However, being over 65, your super benefits are now accessible, so you do not need to wait to withdraw $36,000 (you will need to find the actual figure) and add it to the RAD, so that (a) you can cease those daily payments now and (b) it will be ignored, along with the rest of the RAD, by the pension’s means tests next August.
Make an appointment with Centrelink, who have all your data, to clarify everything.
I suggest that you could best maintain your standard of living – and pay for a car etc – by working longer. Remember that, under the Work Bonus, the income means tests ignore an additional $300 a fortnight of salary after you reach age pension age.
I have read that individuals aged 65-66 this year can contribute to super without needing to pass the work test. A financial adviser from a super company told my brother that this has not yet been legislated. Could you please clarify the situation? H.B.
You can make super contributions up to age 67 without meeting the work test of 40 hours in 30 days.
However, Federal Parliament has not yet passed its 2019 Budget promise to allow those aged 65-66 to make a $300,000 “bring-forward” contribution – three years’ worth of non-concessional contributions. Also note, the concessional cap also rises to $27,500 from July 1, the non-concessional cap to $100,000 and the maximum bring-forward amount to $330,000.
About two-and-a-half years ago, I bought some shares in my wife’s name, who is not working, and was lucky enough to pick a couple of winners. Since then, near the end of each financial year, I have sold some of these shares at a profit, then repurchased them at a higher value, still in my wife’s name. The profit has been below her tax-free threshold and, as she has no other income, she does not pay tax. When we eventually sell the shares (hopefully at a profit) the cost base is now higher and so the tax would be less. Is this strategy allowed by the Australian Taxation Office? M.D.
Much depends on how you answer the question should the ATO quiz you under Part IVA of the Tax Act, introduced in 1981 by then treasurer John Howard.
If you reply saying that the transactions did not have the dominant purpose of obtaining a tax benefit and that you just want to pay GST each time you buy and sell, you might be able to use the higher cost base.
Remember, if the shares are held for more than 12 months, the assessable gain is halved. Why not buy different shares each time?
Addendum: When I suggested in last week’s column that a 17-year-old reader should buy BHP and CBA shares, I should have noted that my super fund invests in those shares.
If you have a question for George Cochrane, send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. Help lines: Australian Financial Complaints Authority, 1800 931 678; Centrelink pensions 13 23 00. All letters answered.
