The new financial year always brings change, and 2019/20 is one of the more dynamic in recent times. An array of rates and thresholds have moved, but the first week of this July brings more than just incremental changes. A number of rules affecting the clients of financial planners are markedly different in the new financial year. This month there are a dozen of these changes that planners need to know about;
3. Pension Loans Scheme grows teeth
The Pension Loans Scheme (PLS) is a Government-run reverse mortgage facility for social security recipients. The pensioner uses their Australian property as security for a loan provided by the federal Government. The loan is paid to the pensioner in the form of increased social security pension payments. Interest is charged on the loan at a rate set by the Government and the loan and interest is usually repaid when the property is sold or the pensioner dies.
From July 1, 2019, the PLS becomes available to both full pensioners, and those ruled ineligible by both the income and assets tests. Whereas previously the maximum fortnightly payments that could be made were 100 per cent of maximum amount of the recipient’s social security payment, this threshold is now increased to 150 per cent. This means that full pensioners can supplement their income with PLS payments, not just part pensioners.
The information contained in this publication is based on the understanding KeyInvest (ABN 74 087 649 474 AFSL No. 240667) has of the relevant Australian legislation as at the date shown in this publication.
The information contained in this publication is of a general nature only and is intended for use by financial advisers and other licensed professionals only. It must not be handed to clients for their keeping nor can any copies of sections of this publication be given to clients. KeyInvest is not a registered tax agent under the Tax Agent Services Act 2009. We recommend that your client be referred to their registered tax agent or legal adviser prior to implementing any recommendations that you may make based on the information contained in this publication.