Ian is 60 years old, earns a full-time salary of $100,000 pa and has $300,000 invested in super. He wants to boost his retirement savings in a tax-effective manner, but he doesn’t want to reduce his after-tax income. Currently Ian is paying $26,447* in income tax – giving him an after-tax income of $73,553.
Income Maintenance Period (IMP)
The IMP applies to all non-aged pension income support payments except Carers Payment. Centrelink will assess your leave payments (annual and long service leave) and the gross amount of the redundancy payment (including any tax free portion) as if received on a fortnightly basis. This income will likely reduce your benefit entitlements (possibly to nil) for the relevant period.
Liquid Assets Waiting Period (LAWP)
Liquid assets include cash, shares and other financial investments that are readily converted to cash. Liquid assets do not include super benefits or, for example, land. The LAWP is calculated differently depending on whether you’re single or a member of a couple or have a child.
When George left work he had liquid assets of $16,000. George is single with no dependent children.
Andrew, a widower, has two children, Sally and Darryl. He was on excellent terms with Sally but in later years, his relationship with Darryl had begun to deteriorate.
When Andrew suffered a stroke he was unable to take care of his own finances. He hadn’t appointed anybody as his attorney to take over on his behalf.
Rowan was a chartered accountant in a partnership that audited a particular large trading company. The audit area failed to detect some significant fraud committed by the company principals. When the company went into liquidation, an action was commenced against Rowan’s partnership for damages.
Rosemary was a successful dentist. She and her husband, Tom, had three young children. Tom, a freelance journalist, worked part-time, spending most of his time with the kids and keeping the house going. This arrangement worked well.