Couples can also contribute $600,000 to their superannuation for the same home, doubling the benefit. The downsizer contribution won't affect contribution caps, attracting tempting tax breaks. As for the downsizer age requirement, the new legislation has decreased it from 65 to 60 years since the first of July.
Downsizer contributions to superannuation
If you decide to downsize and you're aged over 55, you can contribute up to $300,000 of the sale of your existing home into your super provided you have owned your home for at least 10 years.
The Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Act 2022 will benefit thousands of pensioners and other income support recipients each year – including eligible Veteran entitlement recipients – by reducing the impact of selling and buying a new family home on income support ...
If you have reached the eligible age, you may be able to contribute up to $300,000 from the proceeds of the sale (or part sale) of your home into your superannuation fund. The eligible age is as follows: From 1 January 2023, 55 years old or older.
It will extend the asset test exemption for eligible people who downsize their home from up to 12 months to up to 24 months. A further extension of up to 12 months is available in special circumstances, such as building delays because of a natural disaster. This gives a total exemption of up to 36 months.
Changes in Home Value and Its Effect on Pension Payments
The Asset Value Limit for single homeowners receiving full age pension is $280,000.
This would affect the results of both the income and asset tests. Depending on the amounts involved, you could put your assets over the maximum threshold for benefits and may lose your pension entitlement.
From January 1, 2023, people aged 55 or older can make a downsizer contribution to their superannuation of up to $300,000 ($600,000 per couple) from the proceeds of selling their home. It is a tax-free contribution that can be made in addition to any concessional and non-concessional contributions.
The downsizer rules are a one-time-only concession and you can't access them again for the sale of a second home, or for the sale of a remaining interest in the property. You must make your contribution into your super account within 90 days of settling your property sale.
“There are many direct benefits that older Australians will receive in their wallets out of this year's budget including energy relief of up to $500 per year, cheaper medicines, more GPs bulk billing pensioners and healthcare card holders without a co-payment, $15 a week more rent assistance, $20 a week more in ...
The $4,000 boost will be available until 31 December 2023, after initially being flagged to remain in place only until the end of this current financial year. Key points: Eligible pensioners will receive a one-off $4,000 boost to Work Bonus balances from 1 December, 2022.
The government will provide $3.7 million in 2023–24 to extend the measure to provide age and veteran pensioners a once-off credit of $4,000 to their Work Bonus income bank and temporarily increase the maximum income bank until 31 December 2023.
Selling your home when you retire may affect any income support payments you get, including the Age Pension.
Although the sale proceeds are exempt under the assets test, the value is considered to be a financial investment and deemed income is assessed. Details Centrelink will ask for when you sell and purchase a home: Settlement letter of both the sale and then the purchase.
Stamp Duty.
But the government's proposed tax incentives include a one-off exemption from stamp duty for elderly citizens purchasing a smaller property. On a NSW property worth $500,000, that's a saving of $17,990.
From 1 January 2023, if you're aged 55 years or older you may be eligible to make a downsizer contribution of up to $300,000 to a complying super fund (all BT superannuation funds will accept eligible downsizer contributions, unless you are in a defined benefit fund), from the proceeds of the sale of your primary ...
Yes, you can put an inheritance into superannuation. However, there are limits on how much of the inheritance you can put into superannuation. You also need to consider the type of contribution that should be made to super. In Australia, once you receive an inheritance, it becomes your money.
The maximum you can contribute is $300,000 or the sale price of your home, whichever is less. You may make more than one contribution, but the total must not exceed this maximum.
The Cons of Downsizing
You may have less space or opportunity for hobbies – gardening, for example, and you won't have as much room for having guests to stay. Leaving London may sound appealing, but you'll need to adjust to having far fewer amenities on your doorstep.
Employment and the Age Pension
Under the Work Bonus, you can earn up to $300 of employment income a fortnight – or $7,800 a year – without reducing your pension. The $300 is on top of the money you can earn each fortnight ($190 if you're single, or $336 if you're in a couple) before affecting your Age Pension payments.
It is your responsibility to update Centrelink if there are changes in your assets or income. Many people believe Centrelink has access to your bank account and will take it into consideration for your payment rate. This isn't true. Centrelink can't access your bank accounts to determine up to date figures.
Full Age Pension income threshold increases by: Singles threshold $204 per fortnight, increase is $14 per fortnight, $364 per annum. Couples threshold $360 per fortnight, increase is $24 per fortnight, $624 per annum.
It comes down to the amount of savings you already have, plus all sorts of asset types combined. For example, if you are a single homeowner you can get a full pension with an asset limit of $270,500. As a couple with a home and combined assets your limit is reached at $405,000 to receive a full pension.