21 Jan Help for Retirees and Pensioners During COVID
There are a number of measures in place designed to support pensioners and retirees through the COVID-19 crisis. Here is a blog that can help you understand some of those measures, but if your require further assistance it is a great time to book your first appointment with a financial planner from Master Your Money Now.
Social security deeming rates reduced
On top of the deeming rate changes made at the time of the first package, the Government will reduce the deeming rates by a further 0.25% to reflect the latest rate reductions by the RBA. Deeming rates are the way the government calculate how much your personal assets (such as your savings account) will earn over the financial year and whether you qualify for a pension. Deeming rates are designed to put money back into your pocket.
As of 1 May 2020, the lower deeming rate will be 0.25% and the upper deeming rate will be 2.25%.
Pension minimum drawdown rate reduced by 50%
The minimum annual payment for account-based and similar pensions is calculated as a percentage of the account balance as at 1 July each year.
The government has announced that the minimum annual payment will be reduced by 50% for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets.
If you have sufficient cash resources this would mean that fewer assets would need to be sold in your superannuation account now during this time of stock market volatility. Please make sure you contact your financial adviser if you have questions about this option.
Further $750 payment for pensioners
In addition to the $750 stimulus payment for pensioners announced on 12 March 2020, the Government will provide a further $750 payment to social security and veteran income support recipients and eligible concession card holders, except for those who are receiving an income support payment that is eligible to receive the Coronavirus supplement.
This second $750 payment will be made automatically from 13 July 2020 to around 5 million income support recipients and eligible concession cardholders. Around half of those that benefit are pensioners.
Payment of the first $750 payment commenced on the 31 March 2020 to people who will have been on one of the eligible payments any time between 12 March 2020 and 13 April 2020.
Option to apply for a part pension
If you are over Age Pension age and have not been eligible for a Pension due to your asset value being too high, with the current market correction you may find you are eligible to apply for a Part Pension. This may also entitle you to other Government Payments announced in the Stimulus.
Please contact your financial adviser to discuss your circumstances.
Managing your super fund and investment performance
Market volatility is nothing new and the temptation to sell out during significant market corrections is always there. Each person’s circumstances will be unique so if you have questions regarding what action you should or shouldn’t take regarding your investment portfolio, this is definitely a conversation to have with your adviser.
However, it is our overall investment philosophy that during times of volatility it’s more important than ever to refer to your investment strategy and your stick with your plan.
If this is a topic that you would like to discuss in more detail, please get in touch to book in your complimentary 30-minute strategy session.