Retirement is an opportunity to assess where you live and how you want to live. 

Questions to help you decide where to live

Retirement may be a time to think about whether you want to stay where you are, downsize or move into a retirement home.

Your children may have moved out, and the family home now seems too big. Perhaps you no longer want to be responsible for running a house.

Or your health may not be as good as it used to be, and you need a bit more help. You might see an opportunity to reduce rent or loan payments.

Whatever your circumstances, you could consider your living arrangements by asking yourself some key questions, including:

• What is my present financial situation? (For example, do I own or rent, do I have debt, am I financially responsible for someone else?)
• How is my health now, and should I plan for future health care needs?
• Do I want to stay near family and friends?
• How much room do I need?
• What kind of lifestyle do I want?

If you own your home

Staying in your home

Staying in your own home, at least in the early years of retirement, has plenty going for it. You know your community and it might mean you stay close to family and friends. You are likely to have an emotional attachment to your home and the geography. Familiarity can be very comforting.

If this is your choice, things to consider include:

• Do you, or will you in the future, need renovations or upgrades to bathrooms, kitchens, or other areas of the house to make living easier? It might be replacing steps with ramps or installing more rails in the bathroom to help with your independent living.
• Do you need help with daily chores such as cleaning and shopping? The government provides services such as the Commonwealth Home Support Programme.
• Are you considering refinancing your home, or using your home equity, to help fund your retirement?

Some of these questions are complex and your decisions could affect your partner, family and anyone you live with. Consider speaking to us before you make big financial decisions.

Downsizing in retirement

There are many reasons you may consider downsizing, including being closer to health services, or if your home needs costly improvements.

Downsizing is also a way to free up cash for your retirement. But it does come with costs and may impact your Age Pension and government benefits.

Maureen and Gary downsize their home

With their five kids out of home, Maureen and Gary were starting to think four bedrooms and a big backyard was more than they wanted to maintain. They worked together to figure out their options. Using online tools and checking in with their super fund and bank, they looked at what they owned and what they might need when they stopped working. After weeks of discussion, they decided to sell their home and buy a smaller apartment with no stairs. Even after transaction costs, they felt they would be in a stronger position and better off financially and emotionally.

If you rent your home

Rent is a big, ongoing expense for many retirees. If you rent your home, think about whether you can afford the rent when you stop working. You may have less income in the future.

If the private rental market is too expensive, there are lower rent options. Community organisations sometimes offer cheaper rooms or units for retirees who do not own their home.

If you receive a Centrelink payment, you might be eligible for Rent Assistance.

For advice about staying in your rented home, contact your state or territory tenants union:

• Australia Capital Territory — Tenants’ Advice Service ACT
• New South Wales — Tenants NSW
• Northern Territory — Darwin Community Legal Service Tenants’ Advice Service
• Queensland — Tenants Queensland
• South Australia — RentRight SA
• Tasmania — Tenants’ Union of Tasmania
• Victoria — Tenants Victoria
• Western Australia — Tenancy WA

If you need help with housing or other support, see get help in retirement.

If you need to move into residential care

Help at home and aged care options

If you need help in your home, or can no longer live independently, the Australian Government provides a range of subsidised aged care services. There are also many privately run retirement homes and villages, but you pay the full amount yourself.

Before you sign up, check all the fees and charges, and how they may increase over time.

If you’re buying a unit in a retirement village, get advice. Make sure they have experience with retirement village contracts and the Retirement Village Code of Practice in the state or territory.

Key takeaways

• If you own your home, consider your wants with your needs – a different lifestyle, close to family, health needs – to free up your capital.
• If you rent, see if you’re eligible for rent assistance and include rent in your budget.
• Create a budget for ongoing household expenses, matching it to your income sources. Remember to include inflation (price rises) of products.
• If you’re looking to downsize, consider the costs involved to make sure you will be financially better off.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/plan-for-your-retirement/your-home-in-retirement
Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.
Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Integrity One Wealth Advisers  Pty Ltd

Integrity One Wealth Advisers  Pty Ltd

If you need help at home, the Australian Government provides a range of care services.

Where to start

The first thing to do is think about what you need. You might want to stay in your own home but need some help with domestic chores. Or you might be ready to start looking at options for longer-term residential care.

Talk to your family or friends about what you want. This will help you get the right care when the time comes.

Once you have an idea of your needs, contact My Aged Care. They will:

• check your eligibility
• assess your care needs
• assess your financial situation

It’s important to plan ahead, as this process can take time. There are waiting lists for some services.

To discuss your options, speak to an Aged Care Specialist Officer (ACSO) at a Services Australia service centre. To make a free face-to-face appointment, call 1800 227 475, Monday to Friday, 8am to 5 pm. Alternatively, you can contact us if you’re not sure where to begin.

Care and help at home

To help you stay in your own home for as long as possible, the government provides subsidised home care. This is to help with everyday tasks like shopping, cooking and transport, as well as with personal and nursing care.

There are two types of home care:

• entry level care — Commonwealth Home Support Programme for people who can manage but need support with a few tasks
• more complex care — Home Care Packages for people who need more support on an ongoing basis

What you pay

Costs for the Commonwealth Home Support program vary depending on the services provider. If you can afford to do so, for Home Care Packages you may have to pay:

• a basic daily fee — a standard amount that everyone has to pay
• an income-tested fee — an amount that will vary depending on your income and assets

If you can’t afford to pay, you may be able to get financial hardship assistance.

Residential aged care

If you can no longer live at home, you may choose to move to an aged care home (sometimes called a nursing home or residential aged care facility). Care is available 24 hours a day. This can be a short-term stay or a permanent move.

What you pay

If you can afford to do so, for government-subsidised aged care homes, you may have to pay:

• a basic daily fee — a standard amount that everyone has to pay
• means-tested fee — an amount that will vary depending on your income and assets
• accommodation payment — an amount for your room, based on its quality, location and features

The accommodation payment can be one of your biggest costs. You can pay this as a:

• bond or lump sum up-front, which is refundable (called a Refundable Accommodation Deposit, or RAD)
• daily amount (called a Daily Accommodation Payment, or DAP)
• combination of RAD and DAP

If you can’t afford to pay, you may be able to get financial hardship assistance.

Selling or keeping your family home

You may be thinking of selling the family home or using the equity in your home to pay the bond (RAD). Or maybe you’re wondering whether it’s better to rent it out to help pay the daily amount (DAP).

You have 28 days after you go into aged care to decide how to pay for your accommodation. You must pay the DAP until the RAD is paid:

• if you decide to pay a RAD within those 28 days, you have 6 months to pay the RAD
• if you decide to pay a RAD after those 28 days, it is due as agreed between you and the provider

You may need professional advice to work out whether selling or renting your home is the best option, so you can contact us for more information.

Either way, be aware that what you choose to do with the family home may affect the Age Pension assets test.

If you sell the home, its value will count towards the Age Pension assets test.

If you rent out the home, its value may count towards the Age Pension assets and income test, depending on when you moved into aged care.

If you keep the home without renting it out, it is exempt from the Age Pension assets test for two years from the date that you moved into aged care. (This may vary if you are, or were, a couple when you moved into aged care.)

Short-term help

Short-term help is available, either in your own home or in an aged care home. There are different types of care:

• transition care (or after-hospital care) — for when you’ve been in hospital and need help with your recovery
• respite care — for when you or your carer needs a break (for a few hours, a few days, or longer)
• short-term restorative care — for when you’ve had a setback and want to get your independence back

Private retirement accommodation

As well as government-subsidised aged care homes, there are many private retirement accommodation options. For this kind of accommodation, you pay the full amount yourself.

The Australian Competition and Consumer Commission has information about types and costs of retirement homes.

As you can see, aged care can be complex, so it is important to seek advice.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/manage-your-money-in-retirement/aged-care
Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.
Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Integrity One Wealth Advisers  Pty Ltd

How your super is affected if your marriage or relationship breaks down.

Overview

If your relationship with your spouse ends, you should be aware of what can happen to the super entitlements of you both.

The Family Court and super-splitting laws generally enable super interests (accounts in super funds) or super payments (pensions or annuities) to be split by agreement or court order if a relationship breaks down.

There are options for splitting super depending on whether you are the member or non-member spouse of the super fund that reports this information to us.

The ATO may be able to provide information to the family courts on the assets of the other party in family law proceedings where there are concerns that they have not fully disclosed.

A spouse is a person who lived with you on a genuine domestic basis in a relationship as a couple (whether of the same or different sex). This includes a de facto relationship – you do not necessarily need to be legally married.

For more detailed legal information on the law that applies to superannuation in a relationship breakdown, see Attorney-General’s Department (search for ‘Superannuation splitting’).

How super is treated

Superannuation is treated as property under the Family Law Act 1975 but differs from other types of property because it’s held in a trust.

Where the super interest can be split under superannuation law and the super fund rules, the parties can finalise their superannuation entitlements and obligations as part of their settlement, rather than waiting until the member spouse retires.

How an interest in a super fund or a super payment will be split between the member and non-member spouses may be specified by a court order or a superannuation agreement negotiated as part of a financial settlement.

Options for splitting super assets

If the fund’s rules allow it, the non-member spouse can open a new super account for themself in the same fund. If not, the fund can transfer or roll over the interest to another fund in the non-member spouse’s name.

If a non-member spouse meets a condition of release, they may be able to access their interest immediately in the form of a super benefit.

The tax-free and taxable components of the super interest or super payment are calculated immediately before the interest split or payment and divided between the split interests or payments in the same proportion.

If an income stream has started

If the member has set up a super income stream that has started to be paid before the relationship breakdown, a super agreement or court order can split the income stream.

In most cases, the income stream would be commuted into a lump sum (due to the governing rules of the fund), and the non-member spouse paid their entitlement under the agreement or court order. The fund would pay the rest to the member spouse either as a lump sum or a reduced super income stream.

If the fund pays the non-member spouse’s entitlement as a super lump sum, they will treat it as a separate lump sum benefit for the non-member spouse. If it is paid as a super income stream, they will treat it as a separate income stream for the non-member spouse.

If the income stream is unable to be commuted, or fully commuted, to a lump sum due to the fund’s governing rules, both spouses will receive an income stream. The split will result in two regular payments from the same income stream – one to the member spouse and one to the non-member spouse.

Transfer balance cap consequences of splitting super

Splitting an income stream can also have transfer balance cap consequences for both the member and non-member spouses. You may need to notify the ATO of a pension split to manage your transfer balance account.

If the member spouse has started to receive a super income stream before the relationship breakdown, a superannuation split can result in the non-member spouse receiving a lump sum amount or a percentage of the member spouse’s superannuation income stream benefits.

Most income streams are in the retirement phase and will count towards the individual’s transfer balance cap. Splitting a retirement phase super income stream can have transfer balance cap consequences for both the member and non-member spouse. This split affects the transfer balance account for both spouses.

If the payment split is achieved by the member spouse fully or partially commuting the income stream to pay the non-member spouse a lump sum amount, a debit will arise in the member’s transfer balance account, the fund will report to the ATO. If the non-member spouse chooses to use that lump sum amount to start a super income stream, a transfer balance credit will arise in the non-member’s transfer balance account, the fund will report to the ATO.

Tax consequences of splitting super

If the non-member spouse creates a new super interest in the member spouse’s fund, any super benefits subsequently taken by the non-member spouse from the new super interest are taxed according to the current rules for member benefits.

The tax consequences of splitting super on a relationship breakdown are:

• super lump sum and income stream payments are taxed to the two parties separately
• the proportion of the taxable and tax-free components in the member spouse’s existing super interest is applied equally to the amount retained by the member spouse and the amount transferred the non-member spouse
• your total super balance is affected by the amount you received (or lost) from the split
  • for the non-member spouse, this may affect your ability to contribute to super in the future
  • for the member spouse, this may bring you under thresholds, allowing you to make further contributions again.

Self-managed super funds

The same options for splitting super apply to members of self-managed super funds (SMSFs). However, SMSF trustees (who are also typically fund members) are also responsible for ensuring the SMSF complies with a superannuation agreement or court order, subject to a member’s directions on what fund their interest is to be rolled over to.

Super splitting and relationship breakdown may mean you need to restructure or wind up your SMSF. The option of continued membership of the SMSF after a relationship breakdown will depend on the SMSF’s trust deed.

Trustees must also ensure the SMSF continues to meet all its legal and reporting obligations while giving effect to a super splitting order or agreement. This includes meeting requirements to implement super splitting imposed on trustees under the Superannuation Industry (Supervision) Act 1993 and its Regulations.

As trustee, you have control over and responsibility for your fund’s investment decisions. You also must manage the fund’s legal responsibilities and always act in the best interests of all members.

Trustees can acquire assets from a related party of a SMSF because of a relationship breakdown

The usual prohibition on acquiring assets from a related party do not apply where the acquisition occurs as a result of the relationship breakdown of a member of the fund.

Visibility of super information for family law proceedings

From 1 April 2022, individuals in current property settlement proceedings can request information from the ATO through the family law courts on their current or former spouse’s super interests. The ATO will disclose this information to the court, which will then provide it to all parties.

This process often results in faster and fairer property settlements.

For more information, feel free to reach out to us.

Source: ato.gov.au
Reproduced with the permission of the Australian Tax Office. This article was originally published on https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/superannuation-and-relationship-breakdown
Important:
This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Integrity One Wealth Advisers  Pty Ltd

Dealing with illness is often unexpected and stressful. Getting emotional and financial support can help you manage.

Here, we explain how you could get additional support.

Work out your medical costs

Medicare

When managing unexpected medical costs, take some time to find out what is covered by Medicare. If you find any of the information confusing to navigate, you can call Medicare for help on 132 011.

Private Health Insurance

If you have private health insurance, contact your insurer to see what is covered, and how much of any cost will be covered. You can also learn more about private health insurance generally.

Smart Tip: The Australian Government’s Medical Costs Finder helps you find and understand costs for general practitioners (GPs) and medical specialist services across Australia.

Make a financial plan

If you need to take time off work, financial assistance may be available. You can contact us if you need to talk about your financial needs and goals

Leave from your employer

Most employees — but not casual employees — have various types of paid leave available. This includes paid sick leave and carer’s leave. You may also have some annual leave, long service leave, and compassionate leave.

If you have used up all your paid leave, you might also be able to take unpaid leave.

Government assistance

If you’re a carer, you may be able to get financial assistance from Centrelink. For more information, see Carer allowance and Carer payment.

Insurance cover

Some insurance policies cover costs related to illness. Check any policies you hold. Importantly, don’t forget to check any insurance you hold through your superannuation fund – you may have insurance through your super that you weren’t aware of.

Types of insurance you may be able to claim are:

Income protection

Income protection replaces some of your income if you can’t work due to injury or illness.

Trauma cover

Trauma cover covers you for specified illnesses or injuries.

Total and Permanent Disability (TPD) cover

TPD cover covers the costs of rehabilitation, debt repayments and the cost of living.

Getting your super early

In addition to insurance that you hold in your super, there are some circumstances where you can access your super, or some of your super, before retirement.

You may be able to access your super if illness or injury stops you from working.

Alternatively, you may be able to apply for compassionate release, to cover specific expenses for you or your dependant if you have no other way to pay.

This includes expenses like:

• medical treatment
• medical transport
• home modifications needed due to disability
• palliative care
• funeral costs
• mortgage payments to stop your home being sold.

Learn more about when you can access your super early.

Important: Stay away from people who say they can help you get your super early for a fee. To ask about getting your super early, you can just call your super fund yourself, for no cost.

Contact us or your super fund if you are unsure.

Get financial support

Redo your budget

Unexpected medical costs mean it’s a good idea to do a new budget. Knowing what you spend your money on can help you find any areas where you might be able to cut back, if possible. You can use our budget planner to set up a new budget.

If you’re feeling overwhelmed, we can or a financial counsellor can help you manage your money during a difficult time. We can help you review your budget, your bills and your debts, and find ways to improve your situation.

Financial counselling is a free and confidential service offered by not-for-profit community organisations.

Dealing with illness can be stressful, especially when it affects you financially. We are always here to help.

Source:
Reproduced with the permission of ASIC’s MoneySmart Team. This article was originally published at https://moneysmart.gov.au/family-and-relationships/dealing-with-illness
Important note: This provides general information and hasn’t taken your circumstances into account.  It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, we do not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, we do not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.  Past performance is not a reliable guide to future returns.
Important
Any information provided by the author detailed above is separate and external to our business and our Licensee. Neither our business nor our Licensee takes any responsibility for any action or any service provided by the author. Any links have been provided with permission for information purposes only and will take you to external websites, which are not connected to our company in any way. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.

Integrity One Wealth Advisers  Pty Ltd

Integrity One Wealth Advisers  Pty Ltd