You are required to provide calculations for the means test (asset and the Income test) and use this to suggest old age pension eligibility.
Assume: You are a financial adviser and are approached by a married couple, Tom, and Rita Brown. Both are 71 years old and Australian citizens by birth. While they live in Melbourne, their only son who is financially independent lives in Canberra. The following information is an extract of data you gathered as part of the fact-finding exercise during an initial client consultation with them:
The couple has approached you to find out if they are eligible for age pension. list of assets for the current financial year
|
Assets |
Amounts |
Income |
|
Home (Principal Residence) |
$700,000.00 |
|
|
Home Contents and Cars |
$57,000.00 |
|
|
Investment Property- net rental income of $7,000 |
$255,000.00 |
17,000.00 |
|
Bank account- interest Rate of 2% |
50,000.00 |
1,000.00 |
|
Shares Portfolio |
341,000.00 |
11,935.00 |
You are required to provide calculations for the means test (asset and the Income test) and use this to suggest old age pension eligibility.
Calculation of Total assets test of the Tom and Rita brown:
Home (Principal Residence) $700,000.00
Home Contents and Cars $57,000.00
Investment Property-
net rental income of $7,000 $255,000.00
$1012000.00
Income test of a person's:
Bank interest income $1000.00
($50000*2%)
Share portfolio income. $11935.00
$12935.00
$12935÷12=$1077.91 per month
The couple's total assets are $10,12,000, which is less than the $1.078 million asset criterion for a single individual. This qualifies them for the old-age pension. They'll get $1077.91 per month.
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