For many retirees, particularly those close to the new cap, there are steps they can take to avoid the loss of their pension. Here they are:
1) Review what your personal asset levels are. Many people make the mistake of telling Centrelink the insured or replacement value of their assets. Also the value of your personal assets (such as cars, furniture and clothes) may well have reduced over time. Make sure it matches that level and is not over-stated.
2) Invest up to $12,250 each into funeral bonds. These are not counted towards the assets test.
3) If your spouse is below the Age Pension age, consider putting money into his or her super – super is not counted towards the asset test until you turn age pension age (by the way this age rises to 65.5 on 1 July 2017)
4) If it makes sense, consider bringing forward renovations or improvements to your family home – the family home is not counted towards the assets test. These may reduce ongoing costs (such as solar panels) or improve your comfort (such as insulation, awnings, upgraded bathroom/kitchen) in retirement.
5) You can gift up to $10,000 per annum (a maximum of $30,000 over a five year period) to say, a child and this will not be counted as an asset.
Remember to make sure these things make sense for you. There is no point in gold plating your taps if that is not something you would appreciate.