With important new deeming rules coming into effect on 1 January 2015, now is the time to review your superannuation and pension arrangements to ensure you don’t miss out on valuable Social Security entitlements.
Account based pensions have generally been given favourable treatment when Social Security assesses your eligibility for benefits such as the Age Pension and the Disability Support Pension.
As a result, many people with account-based pensions are currently able to receive valuable government support, topping up their own pension account payments to help their retirement savings last longer.
This is set to change from 1st January 2015, when new ‘deeming’ rules come into effect for account-based pensions making them subject to the same ‘deeming’ rules that currently apply to financial investments (exceptions apply). It is therefore important to review your Social Security entitlements now and make any changes well before 1st January 2015 as account based pensions commenced prior to this date for an income support recipient will not be subject to the new deeming rules (unless you move your balance to a new account based pension or the income support payment ceases from 1st January 2015).
Equally important is to assess whether setting up a new account based pension prior to this date would be beneficial for you.
If you haven’t yet opened an account-based pension, and you are currently eligible to do so (e.g. if you are aged 55 or over), there may be benefits in starting an account based pension and applying for Social Security income support payments (where eligible) before 1st January 2015.
To find our more, or to discuss your situation, please call Dragonfly Financial Services on (02) 6273 3118.
General Advice Warning:
The information provided in this document is general information only and does not constitute personal advice. It has been prepared without taking into account any of your individual objectives, financial solutions or needs. Before acting on this information you should consider its appropriateness, having regard to your own objectives, financial situation and needs. You should read the relevant Product Disclosure Statements and seek personal advice from a qualified financial adviser.