1. Nick Bruining CFP B.Com, CPL(H), Dip FP, FFPA, FAICD, APMESA Authorised Representative of N.C. Bruining & Associates Pty Ltd AFSL 245514 www.ncba.com.au

2. Warnings Don’t Yawn Don’t do anything until You thoroughly understand all the implications or; You seek specialist personal advice So you can sue them if its wrong.

3. Our Family

4. Other Families Similar Endeavour to make provision for their children Recognise that there are special issues for the disabled child Try to set things up so they are not dependent on the “system” to provide everything.

5. Centrelink Concessions Medical Eligibility Non means Tested Payments Carers Allowance $114 pfn Carer Disability Assistance Payment for kids <16 $1,000 Carer Supplement of $600 Rest Are “Means Tested”

6. Means Tests Means to self fund or partially self fund Except Blind Pension Income Test Asset Test – Whichever produces the lowest pension is the one used. Awareness of how these work and; SDT is something we can do to reduce their affect All legitimate and legal

7. Pension Single $755.50 pfn or $19,643 + bits ‘n pieces (Concession Cards etc) $19,643 at 5.5% would require $357,000 It is worth while structuring the child’s affairs to access these benefits.

8. Income Test Singles $152 pfn $1,463 or $43,238 Couples $268 pfn $2,546 or $66,196 Each $ over reduces by 50c until it cuts out as above.

9. Income Test What’s Included Earnings Rental Foreign Pensions What’s not Interest Dividends Gifts Winnings

10. Income Test Deeming System A notional rate of interest applied to all “Financial Investments” Includes Bank Accounts Shares “Managed Investments” Others (Gifts over 10K pa /30K 5 year limits) Singles, 1 st $45,400 3% - then 4.5% Couples 1 st $76,600 3% - then 4.5% Worked back to Per fortnight.

11. Deeming So, How much can you have ? Singles - $102,958 Before the Income test starts to bite

12. Assets Test Home Owners Singles $192,500 Couples $273,000 Non Home Owners + $139,500

13. Assets Test Each $1,000 over threshold reduces pension by $1.50 per fortnight. Cuts off pension at $696,250 ($835,750 non homeowner) Includes Financial Assets Personal Assets (Cars, Personal effects) Real Estate (excluding dwelling)

14. Enter the SDT Special Disability Trusts The Trust Holds the assets subject to rules (The Trust Deed) Trustee(s) Beneficiary Centrelink/ Auditors

15. SDTs Introduced in 2006 Introduce a raft of concessions Predominantly Centrelink based

16. Key Elements of SDTs Special Set of rules (Deed) available from Centrelink in a pro-forma document Maximum amount in trust $596,500 plus residence Pays for reasonable care & accommodation plus:

17. Key Elements continued Health Insurance Discretionary of $10,250 per annum But NOT to parents etc Income taxed like normal income to individual

18. Key Elements continued All assets exempt from Asset test All income exempt from Income test Benefits to others No CGT on assets transferred in No Stamp Duty Payable DOES NOT COUNT UNDER GIFTING RULES Could see you or Grandparents/Siblings Qualify for Pension.

19. Where to from here ? Centrelink FISOs 132300 Free service Nice People Financial Planning Association 1800 626 393 Access this presentation at www.ncba.com.au > Downloads