bank” has been increased to $11,800 (previously the maximum balance was $7,800).
retirement
Possible to commence pension with $1.9m+ balance?
Generally pensions cannot be commenced if the initial pension account balance is greater than $1.9m (the current transfer balance cap which applies from 1 July 2023).
Pensions – End of financial year actions
Now that the end of the 2022/23 financial year is almost here, superannuation members who are currently receiving pensions need to take certain actions.
Higher income limits for Seniors Health Care
The legislation to significantly increase the cut-off limit for entitlement to the Seniors Health Care has been enacted. Now the relevant cut-off limits are $90,000 for a single (previously $61,284) and $144,000 for a couple (previously $98,054). These new limits will be subject to the normal annual indexation cycle which applies each September. The new limits apply from 4 November 2022 and so will be indexed on 20 September 2023.
Transfer balance cap set to increase to $1.9m
The transfer balance cap, which is currently $1.7m, will be increased to $1.9m with effect on 1 July 2023. The increase of $200,000 in the gap is due to indexation.
Back-door benefits from super not permitted
The rules relating to what a self-managed superannuation fund can and cannot invest in are complex and for the uninitiated appear confusing and alien. But there is a basic logic to them.
Downsizer contributions: beneficiary eligibility age to be reduced to 55
From 1 July 2022, the eligibility age for the beneficiary of the downsizer contribution was reduced from age 65 to 60. Now the Government has proposed that the eligibility age for the beneficiary of the downsizer contribution be further reduced from the current age 60 to age 55.
Incentivising pensioners to downsize
The Government is continuing its policy to remove financial barriers which currently inhibit age pensioners (and service pensioners) from downsizing due to the application of the means tests to the sale proceeds of a pensioner’s principal place of residence.