Welcome to Wakefield Partners
 We are a boutique financial planning practice conveniently located on the Adelaide City fringe. We offer local service but also offer a global reach through our association with the national (and international) RBS Morgans network.
If you would like to establish a long term relationship with a dedicated adviser, then talk to us. We aim to be approachable, friendly, and flexible. Our clients have needs and objectives. Our role is to guide them through the advice and investment process with sound financial planning strategies.
Come and talk to us, check us out. We are good listeners. And we promise to explain complex concepts in plain English!
Featured News Story
Clients tell us that it is hard finding places in Nursing Homes. There are long waiting lists and it appears that you have to be in a bad way to get in, or be able to write a big cheque. This is despite a huge building program and vast amounts of public and private money being spent.
What is the problem and will it get any better?
Looking at the ABS statistics it is hard to believe that it is going to get any better. The simple fact is that we are living longer and have a greater need for care. At first this seems a contradiction. Surely greater life expectancy (which is generally attributed to better diet and health care) should result in a generation of healthy active seniors?
The statistics provide an interesting, but disturbing outlook.
While life expectancy is increasing, the average period of disability is also increasing. What this means is that while as a population we may be living longer, we will also spend more years in poor health. The ABS figures show that between 1996 and 2003 average life expectancy for males increased by 3.6% but the average years spent in an unhealthy state increased by 11.6%. A male born in 2003 may spend 11% of his life in an unhealthy state.
The simple truth is that in coming years more people will need aged care as a result of population increase, the ageing of the population, and the increased period of disability. The pressure on the system is set to continue.
What can we do?
Our advice to clients is to "Be Prepared". Treat it as likely that you, a partner, or a relative will require nursing home care. It is better to have some basic understanding of the system and have made some basic preparations. Our experience is that this rarely happens.
Scott Keeley can provide general or tailored advice in relation to Aged Care fees and Accommodation Bonds. If you want to "Be Prepared", talk to Scott.
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A client rang me this morning to notify me of a change to their Age Pension. This caused concern as there had been no changes to his circumstances.
He wondered if the deeming rates had changed. Google has the answer to everything, and a quick search revealed nothing. Plenty of information on deeming rates, but nothing recent, and nothing to do with changes.
A quick call to Centrelink, and the matter was resolved.
As at 20 March 2010, it would appear that the deeming rates will change. Given the current interest rate environment, this is fair enough.
The lower deeming rate of 2% will move to 3%.
The upper deeming rate of 3% will move to 4.5%.
Although this change will not occur until 20th March 2010, Centrelink clients have started receiving notification of the changes to their payments. Furthermore, a reassessment of current share prices and managed fund unit prices has also taken effect from 20th March 2010.
Need help understanding your Centrelink position? Want to consider ways to maximise your Age Pension or other payments? Contact Scott Keeley on (08) 8333 2488.
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Clients tell us that it is hard finding places in Nursing Homes. There are long waiting lists and it appears that you have to be in a bad way to get in, or be able to write a big cheque. This is despite a huge building program and vast amounts of public and private money being spent.
What is the problem and will it get any better?
Looking at the ABS statistics it is hard to believe that it is going to get any better. The simple fact is that we are living longer and have a greater need for care. At first this seems a contradiction. Surely greater life expectancy (which is generally attributed to better diet and health care) should result in a generation of healthy active seniors?
The statistics provide an interesting, but disturbing outlook.
While life expectancy is increasing, the average period of disability is also increasing. What this means is that while as a population we may be living longer, we will also spend more years in poor health. The ABS figures show that between 1996 and 2003 average life expectancy for males increased by 3.6% but the average years spent in an unhealthy state increased by 11.6%. A male born in 2003 may spend 11% of his life in an unhealthy state.
The simple truth is that in coming years more people will need aged care as a result of population increase, the ageing of the population, and the increased period of disability. The pressure on the system is set to continue.
What can we do?
Our advice to clients is to "Be Prepared". Treat it as likely that you, a partner, or a relative will require nursing home care. It is better to have some basic understanding of the system and have made some basic preparations. Our experience is that this rarely happens.
Scott Keeley can provide general or tailored advice in relation to Aged Care fees and Accommodation Bonds. If you want to "Be Prepared", talk to Scott.
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Whether it is to reduce Aged Care Fees, or to increase Centrelink/DVA Pension payments, inevitably gifting will be considered. With a real lack of other asset minimisation strategies available now (since rule changes in the last decade relating to private companies, family trusts and annuities), gifting is one of a few that is occasionally considered (along with funeral bonds - perhaps a story for another day!).
"I am only allowed to give away $10,000 per year" is a statement I hear regularly. It alludes to the Centrelink rule that exempts the first $10,000 per financial year gifted from the Assets Test (for both pension and Aged Care Fee purposes). The other limit that is placed on this is "Up to a maximum of $30,000 in a 5 year period". Centrelink websites and various others explain the ins and outs of the gifting rules, so I'm not going to restate them here.
It is important to understand that you can give away however much you like. Your assets, built up over significant time, are yours to choose what you do with them. Often misinterpretation of the Centrelink rules result in people believing that they are "only allowed to give away $10,000 per year". This is not the case! You can give away as much as you like....
BUT
You need to carefully consider the implications. Gifting is unlikely to significantly improve your Centrelink/DVA and Aged Care Fee situation. In some cases, it can make it worse. Gifts above the $10,000 limit are assessed by Centrelink/DVA as if you still hold those assets for 5 years. As an example, a gift of $100,000 to a family member in one lump sum will result in $90,000 continuing to be assessed as an asset for 5 years. Furthermore, the assessed gift amount (in the example, $90,000) is deemed to earn interest at the current applicable deeming rates.
Keeping all of this in mind, there are a few important points to consider:
The $10,000 gifting rule is only applicable where Centrelink, DVA or Aged Care Fees are involved. There is no such thing as a "Gift Tax" anymore, meaning that if a person does not have any reliance on Centrelink/DVA, then there is no limit to gifting. However, if gifting, please consider the impact on the recipient. If they rely on Centrelink payments, or have children who receive Austudy/Youth Allowance, there can be unintended consequences.
Gifting non-income producing assets can worsen your financial position. The beach house/shack, or vacant block of land, may already have it's value being assessed by Centrelink/DVA for pension payments. However, if no income is derived from this asset, then Centrelink/DVA will be assessing no income. Remember that assessed gifts (above $10,000) are deemed to earn income, which may reduce pensions and/or increase Aged Care Fees! Transfering the title of your home can have a similar impact.
Gifting may seem good in theory, but often even smaller gifts of $10,000 may only improve your income from Centrelink/DVA by a few hundred dollars per year, or reduce your Aged Care Fees by a few hundred dollars per year. Given overall cashflow is of paramount importance, is it really worth it? I certainly understand however, that there are non-financial benefits to making gifts.
There are special rules if a person making a gift received a right to reside in the recipient's house in return for the gift.
It is important to get advice if you are considering gifting as part of a Centrelink or DVA maximisation/Aged Care Fee minimisation strategy. Gifting can make sense in some situations, but it is important to understand all of the consequences.
With over 12 years working at Centrelink, and 5 years as a Financial Planner, I can assist you with all of your enquiries. Please contact me on (08) 8333 2488.
Scott Keeley
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