Retirees, many of them SMSF members, are in danger of missing out on their valuable Commonwealth Seniors Health Card (CSHC) benefits following legislation that was part of the Federal Government’s Budget package, says Olivia Long, CEO of Xpress Super and SuperGuardian, the specialist self-managed super
fund (SMSF) administrator.
“From 1 January 2015 the new deeming rules mean that Account Based Pensions started after this date will be assessed differently when determining an individual’s eligibility to receive the CSHC. It is something SMSFs must be vigilant about,” says Ms Long.
She was commenting on the new Government legislation that will see deeming rules applied to the Income Test for income from account-based superannuation income streams from 1 January 2015.
“Account-based superannuation income streams started before 31 December 2014 may be entitled to
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grandfathering provisions, where payments are assessed concessionally. Retirees need to be careful because if a pension is ‘reset’ via a stop and restart then this is considered a new pension and grandfathering is lost.
“Not many people realise that if eligibility for the card is lost, even for a short period of time, the grandfathering for all the Account Based Pension is lost,” she said. “This can occur even if a person travels overseas for just six weeks.”
Ms Long says that it is important that SMSF trustees who have transferred most of their assets into their super fund should now review how they are structured.
About SuperGuardian, Xpress Super
SuperGuardian is a Chartered Accounting firm and specialist self-managed super fund (SMSF) Administrator, with more than 12 years industry experience.
XpressConvert is a business owned by Jaquillard Minns Chartered Accountants.
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Simrita Virk at Shed Media
M: 0434 531 172