CONTENTS

1. ASSETS FOR CENTERLINK PURPOSES

2. Teen takes action aGainst mum for giving Pets Away

3. SUPER AND THE FAMILY COURT

4. AUSTOCK SHARE REPORT

 

1. ASSETS FOR CENTERLINK PURPOSES

What is an asset?

An asset is any property or item of value you or your partner own or have an interest in, including those held outside Australia. Assets are taken into account when your social security entitlement is being worked out and are known as assessable assets.

Assessable assets include:

·        total amount in your bank, building society or credit union accounts (includes interest free accounts), term deposits, bonds, debentures and shares

·         value of your investments in property trusts, friendly societies, equity trusts, mortgage trusts and bond trusts

·         total amount in approved deposit funds, deferred annuities and superannuation fund investments held by people over Age Pension age

·         certain income streams that don’t have all the “required characteristics”

·         certain income streams that have the “required characteristics” purchased on or after 20 September 2004—50 per cent assessed as asset

·         real estate including vacant land and holiday homes

·         farms and businesses including goodwill

·         loans, including interest free loans to private companies/businesses, family trusts etc

·         motor vehicles

·         boats and caravans not used as principal homes

·         household contents and personal effects

·         surrender value of life insurance policies

·        investment collections of coins, stamps etc, and

·        gifts of money or other assets of more than $10 000 (not exceeding $30 000 in five years, commencing 1 July 2002).

·         Some assets are exempt or disregarded in your pension or allowance assessment.

Exempt assets include:

·        your principal home, that is the home you live in, and the land around the home used for domestic purposes (up to two hectares)

·         certain income streams which have all of the “required characteristics” purchased prior to 20 September 2004.

·         all superannuation/rollover investments until Age Pension age

·         any property or moneys left to you in an estate which you have not yet received

·         a ‘funeral investment’ of not more than $5000

·         an advance payment for a cemetery plot and funeral services

·         aids for people with a disability

·         vehicles provided by the Department of Veterans’ Affairs under the Vehicle Assistance Scheme (gift car scheme)

·         proceeds from the sale of your principal home which you intend to use, within 12 months, to purchase another home. Home sale proceeds are exempt from the assets test for up to 12 months if they are to be used to purchase another home. They are not exempt from the income test however. After 12 months the value of any vacant land or unfinished home will be assessed under the non home owners assets test.

·        most compensation or insurance payments for loss or damage to buildings or personal effects, and

·        accommodation bonds paid on entry to residential aged care.

How are my assets valued?

Each person is responsible to provide their own estimate of the net market value of their assessable assets. The net market value is the amount of money you would get if you sold the asset now, less any debts on the asset such as registered mortgages, hire purchase debts or loans.

The net market value:

·         is not the amount you paid for the asset

·        is not the amount it is insured for or what it would cost to replace, and

·        is not ‘fire sale’ value.

Example: You bought a car for $10 000 and still owe $2000. If you could sell the car for $7000, this would be its market value. The net market value would be $5000 ($7000 from the sale less $2000 owed).

You can get an idea of the market value of many assets (such as real estate, cars, boats and caravans) from newspaper advertisements, although Centrelink can arrange for the Australian Valuation Office to value assets such as real estate.

Household contents and personal effects

Household contents include furniture, antiques, paintings and other works of art, soft furnishings and electrical appliances. Fixtures such as stoves and built-in items are not included as assets. Personal effects include jewellery for personal use. You will need to estimate the value of these items.

Self-employed people (including family businesses and farmers)

Under the assets test, the Net Asset Value of your business or farm includes any stated goodwill, buildings and machinery. It is the gross value of assets owned by the business, less any debts such as overdrafts etc. If you live on the farm the value of the home in which you live, and the land used for domestic purposes (up to two hectares) surrounding it, is an exempt asset and is not taken into account in working out the value of your farm. If you operate a business at home, any part of the home used primarily or solely for business purposes, is an asset.

Value of assets for a couple

If you are a member of a couple the value of your combined assets is used to calculate your entitlement to a pension or allowance.

Working out your rate

Under the assets test a pensioner or allowee can have assets up to the allowable assets threshold without affecting the rate of payment. The amount of allowable assets depends on whether you are a home owner or a non home owner, single or a member of a couple. The pension assets test allows for a gradual reduction in the pension rate in cases where the assets are of greater value than the allowable asset limit up to a final cut-off limit.

The amount of pension that can be paid under the asset test is compared to the amount that can be paid under the income test. The amount of pension paid is the lower of these two amounts.

Source: Centerlink

 

2. Teen takes action aGainst mum for giving Pets Away

A 19-year-old is taking legal action against her mother for giving her pets away. The girl came home to find her mother had taken her pet dog, seven puppies and two guinea pigs to a local animal rescue shelter. The pair had apparently been arguing about the pets since the birth of the puppies. So when the girl went out to college, her mother seized the opportunity to offload the animals. The daughter was so angry she went to the police station and pressed charges against her mother. Police are investigating the charges, but are hoping to settle the matter before it comes before the court.

Source: News letter of the law

3. super AND THE family court

With around 55,000 divorces occurring in Australia on an annual basis, it's no wonder the Family Court's Justice Stephen O'Ryan was introduced at the Self- Managed Super Fund Professionals' Association of Australia conference as "a busy man from a busy court".

There was also a rise of in excess of 300,000 SMSFs and super was emerging as a significant asset for many people, he said. "Not only is divorce a growth industry, but so is super. Family lawyers now have to have an understanding of tax law and super and vice versa," he said. "The legislation in relation to family law is expanding. "They enable third parties to be a party to proceedings in the Family Court." As a warning, he said it was always important to apply the legislation. "You can't use as a template what was said in one case for other cases," he said. "Notwithstanding that, the courts have laid down guidelines." There is a four-step approach, and he said while not trying to be controversial, there was currently controversy involved the first step.

1a .Identify the assets:  It is in the context of that, that people are asked to disclose their super entitlements.

b. Value the assets (including super) :  In this case, there are many lawyers not experienced in super law and looking to experts to identify super interest and hence the expert may be asked to assist in identification of that interest. One of the reforms in relation to super is the mandatory valuation for certain types of interests.

2. Assessment of contributions :  Either by a global approach or asset-by-asset approach and also taking into account initial contributions by each party.

3. Assessing other factors, including where are the parties going :  This involves looking at parties' earnings capacity and also for care of children.

4. Types of order :  this could be a base amount order, growth planning; percentage order or percentage only interest.

"There is a growing recognition in the court for expert evidence," O'Ryan said. "The court itself has introduced reforms dealing with such evidence and the Family Court, like other courts, has provided for single experts. There is a need to cut, the cost for the litigant.

Source: IFA

5. AUSTOCK SHARE REPORT

Addisons has had no involvement in the preparation of this following information and we do not recommend that you act on the following information without first consulting your financial advisor or stockbroker. Addisons does not make any recommendations in relation to specific shares as the share market is highly volatile and carries significant risk and Addisons does not have the expertise to give specific recommendations.  Austock contact information appears at the bottom of this report and we draw your attention to their disclaimer.

 

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Disclaimer

This document is intended only to provide a summary of the subject matter concerned and does not purport to be comprehensive or to render specific advice.  No reader should act on the basis of any matter contained in this document without first obtaining specific professional advice.