The 2018-19 allowable income and asset thresholds for a full Age Pension are now available.
From 1/7/2018 the allowable income threshold will increase for singles from $168.00 p.f. to $172.00 p.f. For couples the increase is from $300.00 p.f. to $304.00 p.f. Deeming lower limit has increased from $50,200 to $51,200 for singles and from $83,400 to $85,000 for couples.
With asset thresholds the Homeowner threshold has increased from $253,750 to $285,500 for singles and from $380,500 to $387,500 for couples. The Non-Homeowner thresholds have increased from $456,750 to $465,500 for singles and from $583,500 to $594,500 for couples. Funeral Investment exemption from the asset test has increased from $12,750 to $13,000.
The ATO has released SMSF News Alert 2018/3 confirming the unintended consequences of the current law with regards to the commutation of capped DB life expectancy and market-linked pensions. These receive a nil debit on commutation. The ATO will not take compliance action at this stage if a fund does not report the transfer balance cap events of the commutation or commencement of the new market-linked pension. This still does not fix the problem of the lock in of a market-linked pensions that are larger than $1.6m. There are a number of problematic areas of tax and superannuation with no clear guidance from the ATO, especially in the transfer of overseas pension monies area.
It is going to be a very interesting in a few weeks time to watch how administrators and trustees handle the new ATO interpretation for mixed segregated and unsegregated periods for exempt pension income with the 2017-18 financial year. I have a considerable level of apprehensive about this. If you would like to discuss issues to watch out for, please don't hesitate to call me on 03-6224 1145.
Brian Bendzulla