If there was ever any doubt about the Government’s intention to have us work longer, July 1 should put an end to that.
The date is going to herald a raft of changes which effectively add another year to the working lives of anyone born after 1952.
First up is an increase to the age pension eligibility age. From Saturday week, both males and females will need to be 65 1/2 to qualify. Increasing by six months every two years, the eligibility age will be 67 for anyone born after Jan 1, 1957.
While rumblings of a further rise continue to emanate from Canberra, the 2014 Budget bid to increase the qualifying age to 70 was defeated in the Senate and at this stage, there appears to be no serious move to reintroduce it.
The shift in age pension eligibility age also means an increase in the eligibility age for the Commonwealth Seniors Health Card (CSHC) and the Senior Australians and Pensioners Tax Offset.
The offset is a tax credit of up to $2230 that can reduce or wipe out your tax liability. For 2016-17, single seniors can effectively earn $32,279 before paying tax and couples a combined $57,948, assuming both are eligible. These limits will increase on July 1.
Remember that withdrawals from super and account-based pensions are exempt from tax and do not count towards this total. The CSHC thresholds of $52,796 for singles and $84,4782 combined for couples will increase on September 20.
The State Seniors Card eligibility age also increases on July 1. You’ll need to be 62 years and working less than 25 hours a week to claim this card, which provides access to discounts on utilities, public transport and private businesses. There’s no means test associated with this card.
When combined with the CSHC, WA seniors enjoy the same discounts and concessions linked to the Pensioner Concession Card which is issued to anyone receiving a full or part age pension.
The superannuation preservation age increases from Saturday week to 57. This is the age that we can access super for retirement purposes and since last year, has been increasing each year by a year.
Anyone born after June 30 1964, will now need to be 60 to access super.
This increase also affects the age you can begin a transition to retirement strategy, where you drawn down up to 10 per cent of your super each year while still working.
The strategy has been used to accelerate loan repayments on debt that isn’t tax deductible and or big debts. The strategy can be combined with increased salary sacrifice contributions to produce a lower total net tax position.
To withdraw superannuation benefits directly between 57 and 60, you’ll need to be retired with no intention of returning to work.
The West Australian 19 June 2017