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By Mark Gleeson, Senior Technical Services Manager
TechConnect’s quick and easy to use calculators are one of the most popular resources on the Fast Fact Finder website. In this article, we explore how our tools can assist you to plan many client situations including Age Pension, Aged Care fees, lump sum disability super benefits, transition to retirement , the low income health care card and many more.
We designed the Fast Fact Finder (FFF) website because we love two things – alliteration and facts. The FFF is your go-to for all things technical and is designed to help you stay on top of legislative changes, developments and strategies. The online FFF is mobile and tablet enabled so you can use it wherever you need it. We provide a wide range of technical support tools, including:
You can use our Pension (and Pension Bonus Scheme ‘PBS’) calculator to estimate a client’s Age Pension entitlement. The calculator is handy to identify Centrelink payments before and after a strategy. For example, you can use the calculator to identify the impact on Age Pension if rolling over a grandfathered account-based pension. There are no new registration for the PBS but clients already registered in the scheme may receive a lump sum bonus payment.
In addition to age pension, the calculator also estimates disability support pension, carer payment, DVA service pension, DVA war widow pension and income support supplement. If you want to estimate jobseeker payment, family tax benefits and other payments, use Services Australia’s online rate estimator.
We update the calculator as soon as possible after 20 March, 1 July, 20 September and 31 December so that you can access the updated calculator very shortly after figures change. A great feature of this intuitive calculator is that you need just a handful of inputs to estimate the pension payable. This means the calculator can be used as a sales tool by providing a quick calculation to the client of likely social security benefits. You can also identify if the client is assets tested or income tested by viewing the underlying calculations – this aids your strategy development.
The Aged Care and Pension calculator estimates the fees and charges for a new entrant into an Aged Care facility.
Manual calculations of the means tested care fee are difficult because there is an income tested component and asset tested component followed by a reduction of the maximum accommodation supplement. The calculator dispenses with the need for manual calculations and provides an estimate of the means tested care fee. The amount of the basic daily care fee is also provided and allows you to estimate the total fees payable for an aged care client.
Due to the impact of social security payments on the means tested care fee, the calculator also estimates Age Pension entitlements. If you only wish to calculate Age Pension only (and not Aged Care fees), use the Pension and PBS calculator outlined above. The Aged Care and Pension calculator is not designed for existing residents or home care clients.
If you are seeking to build your aged care knowledge, we have various Strategy Guides on FFF. You can also contact the tech team via phone or email to discuss a client query.
This calculator establishes the taxable and tax-free components when a client with a permanent incapacity rolls over or cashes out a superannuation disability benefit.
There is a legislated formula to increase the tax-free component of a benefit when a client is permanently incapacitated and provides two medical certificates to the trustee. Manual calculations of the tax- free boost are tedious because you must identify periods of time in specific days and so mistakes are common. The calculator provides a quick estimate of the tax-free boost with only a handful of inputs.
If you are considering a transition to retirement (TTR) pension in combination with salary sacrifice, you can use our purpose-built calculator.
Similar to the Pension (and PBS) calculator, this calculator can be used as a sales tool by illustrating the potential benefits of a TTR strategy to a prospective client. By entering just a handful of inputs, you can identify the net benefit of the strategy based on certain assumptions.
Although the earnings within a TTR pension are taxed at a maximum of 15% in the same way as accumulation interests, clients may still benefit due to the tax advantages of concessional contributions funded by pension payments. From age 60, pension payments are tax-free. For clients under age 60, there can still be tax savings, particularly where a substantial tax-free component exists. Salary sacrificing into super in combination with tax effective income from a TTR pension can yield tax savings for your clients.
The catch-up concessional contributions measure increases the available cap (if eligible) and can magnify the first-year benefit of a TTR strategy. For example, in the case of Johannes in the screenshot below, the first-year benefit is over $9,000 for a TTR strategy and his net cashflow is unchanged.
If your client is not eligible for social security benefits, you may wish to explore entitlement to the low income health care card (LIHCC). Our calculator is suitable for calculating your client’s qualification under the income test for the LIHCC.
The definition of income for the LIHCC is unique. Assessable income includes amounts generally assessable for social security purposes plus certain other amounts including termination payments. The calculation is further complicated because the assessment period is based on average weekly income for the 8 weeks prior to claim. Income must be below a certain threshold to qualify and under another threshold to retain the LIHCC. Simply enter the required inputs and the calculator establishes average weekly income and determines whether or not your client qualifies for the card. The calculator also highlights the income threshold to retain the card.
We have additional calculators on FFF that you may wish to use, as outlined below.
If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.
DisclaimerThe information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.