Money under the mattress now an effective strategy for those in excess of the age pension asset test.
For a couple every $1,000 above the $375,000 lower limit will reduce their pension entitlements by $3.00 per fortnight / $78.00 pa.
By placing that $1,000 under the mattress they will effectively be generating a return of 7.80% pa.
As an example
A couple has $10,000 in a ?high? interest bank account generating 3% pa = $300 pa. Under the new asset test this amount of money in the bank would result in a reduction of $780 pa in the age pension. Therefore this couples net return on this money is -$480 pa.
Alternatively having this money under the mattress would generate $780 pa, in age pension + $0 interest.
These new changes I predict will drive more money into trusts, children?s bank account, jars buried in the back yard etc...
Money under the mattress now an effective strategy
For a couple every $1,000 above the $375,000 lower limit will reduce their pension entitlements by $3.00 per fortnight / $78.00 pa.
By placing that $1,000 under the mattress they will effectively be generating a return of 7.80% pa.
As an example
A couple has $10,000 in a ?high? interest bank account generating 3% pa = $300 pa. Under the new asset test this amount of money in the bank would result in a reduction of $780 pa in the age pension. Therefore this couples net return on this money is -$480 pa.
Alternatively having this money under the mattress would generate $780 pa, in age pension + $0 interest.
These new changes I predict will drive more money into trusts, children?s bank account, jars buried in the back yard etc...
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