Nick Bruining: Caring for Mum or Dad? Centrelink’s carer’s payment and carer’s allowance can help

Question

I have an elderly mother who still lives at home and receives some assistance through the Commonwealth Home Support Programme with cleaning and gardening services.

In the past few months, however, her needs have increased and I am finding that I need to reduce my hours in order to look after her.

A friend told me that I may be able to receive a Centrelink payment but I would like some clarification before I go through the process of applying.

Answer

There are potentially two payments available and you may be eligible for both.

The Carer Payment is paid at the same rate as an age or disability support pension and subject to identical means-testing rules.

For a single, the full payment rate is currently $1149 a fortnight. To get any payment, if you are a single homeowner your assets — excluding your home — would need to be less than $697,000 and Centrelink-assessable income less than $2510 a fortnight.

This income includes your before-tax wages, net rental income, foreign pensions plus the deemed income on all your financial assets, excluding money held in superannuation accumulation phase.

The Carer Payment is effectively for someone providing close to full-time care and your circumstances sound like you might qualify. Your mum’s care needs would need to be verified by a medical professional and you need to work less than 25 hours a week.

The second payment is the Carer Allowance and the rate payable is a tax-free $159.30 a fortnight. There is no partial-payment arrangement for this payment. You either qualify for the full amount or not at all.

The level of care required is less than for a carer payment and still needs to be verified by a medical professional. If you are regularly assisting with her meals, medication, hygiene, dressing or other needs, you will probably qualify.

Your mum’s financial circumstances are not used in determining your eligibility but you and your partner’s (if you have one) adjusted taxable income must be less than $250,000 a year.

ATI includes your before-tax employment income, amounts voluntarily contributed to superannuation where you claimed a tax deduction and an add-back of any investment losses you claimed. Typically, investment losses arise through negative gearing arrangements.

The easiest way to apply for either payment is via the myGov website. Part of that process will be to download form SA332A from Centrelink, which is to be completed by a medical professional, usually a doctor.

Question

I am in my mid-30s and started a fly-in, fly-out job early last year after being self-employed as an electrician.

Because I have had no superannuation up until now, I arranged to salary sacrifice some of my pay to superannuation.

I hoped to max-out the contribution limits from last year, and this year as well.

When I visited the Australian Taxation Office website via myGov, I discovered the contribution for the end of last financial year did not get credited to my account until July.

Because the money was deducted from my pay last financial year, I am not sure if it counts towards last year’s cap or this year’s cap?

Answer

Under employer superannuation laws, contributions for employees must be paid within 28 days after the quarter the liability arose. That amount includes the employer’s compulsory contribution along with money you contributed, including salary-sacrificed arrangements.

As long at the amount was credited to your account by July 28, the employer has met their obligations, but it will count towards this year’s cap. The date it was deducted from your pay is irrelevant.

Fortunately, all is not lost. If your superannuation balance is less than $500,000, you can make use of the carry-over provisions of unused concessional contribution caps.

Under this system the contribution caps for up to five previous years can be applied along with the current year. All up, the grand total is $162,500, less any concessional contributions already utilised.

Nick Bruining is an independent financial adviser and a member of the Certified Independent Financial Advisers Association