You are referring to the transfer balance cap,and it appears that you used it all up when you transferred the $1.6 million to it when the rules changed.
The transfer balance cap puts a limit on the total amount of superannuation that can be transferred into the retirement phase.Simon Letch
Having used up the cap,you can’t add any more money to your pension account,but there is no limit to what it can grow to. This will happen if the returns from the fund exceed your compulsory pension payments.
We received an email from the Tax Office stating that due to information they have received,we cannot join the automatic refund of franking credits program for the 2023-24 financial year. This is because we are represented by a tax agent. They also told us we will need to lodge a tax return by October 31 to clear all our income and claim our franking credits. We are not sure if it’s genuine because we’ve heard so much about scams and always worry about clicking on links.
My accountant confirms the information is correct – if you have a registered tax agent,you don’t qualify for an automatic refund. You have to do a tax return or a refund-of-franking-credit return.
My father was a self-funded retiree who never completed a means test before entering aged care and,as such,paid the required means-tested care fee (MTCF) throughout his stay. He first entered aged care in July 2018,but after 10 days he was not happy and used the cooling-off clause to rescind the contract before the 14-day notice period. He returned home with no government-funded care of any sort. Six months later,he moved into another aged care home,paid the refundable accommodation deposit (RAD) of $700,000 and didn’t submit a means assessment,paying the maximum MTCF. He remained in that aged care home until his death 23 months later.
After probate was granted,the aged care home refunded his RAD minus the lifetime cap. This is where my objection/disagreement starts. After his passing,a reconciliation was done that said he had only been charged $55,620,being the two annual caps,but Services Australia advised he reached his lifetime cap and as a result deducted approximately $11,500 more from the RAD when they repaid it to his estate. My dad spent a few days shy of two years in aged care. How is it possible for him to have reached his lifetime cap? Neither the aged care home nor Services Australia can explain this,they just say,“this is what the system says”.
Rachel Lane from Aged Care Gurus says adjustments made to estates such as the one you are describing are quite common. It is all to do with the anniversary date of your dad’s entry into aged care.
While he lived in aged care for two years,it spanned across more than two anniversary years. The annual cap is applied across the anniversary years,so from July 2018 to July 2019 he should have paid the annual cap (even though he wasn’t in care for all of that year),then from July 2019 to July 2020 he would have paid the annual cap again,and then from July 2020 to December 2020 he would have paid his MTCF until he hit the lifetime cap.
The means-tested care fee is not averaged out across the year;you can actually reach the annual cap rapidly (about 82 days) if you have the means and if the funding for your care is high enough.
I am seeking clarification about withdrawing money from my super fund,which is in pension mode. I am planning an overseas holiday and will need to withdraw $10,000 to pay for it. Does the $10,000 become part of my taxable income for the financial year? I have a rental property but my income from it sits just below the tax-free threshold. I’m worried the extra $10,000 will take me over the threshold.
Don’t worry,once you reach age 60 withdrawals from superannuation are tax-free. Enjoy your holiday.
Noel Whittaker is the author ofWills,Death&Taxes Made Simple and numerous other books on personal finance. Email:
Expert tips on how to save,invest and make the most of your money delivered to your inbox every Sunday..