"A goal without a plan is just a wish" - Antoine de Saint-Exupery
Kerrianne Hebinger
Financial Planning Essentials
w: www.finplans.com
Thursday, 22 September 2011
You can make a difference
The arrival of each new day brings opportunities to brighten your world.
Caring for Older Australians
At the instigation of Nick Sherry, the assistant Treasurer, an inquiry has been held to consider what reforms may be necessary to meet the many challenges of supporting Australia's ageing and diverse population.
"These key points were released with the Caring for Older Australians inquiry report on 8 August 2011.
"These key points were released with the Caring for Older Australians inquiry report on 8 August 2011.
Over one million older Australians receive aged care services. The range and quality of these services have improved over past decades, but more needs to be done.
Future challenges include the increasing numbers and expectations of older people, a relative fall in the number of informal carers, and the need for more workers. By 2050, over 3.5 million Australians are expected to use aged care services each year.
The aged care system suffers key weaknesses. It is difficult to navigate. Services are limited, as is consumer choice. Quality is variable. Coverage of needs, pricing, subsidies and user co-contributions are inconsistent or inequitable. Workforce shortages are exacerbated by low wages and some workers have insufficient skills.
The Commission’s proposals address these weaknesses and challenges and aim to deliver higher quality care. The focus is on the wellbeing of older Australians — promoting their independence, giving them choice and retaining their community engagement. Under this integrated package of reforms, older Australians would:
- be able to contact a simplified ‘gateway’ for: easily understood information; an assessment of their care needs and their financial capacity to contribute to the cost of their care; an entitlement to approved aged care services; and for care coordination — all in their region receive aged care services that address their individual needs, with an emphasis on reablement where feasible
- choose whether to receive care at home, and choose their approved provider
- contribute, in part, to their costs of care (with a maximum lifetime limit) and meet their accommodation and living expenses (with safety nets for those of limited means)
- have access to a government-sponsored line of credit (the Australian Aged Care Home Credit scheme), to help meet their care and accommodation expenses without having to sell their home. A person’s spouse, or other ‘protected person’ would be able to continue living in that home when an older person moved into residential care
- choose to pay either a periodic charge or a bond for residential care accommodation
- if they wish to sell their home, retain their Age Pension by investing the sale proceeds in an Australian Age Pensioners Savings Account
- have direct access to low intensity community support services
- be able to choose whether to purchase additional services and higher quality accommodation.
Safety and quality standards would be retained. An Australian Aged Care Commission would be responsible for quality and accreditation; and would transparently recommend efficient prices to the Government"
The entire report can be found at http://www.pc.gov.au/
Productivity Commission 2011, Caring for Older Australians: Overview, Report No. 53, Final Inquiry Report, Canberra
Kerrianne Hebinger;
Financial Planning Essentials
Death - an expensive option
Without doubt, the laws surrounding Superannuation have numerous grey areas, and even after a couple of decades there continues to be debate over many aspects.
In July, the Australian Tax Office (ATO) released its view on when a superannuation income stream (a pension) commences and ceases. It would seem a fairly simple topic, but thanks to Capital Gains Tax and the tax free environment most pensions live in, it is now a hotly contested issue.
In its simplest form - the ATO have formed the view that as soon as you die, then you no longer can be paid your pension, and it also ceases. The big kicker here will be for those individuals with assets in super they've held for a reasonable period of time. Those assets will lose their tax free status prior to being paid out to a beneficiary, and will be assessable for Capital Gains Tax. So the next generation will potentially be poorer, and the Government coffers will be a happier place.
To add insult to injury, they are also considering back dating this practice to 2007 - so if a pension has ceased and been paid out in the last 4 years, then there is some form of pain in the future in the form of administrative burden and additional tax.
Now, in defence of the Tax Office, they are merely the messengers. They can only interpret, and apply, the law that is written - they don't make the mess in the first place. At this stage this is only their preliminary view, there is room for debate, and many of the professional bodies have taken up the call.
I'll let you know what the final position is - in the meantime pop it under your hat for consideration.
Financial Planning Essentials
w: www.finplans.com.au
Where has all the Money Gone?
Join us at Southport Yacht Club, Gold Coast on the 13th October 2011 at 6.15pm.
Financial Planning Essentials
w: www.finplans.com.au
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