Q2. Fred, a single non-homeowner aged 65 has the following assets:Term deposit $200,000Debentures $57,500Shares $118,000Managed fund $20,000In addition, Fred owns the following lifestyle assets, shown at market value:Furniture $15,500Coin collection $7,500Motor vehicle $18,000Fred has a personal loan on his vehicle of $4,500.Determine Fred’s Age Pension under the Assets Test, who has recently become eligible to receive theAge Pension
Question
Q2. Fred, a single non-homeowner aged 65 has the following assets:Term deposit 57,500Shares 20,000In addition, Fred owns the following lifestyle assets, shown at market value:Furniture 7,500Motor vehicle 4,500.Determine Fred’s Age Pension under the Assets Test, who has recently become eligible to receive theAge Pension
Solution
To determine Fred's Age Pension under the Assets Test, we first need to calculate his total assessable assets.
Step 1: Calculate Total Financial Assets Fred's financial assets include his term deposit, debentures, shares, and managed fund. Adding these together gives us:
57,500 (Debentures) + 20,000 (Managed fund) = $395,500
Step 2: Calculate Total Lifestyle Assets Fred's lifestyle assets include his furniture, coin collection, and motor vehicle. Adding these together gives us:
7,500 (Coin collection) + 41,000
Step 3: Calculate Total Assets To get the total assets, we add the total financial assets and the total lifestyle assets:
41,000 (Total lifestyle assets) = $436,500
Step 4: Subtract Liabilities Fred has a personal loan on his vehicle of $4,500. We subtract this from the total assets to get the total assessable assets:
4,500 (Liabilities) = $432,000 (Total assessable assets)
Step 5: Apply the Assets Test As of July 2021, the asset limit for a single, non-homeowner to receive a full Age Pension is 432,000 is less than this limit, he would be eligible for the full Age Pension under the Assets Test.
Please note that the actual amount of Age Pension Fred would receive also depends on the Income Test, which is not covered in this question.
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