We have had enduring powers of attorney drawn up by a lawyer and had insisted he add the conflict of interest clause as we had read your advice in your column some time ago. We are both mature and live in a house that would be difficult to maintain if one of us had to go into care, if mentally incapacitated. We are on an age pension so not very financial and were concerned that the one left in the home wouldn't be able to afford to downsize. Is there anything detrimental by our having added this clause? We trust each other to do the right thing by the other.
The standard enduring power of attorney document (EPA) does not allow the attorney to do anything that may create a conflict of interest between the attorney and the donor, nor does it allow the attorney to profit or benefit by use of the power of attorney, unless authorised at law or if allowed in the power. These can cause problems when the holder of the EPA is the logical person to transfer assets to. The way out of these dilemmas is to anticipate them, and insert an "authorised conflict" clause in the document, provided there is total trust between the donor and the attorney. This negates the no conflict clause in the standard EPA.
A solicitor who specialises in elder law says in a long and a first marriage, there is little downside and much more upside, in having the conflict clause, especially where you combine it with having the financial power to start immediately, as opposed to taking effect only on the incapacity of either of them. It just makes later life easier, especially in a time of increasing complexity.
Earlier this year my father-in-law had his pension cancelled and with it his health care card. He is 99 next month and has worked and paid tax all his life. In the July 26 issue of Money, you wrote that a departmental spokesman said that the PCC would be reinstated to about 92,000 former recipients from October 9. It would be automatically reissued. My father-in-law has not received a PCC or any information about it. Could you please find out what is happening?
As announced in the 2017-18 federal budget, the Australian government restored the Pensioner Concession Card to people who stopped being eligible for a pension payment on January 1, 2017, due to the rebalancing of the assets test change. This change means people may be able to regain access to certain discounts and concessions offered by states, territories, and private providers that were not available on the other assigned concession cards. The reinstatement does not apply to those who lost eligibility for the card after January 1, 2017, unless the cancellation date was retrospectively applied to January 1. From October 9, 2017, the Department of Human Services reinstated the Pensioner Concession Card to about 92,300 former social security and Department of Veterans' Affairs recipients. The department wrote to eligible cardholders in September 2017 to notify that they would soon receive the reinstated card in the mail from October 9, allowing up to 14 days to arrive. People did not have to do anything to receive the Pensioner Concession Card, this was automatically mailed to eligible recipients, and all cards have now been issued. Anyone concerned they may not have yet received their card can use their Centrelink online account through myGov to view their concession or health care cards, or call the Older Australians line on 132 300. People can also use the Digital Wallet feature on their Express Plus Centrelink mobile app to check which concession cards they've been issued.
I am 71 and single with an untouched super account of only $23,000. I get a fortnightly pension of $425, and have a rental property worth $350,000, which returns $350 a week. I own my home worth $350,000 and other personal assets of $50,000. Do Centrelink expect me to make withdrawals from my super to live on or are they already allowing for that in my payment from them? Also, can I withdraw total super and re-invest without penalty?
Based on the information you appear to be asset tested so I suggest your first task would be to look at those personal assets of $50,000 and see if their value could be reduced. Remember, the valuation for Centrelink purposes is secondhand value as if sold in a garage sale. Even a reduction of $10,000 in those assets could see an increase in your pension of $30 a fortnight. The value of your superannuation is being taken into account now, and while there is no requirement to withdraw it, there would be no adverse effects on your pension if you did. In fact, you should save the fees that go with all superannuation funds
We would like to give one of our investment properties to my adult son and his wife. It will be their first home and they will pay the leftover mortgage of $310,000. We bought the house 13 years ago for $450,000 and it is now worth $900,000. My wife and I are both working full-time and are aged 62 and 60. Even though it will be a gift how much tax we will have to pay and/or how much tax will they have to pay?
There is no gift tax in Australia but you will be liable for capital gains tax on the difference between the base cost, which includes capital expenses since purchase, and the transfer value. I guess this will come to about $400,000 which means that after application of the 50 per cent discount the net capital gain will be $200,000 which will be apportioned $100,000 to each of you. Just keep in mind that the Tax Office will require a valuation of the property to ensure it is being transferred at market value. Your children will be liable for stamp duty and transfer fees but they may be eligible for a concession as this is their first home.
Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature. Readers should seek their own professional advice before making decisions. Twitter: @noelwhittaker