Four savings you may not know about

SMSF technical expert and columnist for The Australian newspaper
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All retirees are eligible for a wide variety of tax and other concessions. Last week, I mentioned some of these linked to the Commonwealth Senior Health Card, Pensioner Concession Card and Seniors’ Card (read What you’re entitled to in retirement). But there are other some benefits available as well.

This week, let’s look at four additional important concessions. Two of these concessions relate to the Centrelink Benefits, one is a Tax Offset and the fourth is a Victorian Stamp Duty Concession:

1. Clean Energy Advance and Supplement

Anyone eligible for $1 of the Age Pension would have received the Clean Energy Advance in May this year. This once-off payment totalled $250 for a single person and $380 for a couple.

From 20 March 2013, the Clean Energy Supplement will be paid if you receive $1 of the Aged Pension. The precise details of how much this supplement will be haven’t been revealed. It will be paid on 20 March and 20 September each year and will be indexed by movements in the Consumer Price Index before each time it is paid.

2. Work Bonus

The next Age Pension concession – the Work Bonus – concerns income you earn while you continue to work. It applies to Centrelink’s income test only.

From 1 July 2011, the first $250 of employment income each fortnight ($6,500pa) is not counted as income under the income test. Any amount of this $250 accrues in an ‘Employment Income Concession Bank’ or EICB. This EICB can have a maximum value of $6,500 and can be carried forward over financial years, allowing for a continued tax offset. You don’t need to apply for this concession; it will kick in automatically once you’ve reached the age-pension age.

This Work Bonus replaces the Pension Bonus Scheme, which allowed retirees to continue working and defer claiming the Aged Pension. The Pension Bonus Scheme is closed to new applicants if you didn’t qualify for the Aged Pension before 20 September 2009.

3. Mature Age Workers Tax Offset

This concession is available if you were born before 1 July 1957. You shouldn’t confuse this Tax Offset with the Senior Australians Pensioner Tax Offset.

The maximum offset is $500 and you must be aged at least 55 at the end of a financial year to receive this concession.

To receive this concession you must receive net employment income, which includes salary and wages, net business income, reportable fringe benefits and reportable employer super contributions.

4. Victorian Stamp Duty Concession

If you hold a Commonwealth Pensioner Concession Card or the Commonwealth Seniors Health Card on the date a property transaction is settled, then you may be eligible for an important stamp duty concession if the property is purchased at market value and it will be your principal place of residence.

You will receive a full exemption from stamp duty if the property is worth less than $330,000, a partial exemption if the property is worth more than $330,000 and up to $750,000.

These property thresholds apply from 1 July 2011.

Unfortunately, Victoria is the only state to offer this concession. It seems like a good idea given that many retirees seek to downsize their retirement home. Hopefully in time the other states and territories will offer a similar concession.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Anyone should consider the appropriateness of the information in regards to their circumstances.

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