"good afternoon ladies and gentlemen and welcome to the third retirement master class hosted by russell investments my name is martin kennedy on the head of education and i'm presenting to you today from the russell investments office here in melbourne i hope wherever you're joining me from this afternoon that you are safe and well it's rather chilly here in melbourne today now the this afternoon's retirement master class is the third in our series of master classes we've had um a couple of months ago we had one on markets in investing last month was talking about smart strategies in retirement and today we're going to discuss understanding your entitlements we have a special guest presenter who's an expert in understanding the benefits that you might be able to receive from the federal government and uh state governments in retirement we'll get to that shortly first of all um a couple of bits and pieces the presentation itself today will last approximately 20 to 25 minutes depending on you and how many questions that you might have now you might notice as you've joined today's session you are automatically muted helps us cut down on background noise and the like um please don't let that stop you asking a question later on in the presentation i will give you the ability to take yourself off mute if you would like to verbally ask a question alternatively you should see a questions tab there and please feel free at any point during the presentation to type your question i'll see the question i'll acknowledge it either i'll answer it there and then or i might answer it a little bit later in the presentation but please use this opportunity to get all your questions answered now what's important as we work through today's presentation to remember that all the information that we'll go through today is general financial information only that means it hasn't taken into account your personal circumstances of course please consider it in a lot of your personal circumstances before acting on any of the information and if you do need personal financial advice or guidance it is available by calling the fund on 1-800-555-677 today's session is being recorded and in the next day or so we will share a copy of the recording with you we'll go back and clean it up and neaten it up to make sure it is appropriate finally at the end of today's session when we finish there is a very brief five question um survey that we will send to you we'd love to hear feedback of course we always want to make sure that the messages and information that we provide to you are of value to you and we would love to hear your thoughts on how we can make that service or provide this service better to you so today we're going to hear from brendan marnie's i'll introduce brendan uh shortly brendan is going to take us through the age pension some tips and traps he'll talk about the senior australian healthcare card and also about some state-based seniors card again i'll introduce brendan shortly and brendan has a lot of expertise when it comes to taking us through these benefits quickly before i do that i would like to start just by talking about the purpose of super and where our sources of income will come from now generally throughout our working lives or the purpose of super is to provide us an income in retirement to help us live the lifestyle that we want now our sources of income in retirement are likely to come from three main sources the first one being the compulsory super that your employer has contributed towards your retirement savings throughout your working life as we know it's highly regulated and what makes it work is the concessional taxation of that money of course you also have the ability to make voluntary contributions towards your superannuation and take advantage if you like of that same concessionally taxed environment at retirement you may also have some voluntary savings something that you can create an income from whether that be an investment property a share portfolio a family trust or just some money in the bank and finally these are supported by the government age pension and this is what we're going to focus in our discussions today now as i say we have a an expert here to take us through these brendan marnies brendan uh works for our advice partner link advice he's a registered financial advisor and has spoken to many russell investments members over you know his long period of time with a link um brendan is fabulous at breaking down complex um uh i can't even think um complex um in financial information and helping our members that's you understand your entitlements i think uh that's enough from me so brendan you should be off mute now are you able to to hear me there brendan yep thank you martin thanks brendan and uh oh there you go you've popped your camera on thank you i'm gonna turn mine off now just for everyone on the line um as brendan speaks i'm gonna run through the slide so brendan might need to prompt me to do that and say next slide please martin but away we go but thanks brendan over to you for the moment cheers thank you um we'll just go to the first slide next slide so yeah just as martin said uh everything today is general advice uh only so um please if you need financial if you need if you want uh advice that's relevant to your situation you call you can call into russell and they have access to the link advice advisors where you can talk to someone about your personal circumstances but today it's general advice only and we're just going to run through a few of the government entitlements that are available to older australians so as martin pointed out there are three income sources that are [Music] available for the retirement income system just to give you a bit of background on this um the time income review in 2019 found that around 71 of eligible australians at retirement will get some sort of age pension and by the age of 80 around 80 percent will qualify for some sort of benefit that can be a part age pension or a full age pension so the affection is quite important to a lot of people for a number of reasons for that reason whether you get a dollar of it or the full amount um it does help to supplement your retirement income and we'll go through some of the benefits that you can also get as well so um what uh what we've got on the first screen is the that's the full benefit including the energy and pension supplements um if you own your own home uh that's the maximum that you can get and um if you rent you can get additional rent assistance now um i don't really want to talk about the amounts today what i really wanted to go through is some of the tips and traps that are really handy um the items that people who know what have worked in the business for a while can help you with the the basic figures are quite simple to get from the russell zest website uh it's got all that information up there but the broad requirements are first of all you must meet the age requirements and that's uh creeping up to 67 and when it maxes out is for people born uh after the first of january 1967. you've got to wait until you're 67 years old to get the age pension i think it'll gradually increase up to age 70 at some point but that's just my personal opinion um once you've met the age pension sorry once you've met the minimum age requirements you they essentially will then conduct what's uh called means testing there's two types of means tests the first is the asset test now with the asset tests they will look at your full assets that includes personal assets and investment assets with that that testing uh it does take into account your furniture any sort of uh cars goods and channels you may have and your investment assets i'll go into that a bit more detail in the in the tips and traps about how to fill that part of the application out just keep in mind the the asset tests will have two types one for homeowners one for non-homeowners and singles and couples with the income test that only applies to two things that is your financial assets where they'll apply what's called the deeming rate and that's a government rate um that's determined um in conjunction with i think it's the uh they look at the interest rates that are coming out and they set it to that now with that it's the government doesn't actually care about what you're getting on your investments it just assumes that you're getting that rate and it'll also apply to any income you may earn from work and it also applies to your spouse as well so a lot of people uh just need to be wary of whatever your spouse is earning will also apply to yourself the other one that doesn't come up very often is the residency requirement so you are required to have 10 years of permanent residency in australia before you apply uh it can be a bit of a problem if you lived overseas but with that um it's better to talk to someone if you think that might be an issue beforehand we'll go to the next slide please martin okay uh this is where i really want to spend a bit more time just going through the tips and traps around getting the age pension and making your application now the important thing to note with this is um with gifting it's a good way to help out your loved ones or a charity that you like but you need to be really careful of the limits the limits are ten thousand dollars in any one year or up to thirty thousand dollars in a over a five year period with the gifting rules a lot of people use them to reduce their asset level and that's if you're around the the maximum assets it can help um sometimes people who are close to the edge can gift thirty thousand dollars and start to get um a part-age pension uh which takes me to the next point with the part age pension this is a really good rule as well by the way um even if you get one dollar you still get all of the other concessions and entitlements and we've estimated that's around two thousand dollars worth of value uh you get the lower cost of pharmaceuticals you also get a lower cost of utilities and um you also get sometimes the government will will provide some extra payments as well which i'll get into later um we'll go to the next point back dating of the um application is important so with this two things you need to know um it doesn't matter when you became eligible what's important is when you lodge your completed claim now it might take centerlink or department of human services two to four weeks sometimes even longer to process your claim but as long as you lodged it on that date they will back date the payment to the day you lodged it so really important if you are eligible um start filling the form out straight away and lodge it as soon as possible let's go to the next one uh timing of work is important as well so you can apply as soon as you stop working and you've retired um in fact you can apply before you stop working if your income is is low and you meet the income test a lot of people think they have to wait until they get all their payments or they have to wait till the new financial year or the new calendar year that's not the case as soon as you stop working you can go in there and apply if you're eligible and you meet all the other requirements with the deeming rate um and this is this is something that i see people doing um every now and then they really worry about their income return and they'll sometimes put their investments into something that's not performing worrying that their age pension might be infected um with the deeming rate what actually applies is what the government sets and those dealing rates are quite low because interest rates are low at the moment so people who might have share investments that are performing a little bit better the government doesn't really worry about that because it just applies that same rate to all investments across the board it's just much easier for them to manage it that way so if you're getting a little bit extra uh over and above the deeming rate that's just a bonus to you it also works the other way around so if you're getting a little bit less than the diving rate then that's a negative um for you because the government assumes that you're making that that level of income when you're not so yeah definitely be aware of that when you when you're investing your funds um this is it uh sheltering is a strategy that we use and where it comes in handy is for couples who um might not be able to get the age pension due to their asset levels what we do um and please don't take this is personal advice what we'll do is if there's a younger spouse shifting assets into the young spouse's um superannuation account uh does not count until the until they become eligible for the age pension so quite often um if you can pick up two or three years of an age pension benefit uh that can that can quite um add up to quite a bit uh let's go to the next one uh the pension work bonus now this is it used to be a lot more generous than this but for a single person uh you can get around seven thousand 7 800 if you are eligible for the age pension and you continue working and the government does that because it wants people to work longer so it actually so they have to pay you less over time so it's a bit of an incentive for older australians to continue working definitely worth looking at and if you're in a couple you get double that amount if both of you continue working now value of personal assets this is something that um comes up quite a bit uh because people will fill out their uh the form when it was paper-based it was 26 pages so a lot of people get really really um confused with with the form but um when filling out your personal assets the government um the instruction is to put the market value of your assets it doesn't actually define what market value is so they put in their insured or replacement value um the the rule that we use or that can apply is market value is whatever you can get if you put all of your furniture and everything out on the front lawn and you try to sell it on that day and as you can imagine that'll be substantially less than what um the replacement value is but that's really important for people who are having issues with the asset test because an extra 50 the to 100 000 in personal assets can make quite a bit of difference to your outcome i've got the next point uh with debt um some people think that uh any debt that they might hold on a credit card or a home loan will net out um with their assets but it actually doesn't and what we're seeing um a bit lately is people retiring with home loans and um what you know they kind of think is if they've got fifty thousand dollars on their home loan uh it'll net out whatever they've got in super but that's not the case so you just have to be aware of that and the other thing is of course you're also paying interest on that debt as well now with the application it's quite a process there are places that can help you with that and we are looking at that at link advice but um with with the application it does take a few attempts it's generally good to make sure that you've got everything you need with you as i said it's a 26-page process on the old paper-based forms you can apply through the mygov website make sure that before you apply you've got everything there with you because they will ask a lot of questions so having your financial statements ready proof of identity documents um and your residency information if you've lived abroad um with the age pension application this is one that not a lot of people are aware of as well um if you're working and you intend to you know your retirement date or if you're not working but you know uh you're eligible by age on a certain point you can apply 13 weeks before you reach your eligibility so by starting early it just means that you get your benefit payment from day one so the day you turn 65 and sorry 66 and a half or whatever it is your eligibility age is you get your age pension entitlement straight away rather than waiting for a while and then applying um just to let you know about that delay in the application process we we ran a survey earlier this year we we asked 900 people about the age pension application process and just over half of them delayed the age pension application by over three months so that's um you know quite a substantial cost uh around 15 percent delayed by over a year so that was a year that they could have been getting the age pension but they funded their retirement using their own money so delays is quite common um it just does it ends up costing you quite a bit we estimated it was around seven it could be up to 72 thousand dollars the cost um of delay so i was moved to the senior australian healthcare card um now this is a card for people who aren't eligible for the age pension um it is uh available with through an income test and it's quite generous it's got the amounts there on the screen that you can see um 57 000 if you're single 96 000 for a couple 115 000 if you're a couple separated by illness so in order to generate that type of income through an asset um you'd be doing pretty well now it is developed you need to be adventure and age or older meet the residency requirements and not getting any other sort of centrelink or department of veterans affairs benefit and you need to similar to the age pension um you need to have your document your identity requirements but you also need to have a tax file number or a big exempt from doing so let's go to the next slide martin oh sorry i thought i had the benefits there but the thing is uh yes it is um so the benefits of the senior healthcare card is access to cheaper medicine that can be quite substantial on its own because you're not going to be paying the full price you pay a flat fee for that um you also get access to bulk billing um up to a certain level you get access to the medicare safety net and what people don't also uh what's less known is with the senior australian healthcare card you also get the economic supplements as well now over the last two years that was around a thousand dollars per person or two thousand dollars for a couple and that's you know it's a very simple process to apply for this card it's not as onerous as the age pension but getting that kind of benefit um for you know a two three hour exercise i think it's definitely worth two grand um definitely worth applying for uh so let's go back one slow martin yep um you get you do get other benefits as well it's just worth um checking on um you can get you to lower utility costs uh lower dental ambulance and public transport as well so there are some other ancillary benefits but i think the main ones are at the top there and quite worth applying for um let's go to the state based cards now please okay um now each state has its own uh seniors card they vary quite a bit from state to state um to give an example um new south wales allows uh we've got two i'm from new south wales we've got two seniors cards um one for people working over 20 hours and one for people working under 20 hours so in in some states um you just need to to look at that variation for example northern territory has no work test but if you are eligible for those seniors stacked by seniors cards um you do get quite a few benefits i i think they're a really handy travel companion because they have reciprocal uh rights across states so if you're traveling around and you can see when you go on the website they do encourage travel um i think when i when i look at different state-based websites they're actually advertising for people from other states to come and visit that state um you do get the uh the the different travel benefits through places um a lot of it's uh areas like different types of hotels and you also get different benefits from different retailers as well so for example i was in maya the other day and i noticed that the cashier they had a sign saying you know if you show your seniors card you get a discount but you had to produce it and it didn't say something tasmanian at the moment on holiday but it didn't say it had to be a tasmanian senior's card it just said a senior's card so getting discounts at different commercial uh or retailers is handy as well as also the the travel if you go to the websites you'll see a lot of retailers there offering discounts to people who hold seniors cards definitely um a benefit worth applying for and not not a terribly difficult application either it's just based on residency so that's the um that's the presentation for today a lot of this is on the russell zest website if you go there you'll see all the tips and traps as well as some of the payments and some background information about the age pension so definitely worth looking at the website if you have time thank you wonderful um brendan thank you so much for for sharing your expertise as you um you kind of let the cat out of the bag too that that um you've taken some time out of your holiday to to share your expertise with us i'm sure it's nice and warm in in tassie at the moment but really appreciate your time and certain that our members also really appreciate it i think um the the biggest thing um to probably take out of all that is that there are lots of info lots of detailed information and lots of exceptional circumstances and things to be aware of that that most of us will simply not be aware of and i can see already a couple of questions have come in that we'll get to in a moment um as brendan has said there's a fact sheet there um for you to access so you can go and see all these limits and have an idea to do that you will need to also register for zest and zest is your feel-good guide for supra and retirement where you can control the information that you receive from the superannuation fund traditionally superannuation funds will produce a magazine or a long email and it might be 60 pages with only very little relevance for you the beauty of zesty is that allows you to control the information that you receive from the superannuation fund making sure it is accurate and useful for you now most importantly as i said and as brendan highlighted there are lots of unique details here that you as members of this fund have access to and if you would like to discuss your personal circumstances as brendan said and i said um you know all the information in this presentation was general financial advice as members of the fund though you have the ability to speak to a fully qualified financial advisor like brendan who can take into account your personal circumstances and help you work through and find out any entitlements that you may be eligible to to do that all you need to do is pick up the phone and call us 1-800-555-677 which actually brings us very much to the end of our presentation because with any questions no matter what your question is the one place to go is to pick up the phone and call whether it's just help getting online general questions about your super or pension and certainly if you would like the phone based personal advice don't be shy pick up the phone and call us 1-800-555-67 again brendan thank you very much for your time i'm going to uh shoot a couple of questions shortly with which we'll acknowledge find two last things just before we do again when we finish the session or when you leave the session look at a new pop-up window just asking for your feedback and thoughts we like to make sure that the information that we provide to you is useful and valuable finally before we get to that i again need to highlight that all the information in today's session is general financial information only that means it hasn't taken into account your personal circumstances please consider it in light of your circumstances before acting on any of the information and if you do require personal financial advice or guidance it is available by calling the fund on first of all 1-800-5555 you very much for your time this afternoon i do hope there has been some value in this for you"