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Will you be affected by the new pension changes?

10 January 2017 |Wealth

Make it a resolution to check out the changes and exemptions to the asset test … And you could have a happier New Year.

On 1st January 2017, the Australian Government implemented changes to the assets test used to calculate pensions. These changes include imposing new asset limits and will not affect everyone, but there will always be people on the borderline who need to make sure that the new rules do not adversely affect their entitlement to a pension. People who are unsure of how they might be affected in relation to the changes should find out where they stand.

Mandy Cooper, Chief Executive Officer of the Australian Friendly Society said that it is important that people with any doubt about their eligibility under the new assets test regime make sure that they know where they stand if their assets place them close to, or just over the new ceilings after January 1, 2017.

"The first port of call should be the Department of Human Services website, where people can access an asset test estimator. One step people can take to gain an exemption from the assets test is to purchase a Funeral Bond.

"A Funeral Bond is a capital guaranteed product designed to finance funeral expenses and serves to reduce the burden of funeral arrangements and associated costs by allowing people to plan ahead.

"In this financial year, investments of up to $12,500 in a funeral bond such as the Bendigo Funeral Bond, are currently exempt from the Centrelink and the Department of Veterans' Affairs (DVA) Income and Assets Test.

"Funeral bonds are typically bought by people approaching retirement, entering retirement living or nursing care and enable them to preselect and prepay for funeral arrangements by assigning the bond to a funeral director of their choice.

"As well as the income and assets test exemptions from Centrelink and DVA, a funeral bond essentially provides peace of mind for you and the people closest to you at what can be an incredibly stressful and upsetting time" Ms Cooper concluded.

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