Have you seen The Hunger Games?

Have you seen The Hunger Games?

The Hunger Games is a trilogy which we stumbled across whilst researching what film to attend for a Tuesday night. It was our choice as the Orwellian theme resonated with our other readings of late.

The concept was of Big Brother Government & the political classes having 12 areas of populations annually fight in a gladiatorial contest with one survivor out of 24. The gladiatorial concept might have been extreme but it’s not that different from current cage fighting or the Roman circuses of the past.

 A trilogy suggests the theme globally hits the mark. When we reread George Orwell’s 1984 then how far away are we now from that?

Hence as was on every phone booth ‘be alert & alarmed’ as they want your money.

Thank you Bob Down.

Why? They have promised in every election since Federation that they will look after you & care & defend you. However as Europe is or has discovered that they have run out of money to fund these promises. Only last night on Sky Business we saw an older money trader saying that the pension will have to be deferred until much later as we are all living longer. We explained this week to Dan that for him today it is 67.

It is in fact the unseen liabilities of health, government pensions & today aged care that amount to trillions globally. Hence those taxx sniffer dogs for your money today.

Joe was very right when he commented that the West is stuck in ‘an age of entitlement’. Tony No commented otherwise but the reality is there.

Hence we are caught between saving taxx today or risking it in a super environment where the political classes change the rules during play  as they did in The Hunger Games.

There are loud suggestions that there should be more bonds meaning government bonds in your super. Yeah lets have some Greece or Spain or even Australian bonds in our super.

 I.e. using your money to fund some white elephant or the neighbour’s smoker’s leg amputation.

It is suggested today that the upcoming budget there will reduce superannuation concessions as at present  super is a ‘tax haven’ if you are earning more than the current $37,000.

We also read the taxx man holds $730,000,000 of your lost super. That is better in your account than theirs because they don’t give you any interest & you could have it earning more than zero. It will buy only ½ that in 24 years if government inflation is 3% or ½ in 7 years with real world inflation of 10%.

Hence a time to be proactive & we suggest before the budget which is 8^th May.

There are currently a number of provisions that could be maximised & we can be contacted on www.JohnMcAuliffe.com.au

or email or call  07 3848 1088.  

As Robbie says ‘play what’s in front of you’ & you can only play according to today’s rules.

 However the political classes need to be very aware of the Arab Spring & that the Great Wall of China confiscated so much taxx that eventually the ants opened the gates & let the hordes in.  That is why it is still standing.

We had a local reminder of Big Brother when the Police Minister had to resign as he hadn’t paid a speeding fine. When those arbitrary fines could fed a family for a week then it is usury.

We read that the Land of the Free is intending to legislate that if you have a  ‘'seriously delinquent tax debt’ i.e. greater than $50,000 then under MAP- 21 your passport could be revoked.

Hence minimising taxx today is judicious with the proviso of be alarmed tomorrow.

We suggest a time to be proactive is before the budget which is 8^th May.

There are currently a number of provisions that could be maximised & we can be contacted on www.JohnMcAuliffe.com.au

or email or call  07 3848 1088. 

As Super may have downsides in the future or you have maximised it today then there may be other alternatives that you may prefer to address.

We could give you a list including having the Taxx man subsidise your DEBT.

Will you need to use your super to pay off your DEBT on retirement?  Not if the rules change & there is no access to a  lump sum.

As you are different then personal advice is smart & wise & welcome for lunch here anytime.

John McAuliffe

What if Mum needs to go into Aged Care today?

What if Mum needs to go into Aged Care today?

Yes been there & done that. We have had that question ourselves & when it does it needs an answer.  As we said then ‘’we care but we are not carers’

However just as in economics it could be this or it could be that. It depends.

We read in the Weekend Australian 9/04/12  titled ‘Aged fear rip-offs to fund their care’ that the Minister for Aging Mark Butler say s ‘the conversations point to an industry in crisis.’

And again ‘the overwhelming message is that older Australians are not getting the quality of care & support that they deserve from the current system.’

when it was time to enter residential care ‘the price they pay…is based on how much money they have in their pockets rather than a reflection of the true cost of care & value for money’’.

and yes ‘ accommodation bonds paid to get into residential care cost an average of $264,000 but that can be more than a million and are usually raised through forced fire sale of the family home at a time of crisis’.

We had heard elsewhere the average was $365,000 & usually forced fire sale can mean a $50,000 to $100,000 which is only a 10% reduction.

What if it is a sale 15% below estimated by the real estate agent?

 So what is the process & steps that you have to go through & how can you minimise ‘family losses’ & maximise income & taxx benefits?

You need to be ready

o   The Need to enter aged care is often Sudden.

o   A significant bond payment maybe required.

o   There are ways to minimise how much the ‘resident’ pays.

o   Trusts maybe an effective strategy.

o   Planning with good advice is the key.

Decisions need to be made

o   What is the right facility?

o   How much will it cost?

o   How does it all work?

o   What happens to the family home & other assets?

Steps - a family Checklist

·         Get ACAT approval which determines  low, high or respite care.

·         Select home i.e. location, facilities care, culture. Then add name to waiting list.

·         Negotiate the fees & sign the residential agreement. [you won’t know the daily rate until after 28 days in there.]Yep.

·         Do we keep or sell the home? You will need to pay entry fees & review investments.

·         Has estate planning including Power of attorney been actioned?

·         Move Mum’s home into her unit. We still remember that part vividly.

 What is the Cost structure?

o   There is an entry fee payable if assets exceed $40,500.

o   There is an upfront bond or daily charge.

o   There is a basic daily care fee which is currently  15,089 p.a.

o   Then an income tested fee based on private income & government support.

o   At lastly there is an extra service fee which depends on the market & facility.

 What are these accommodation bonds.

·         As above the average is $ 350,000 but if it is $264,000 then that’s not small.

·         The facility uses it for debt reduction, or investing or building say.

·         It can retain 318p.m. for up to 5 years.

·         It is repaid when resident dies or leaves.

·         It is government guaranteed  & paid back within 14 days.

·         It is asset tested exempt.

What do you do when the moment or rather the decision is made?

You can DIY which usually means sell the house & pay what is negotiated. 

·         This often means an extra income from the bank interest earned.  This will have the consequence of increasing the cost of care, the daily care fee, the income tested fee and the extra service fee.

·         It will also reduce the pension.

As ‘it depends’ & everyone is different but you may be able to

·         reduce the income tested fee & the extra service fee.

·         You may be able to increase the pension.

·         Retaining the health card is also important.

You are welcome to call us now on 07 3848 1088 or email us or visit our websites.

Nothing has changed as good preparation means less stress later.

Here to help you negotiate through the aging minefield when you wish.

Yes Dad might need it too although Jack selected a better  & more tranquil place where dolphins pod & cruise ships berth to exit the stage.

John McAuliffe