Version: FIN1.0.0 100+ Written Advice Strategies ADVICE CONTENT FOR SOA’S
Table of Contents 1. Commence a Home Care Package 5 2. Enter Aged Care Facility and Restructure your Finances 6 3. Cash Reserves 8 4. Cash Management Account...........................................................................................................9 5. Consolidate Cash...........................................................................................................................9 6. Establish a Budget for your Cash Flow.........................................................................................10 7. Cash flow monitoring 11 8. Surplus Cashflow 11 9. Term Deposit 12 10. Term Deposit Renewal.............................................................................................................13 11. Apply for a Low-Income Health Care Card (LIHCC)..................................................................13 12. Apply for Austudy....................................................................................................................14 13. Apply for Carer’s Allowance 14 14. Apply for a Carer Payment 15 15. Apply for the Centrelink Age Pension 15 16. Apply for the Commonwealth Seniors Health Care Card (CSHCC)...........................................16 17. Apply for a Disability Support Pension.....................................................................................17 18. Apply for Department of Veterans’ Affairs (DVA) Entitlements...............................................17 19. Gift $XXX to increase your Centrelink Entitlements 18 20. Apply for Jobseeker Payment 18 21. Apply for Parenting Payment 19 22. Maintain your Pension Bonus Scheme 19 23. Apply for Rent Assistance........................................................................................................20 24. Commence an Investment Portfolio with a Margin Lending Facility........................................20 25. Consolidate your Debt 21 26. Implement a Debt Recycling Strategy 22 27. Establish a Loan Offset account 23 28. Increase the Frequency of your Loan Repayments 24 29. Increase your Loan Repayments..............................................................................................24 30. Commence a Regular Gearing Strategy...................................................................................25 31. Repay your Non-Deductible Debt............................................................................................26 32. Use your Home Equity to Invest 26 33. Establish your Estate Plan 27 34. Review your Estate Plan 291
35. Establish your Will/s................................................................................................................30 36. Review your Will/s...................................................................................................................30 37. Establish your Powers of Attorney 31 38. Review your Powers of Attorney 31 39. Purchase a Funeral Bond 32 40. Implement a Testamentary Trust............................................................................................33 41. Adjust your personal insurance cover......................................................................................33 42. Establish your Risk Protection Plan..........................................................................................35 43. Apply for Life & Total and Permanent Disablement (TPD) Insurance 37 44. Apply for Life Insurance 38 45. Apply for Total and Permanent Disablement (TPD) Insurance 39 46. Apply for Trauma Insurance 41 47. Apply for Income Protection Insurance...................................................................................42 48. Apply for Accidental Life Insurance.........................................................................................43 49. Apply for Business Expense Insurance 44 50. Apply for Business Protection Insurance (Key Person) - Debt 45 51. Apply for Business Protection Insurance (Key Person) - Revenue 47 52. Apply for Child cover 48 53. Review your SMSF Insurance Strategy.....................................................................................49 54. Invest in a Portfolio of Direct Shares........................................................................................49 55. Commence a Regular Investment Plan....................................................................................50 56. Invest in an Investment / Education Bond 51 57. Commence an Investment Portfolio via a Platform / Wrap Account 52 58. Commence an Investment Portfolio via a Master Trust 53 59. Invest in a Diversified Portfolio of Managed Investments.......................................................54 60. Invest through a Regular Savings Plan.....................................................................................55 61. Switch investments in your Portfolio.......................................................................................55 62. Rebalance your Investment Portfolio 56 63. Redeem your Investment/s 57 64. Establish a Discretionary Trust 57 65. Establish a Family Trust...........................................................................................................58 66. Commence an Account-Based Pension....................................................................................59 67. Reboot your Account-based Pension.......................................................................................60 68. Commence an Annuity Income Stream (Super money) 61 69. Commence an Annuity Income Stream (non-super money) 62 70. Take Account-Based Pension benefit as a Lump Sum 632
71. Take Account-Based Pension Death Benefit as an Income Stream..........................................64 72. Rollover your Defined Benefit Fund.........................................................................................64 73. Retain your Defined Benefit Fund 65 74. Change your Account-Based Pension Income Payment 66 75. Invest using a Model Portfolio 66 76. Re-contribute to your Superannuation....................................................................................67 77. Nominate <Spouse name> as a Reversionary Beneficiary.......................................................68 78. Retire on an Income of $<Retirement income>at age <Retirement age>................................68 79. Commence a Transition to Retirement Income Stream with salary sacrifice 69 80. Commence a Transition to Retirement Income Stream <no salary sacrifice> 70 81. Transfer your UK Pension to an Australian Super Fund 71 82. Withdraw $XXX from your Account-based Pension 72 83. Make a Downsizer Contribution to Super................................................................................72 84. Borrow to invest via your Self-Managed Super Fund - Property..............................................73 85. Borrow to invest via your Self-Managed Super Fund - Investment 75 86. Transfer business real property to your SMSF 77 87. Establish/Maintain a Self-Managed Super Fund 78 88. Review your Self-Managed Super Fund Trust Deed and Investment / Insurance Strategy 80 89. Consolidate Super into your Self-Managed Super fund...........................................................81 90. Wind-Up (Close) your Self-Managed Super Fund....................................................................82 91. Make Super Contributions using the First Home Super Saver Scheme (FHSSS).......................82 92. Review your Binding Death Nomination 83 93. Make a Binding Death Nomination 84 94. Make Salary Sacrifice Superannuation Contributions 84 95. Make Changes to your Salary Sacrifice Contributions..............................................................85 96. Make Concessional Superannuation Contributions.................................................................86 97. Consolidate your Super Funds.................................................................................................87 98. Start a New Super Fund 88 99. Retain your Super Fund/s 88 100. Review your Super Fund 89 101. Rollover your Super Fund/s.....................................................................................................89 102. Rebalance your Super Fund Investment Portfolio...................................................................90 103. Withdraw your Superannuation..............................................................................................90 104. Transfer your asset/s In-Specie to your Super Fund 91 105. Make a Non-Concessional Contribution and access Government Co-Contribution 92 106. Cease your Transition to Retirement Income Stream <with salary sacrifice> 923
107. Split your Contributions with Spouse name.............................................................................93 108. Make a Non-Concessional Contribution..................................................................................94 109. Make a Spouse contribution to Superannuation 95 110. Make a Non-Concessional Contribution with the Proceeds of your Business Sale 96 111. Invest in a Portfolio via a Managed Discretionary Account (MDA) 97 112. Re-contribute your COVID-19 Early Release of Super..............................................................97 113. Invest in a Separately Managed Account.................................................................................98 114. Invest in an Exchange Traded Fund.........................................................................................99 115. Transfer Balance Cap Indexation 100 116. Advance Care Directive 102 117. Review your insurance 103 118. Cancel your insurance 1044
The fee you pay is determined by the Department of Human Services and will reduce the income you have available for your normal living expenses.
You will be able to stay in the comfort of your own home.
The Home Care Package approval process can take up to 12 months or more. If you need help in the meantime, there are ad-hoc homes services available to you.
Your income test assessment as calculated by the Department of Human Services and;
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We estimate that you will pay a Basic Daily fee of $XXX <as well as an Income-Tested fee of $X per day>. Your total contribution is estimated to be $X per day / $X per annum.
The government gives you a list of approved services that are monitored for quality.
[If full age pension recipient] As you receive a full age pension, you only need to pay the Basic Daily fee for these services.
All payment rates and means tested fees are updated quarterly in line with the DHS payments on the 1 January, 20 March, 1 July and 20 September. This means your fees can change quarterly.
[Fee payer] The annual and lifetime caps on income tested fees can help manage the fees you pay.
The fee that you pay and the services you receive depend on:
[Fee payer] You will have to pay a fee in addition to the Basic Daily Fee for the in-home services provided.
Benefits:
You have the flexibility to choose a service provider to match your needs.
assessmentCare Chooseprovidercare Homeapprovedpackagecare Home agreementcare ServicesManage
If the fees from your selected provider exceed your contribution, the government will pay the balance.
We recommend that you start a Home Care Package to help you remain in your home with the support of in-home services. There is a formal process that you need to complete with the Department of Human Services (DHS) to have your Home Care Package approved, as outlined in the diagram below. You will need to start the process by making a time with the DHS to get a care assessment that will determine the level of care you require, and by completing an income assessment form if required. We will then need to find a service to match your needs. Once your home care package is approved, you can enter into an agreement with your chosen service provider.
The Home Care package provides personal care, clinical care and support services dependant on the level of care you need.
Points to Consider:
1. Commence a Home Care Package
[Fee payer] You must complete the Income Assessment form and submit to the Department of Human Services for assessment. If you do not, you may have to pay the maximum rate of $32.30 per day ($11,789.50 p.a.) in additional to the Basic Daily fee.
Your needs as determined by the Aged Care Assessment Team (ACAT) – Level 1 – 4.
[No fees] The account for your cash reserve does not have any fees.
3. Apply for Department of Veterans’ Affairs (DVA) Entitlements
You will have immediate access to funds in the event of unexpected expenses and emergencies.
Transaction costs and interest penalties may apply at time of withdrawal.
You will forego potential higher returns that could be achieved from investing in growth asset classes such as property and shares.
2. Cash Reserves
Additional Resources:
Benefits:
Cash investments are not necessarily capital guaranteed. Please refer to the PDS / your bank for further information.
Points to Consider:
[Centrelink recipient] The income on your cash-based investment will be deemed for Centrelink purposes.
We recommend that you apply for Department of Veterans’ Affairs entitlements. Based on our current estimate of your entitlements and your financial position, we believe you are eligible for a Service / Age Service / Invalidity Service / Partner Service pension or Veteran payment of $ XXX per fortnight ($XXX p.a.) You may also be eligible for a Defence Force Income Support allowance / Rent assistance / Remote Area allowance and/or a Pension / Veteran / Income Support / Energy supplement and/or an Energy Assistance Payment.
Your unexpected expenses may be more than the reserves we recommend here. You will then need to source money from other investments / your everyday funds.
My Aged Care (Government service) 1800 200 422 https://www.myagedcare.gov.au/
Benefits:
We recommend that you invest this cash reserve in <Name of recommended cash account>.
We recommend that you establish / maintain a cash reserve of $X. This money will provide you with a pool of funds that you can draw on for unexpected expenses and emergencies and will be sourced from your <Name of source>. This is in line with your request / goal to maintain cash reserves of $X. [If there is a variation between goal and recommendation, add an explanation here].
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Annual caps are reviewed twice per year on 20 March and 20 September.
You will potentially receive higher returns by redirecting your reserves to <Name of recommended account>
You will not have to pay for unexpected expenses and emergencies from your day-to-day funds. This will reduce the risk of not meeting your living expense needs.
The DVA entitlements may give you access to other discounts and benefits such as rent assistance.
4. Gift $XXX to increase your Centrelink Entitlements
Utilising this income will help preserve your investment savings for future income needs.
You will also receive discounts on utility bills, rates, public transport and other health care costs.
Benefits:
You will have more income to help meet your everyday living costs.
Centrelink payments are subject to legislative change which may impact the amount of your entitlement in the future.
[Means tested] You must notify DVA of any significant changes, within 14 days, for a review of your entitlements.
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Points to Consider:
You will receive cheaper medicine under the Pharmaceutical Benefits Scheme. Your Doctor may provide bulk-billing visits.
You will no longer have this cash at your disposal for spending.
Gifting cash or assets up to $10,000 per annum and no more than $30,000 over 5-year limits, will reduce your assessable assets and increase your Centrelink entitlements.
Gifting to reduce your Centrelink assessable assets is subject to a $10,000 limit in one year and $30,000 limit over 5 years. If you have already gifted cash or assets, it may impact the estimates of your entitlement here.
[Means tested] The entitlement we have estimated here is based on your current financial position. If this is inaccurate or you have a significant change in circumstances, your entitlements will change as eligibility is based on an income and asset test.
You can assist <Gift recipient> by providing $XXX to <outline how the money is to be used>
We recommend that you gift $XXX to <gift recipient> from your XXX account / investment. We estimate that this will reduce your Centrelink assessable assets by this amount which will in turn increase your Centrelink entitlements by $XXX per fortnight ($XXX p.a.).
Access to DVA entitlements will help to supplement your income, helping you meet your ongoing living costs.
You will only receive a small increase in your Centrelink payment relatively to the gift you make. The long-term value of this lump sum is potentially more than the additional payment you will receive.
Points to Consider:
Extended overseas travel may impact your entitlement therefore it is important that you notify the DVA of these plans.
DVA payments are subject to legislative change which may impact the amount of your entitlement in the future. A review of your income requirements will be needed should this happen.
5. Apply for Jobseeker Payment
Payment at claim is normally limited for business expenses to 12 months, as opposed to an income protection policy where you can receive ongoing benefits up to age 70.
6. Apply for Business Expense Insurance
[Business owned policy] Benefits paid may be subject to tax and only the net amount will be available for paying your business expenses.
We recommend that you apply to protect your business expenses in the event you are unable to work due to illness or injury. We recommend cover to be provided as follows:
Yourself / Your business as the owner of policy. Premium on a stepped / level basis.
Points to Consider:
The policy will be an indemnity value contract.
[Business owned policy] Holding your cover through your business will make insurance premiums tax deductible to the business.
Points to Consider:
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$XXX per month with a waiting period of 12 months.
Benefits:
This cover will help you continue your business in the event you are unable to work due to illness or injury. This will give you up to 12 months to recover or find an alternative solution for your business.
You may work part time however your payment will be reduced for income earnt.
The benefit amount for this cover is based on your / our estimate of regular, fixed expenses. If this estimate is incorrect, you may be underinsured.
Business expense insurance will cover 100% of the fixed expenses as nominated by you. This is significantly more than a personal income protection policy.
Jobseeker is only payable whilst you are looking for work. Proof must be provided to Centrelink on request.
We recommend that you apply for Jobseeker with Centrelink. This will help you to meet your living expenses whilst you look for a new job. We estimate, based on your current income and assets, you will be eligible for $XXX per fortnight ($XXX p.a.).
Payment of Jobseeker is subject to a waiting period depending on your asset level. We estimate that your waiting period will be XX weeks.
Benefits:
You must notify Centrelink of any significant changes, within 14 days, for a review of your entitlements.
Jobseeker will give you a fortnightly payment that you can use to meet your living expenses. You will also get access to a Health Care Card providing discounts on bills and medical costs.
Centrelink payments are subject to legislative change which may impact the amount of your entitlement in the future.
We recommend that you commence a transition to retirement income stream by rolling $XXX from your YYY Super Fund, leaving a balance in super of $ZZZ. This will help to supplement your income now that you have reduced your work hours / pay off your mortgage in preparation for retirement / pay for <expense> as you cannot afford to pay this from other income sources. We recommend that you draw the minimum pension of $XXX p.a. / an amount of $XXX p.a. / the maximum of 10%.
Benefits:
Significant changes to your circumstances may impact the appropriateness of the level of cover recommended. Please contact our office to arrange a review in the event of any significant changes to your lifestyle and/or needs.
7. Commence a Transition to Retirement Income Stream with salary sacrifice
[Specified levels of cover] You have specified the level of cover for your business expense insurance and as such, we cannot confirm if this level of cover is appropriate for your needs. You may be underinsured as a result, and not have adequate cover in place to meet your financial commitments in the event of a claim.
You can access your superannuation prior to retirement as you are over preservation age.
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We recommend that you salary sacrifice an amount of $XXX p.a. to contribute to your superannuation, to top up your retirement savings from tax-effective income.
[Cash reserve] Maintaining 12, 18, XX months of pension payments in cash will provide liquidity for payments without the need to sell down your investments.
[Stepped] Stepped premiums will increase each year in line with your age.
We have recommended new insurance that will be underwritten by the insurer to assess your application. They may offer revised terms including higher premiums or health exclusions, depending on the outcome of their assessment.
You will be able to meet your ongoing living expenses / purchase XXX / pay your mortgage / loan
Do not cancel any existing insurance cover prior to the recommended insurance being accepted and put into force.
You need to complete your application for insurance honestly and with full disclosure. Failure to do so may give the insurer cause to void your policy and not pay claims in the future.
[Over 60] Your transition to retirement income stream income payments will be tax free as you are over age 60.
[Level] Level premiums may increase over time; they are not fixed rates.
[Limited Information] You have not disclosed the full financial position of the business for us to determine an appropriate level of cover. We have made some assumptions on what you need which may result in you being underinsured.
[Personal Cash flow] The recommended insurance premiums will reduce your personal cash flow available for other expenditure.
You can replace the income you have drawn with tax-effective superannuation contributions from your pre-tax income.
A concessional cap of $27,500 p.a. applies to concessional contributions. [Balance less than $500,000] As your balance is less than $500,000, you can carry forward unused concessional contributions for up to 5 years.
Salary / wage increases may result in exceeding the cap. Please contact our office so that we can amend the contribution amount.
We estimate you will increase your retirement balance by an extra $XXX over in the next XX years.
Points to Consider:
[Negative cash flow] You will be spending more drawing the transition to retirement income stream than you will be saving through your super contributions. This will mean you have less available at retirement.
The maximum you can draw from a transition to retirement income stream is 10% of the Fund balance as determined at commencement.
A separately managed account (SMA) is a portfolio of securities you can invest in. It’s similar to an ETF or mutual fund. However, when you invest in a SMA, you own all the securities within your portfolio. This gives you a bit more flexibility as to how those funds are invested and managed, as well as the transparency to monitor trades in real-time.
[Under 60] As you are under 60, you will pay your marginal tax rate on the taxable portion of your transition to retirement income stream income. You will receive a 15% tax offset on tax paid.
We recommend that you invest $xxx from your bank account/sale of property/withdrawal from super in a portfolio of direct shares/securities/funds and cash, via a SMA, as part of your wealth creation strategy.
You will not be able to access the balance of your pension or super until you meet a condition of release such as retirement.
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Exceeding the concessional cap will result in additional tax payable.
The level of income drawn can be varied each year (within the minimum 2 / 4% and maximum 10%) in the event your needs change.
[Insurance] As you have cover in place in your existing superannuation, we have recommended that you leave enough money in the account to avoid the insurance lapsing.
Our projections indicate that you may have annual tax savings of approximately $XXX per annum.
Salary sacrifice contributions are tax effective as your marginal tax rate is XX% and superannuation is charged at a rate of 15%.
[Under 60] Your income tax will reduce as the pension income that is taxable can be reduced by a 15% tax offset.
The current minimum pension payment has been reduced to half the normal rate to provide relief from the downturn in markets attributable to the covid pandemic. These rates are set to return to the standard rates from 1 July 2023.
8. Invest in a Separately Managed Account
The Transfer Balance cap for income streams means that only $1,700,000 can be transferred from super at retirement. The remaining balance will need to stay in super.
Investment earnings with a TTR income stream are taxable at up to 15%
[Cash flow neutral] Your take home pay will remain the same.
SMAs are managed by professional money managers. Fees may be higher than those associated with mutual funds, but it may be the case of you get what you pay for. For example, you may have more involved management and flexibility when it comes to your investments.
SMA’s investment strategy and asset allocation are tailored specifically to you as the owner.
Managing interest rate risk
SMAs often have higher required minimum investments and may be ideal for those with more cash to invest upfront.
Increasing tax efficiency
Promoting environmental, social and governance principles
Generating current income
They offer more control over your investments, increased transparency when it comes to individual trades in the portfolio, and more importantly, customization.
A separately managed account is an investment account owned by an individual investor but managed by someone else.
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Within the portfolio there may be stocks, bonds, and cash or cash equivalents. Stock investments may include small-cap, mid-cap, or large-cap companies.
With SMAs, a single investor owns all the securities within the fund.
Since separately managed accounts hold individual stocks, it’s harder for them to offer the same level of broad-based diversification as a mutual fund or exchange-traded fund which could hold hundreds or thousands of different stocks.
Benefits:
SMA portfolios can include a mix of different securities that reflect a specific investment strategy or goal. For example, SMA investing may focus on:
Mutual funds are owned by multiple investors, while SMAs are owned by one individual.
CGT may be payable on the sale of shares therefore it is important to seek professional tax advice before selling any shares.
Many financial institutions require a hefty minimum to open a SMA, often between $50,000 and $100,000. That’s a large initial investment, which simply may not be realistic for every investor.
Your advisor can typically make investment decisions on the investor’s behalf, including when to buy or sell securities.
It is best to have a long-term outlook for the ownership of direct shares; this may help to smooth out the impact of market volatility on your share portfolio performance.
Producing above-average returns through trend trading
You have more control and transparency when it comes to the way it’s invested and managed.
Points to Consider:
Easy to trade – you can buy and sell ETFs during the trading hours of the exchange.
Currency risk – if the ETF invests in international assets, you face the risk of currency movements impacting your returns. Some ETFs are 'currency hedged' which removes this risk.
Liquidity risk – some ETFs invest in assets that are not liquid, such as emerging market debt. This can make it difficult at times for the ETF provider to create or redeem securities.
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9. Invest in an Exchange Traded Fund
Low cost – a lot of ETFs have a low management expense ratio (MER). They're usually cheaper than most actively managed funds
Market or sector risk – while ETFs can help you diversify, the market or sector the ETF is tracking could fall in value. For example, if the benchmark or index (such as the ASX200) declines, the value of your ETF investment will also fall.
Diversification – ETFs allow you to buy a basket of shares or assets in a single trade. This can help to diversify within an asset class. ETFs also allow you to invest in markets or assets it can be difficult or expensive to access. You can also diversify across ETFs so there's less chance of loss if an ETF provider collapses.
Points to Consider:
We recommend that you invest $xxx from your bank account/sale of property/withdrawal from super into an Exchange Traded Fund (ETF).
Exchange traded funds (ETFs) are a low-cost way to earn a return similar to an index or a commodity. They can also help to diversify your investments. You can buy and sell units in ETFs, the same way you buy and sell shares.
Benefits:
ETFs are available for a range of asset classes and individual assets.
Tracking errors – an ETF's price can move away from the value of the index or asset it's designed to track. This can be due to illiquidity of the underlying assets, fees, taxes and other factors. This means you could buy or sell when it's not trading at the net asset value (NAV).
An ETF is a managed fund that you can buy or sell on an exchange, such as the Australian Securities Exchange (ASX).
An ETF is traded like a stock throughout the trading day at fluctuating prices.
Transparency – ETFs publish the net asset value (NAV) daily on the ASX. This can help you track how the underlying asset are performing and if the price of the ETF is close to the NAV.
These include: Australian shares international shares sectors of the Australian or international share market, such as mining or financials fixed income investments like bonds precious metals and commodities foreign currencies crypto assets
You will be able to increase the amount you hold within the pension phase of your superannuation fund which will be tax free.
$1.6 million if, at any time between 1 July 2017 and 30 June 2021, the balance of that account was $1.6 million or more between $1.6 and $1.7 million in all other cases, based on the highest ever balance of your transfer balance account.
The general TBC amount is indexed periodically in increments of $100,000, in line with CPI.
[if permitted by fund] This can all be done as an internal transfer and does not require the sale of assets within your fund.
This will mean that you will have two pension accounts with <fund manager name>.
Points to Consider:
We recommend that you commence pension payment of $xx/minimum per month/fortnight/per annum from Month xx from this new account, in addition to your existing pension payment.
We recommend that you take advantage of the recent indexation of the Transfer Balance Cap.
As you had a transfer balance account before 1 July 2021, your personal transfer balance cap will be:
The transfer balance cap limits the total amount of superannuation that can be transferred into a retirement phase pension, where there is no tax on investment earnings.
[New account] We recommend that you rollover xx from your super into a new pension account to make up the amount of your new transfer balance cap.
The cap applies to the combined balance of all superannuation monies transferred to retirement phase (regardless of how many accounts are held) and is monitored by the ATO.
If you have started a retirement phase income stream for the first time since 1 July 2021, you will have a personal transfer balance cap of $1.7 million.
This will assist you to meet your annual living expenses of $xx p.a.
Importantly, amounts held in transition to retirement (TTR) pensions will not count towards a client’s TBC if they have not yet satisfied a full condition of release. The earnings on
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We have calculated your indexed transfer cap to be $XXXX
You will still be able to hold more than your TBC within the superannuation environment, with the remainder needing to remain in accumulation phase.
Benefits:
There is not a single cap that applies to all individuals. Every individual will have their own personal transfer balance cap of between $1.6 and $1.7 million, depending on their circumstances.
The transfer balance cap of $1.6 million was increased from 1 July 2021 to $1.7 million.
[combining into one account] Therefore, we recommend you refresh your pension by rolling the full amount back to Super and then re rolling the higher balance back to the pension phase.
10. Transfer Balance Cap Indexation
Each time a client transfers money into a superannuation income stream, this amount counts towards their personal TBC.
There are forms available to help you write your directive which we can download and provide you that are relevant to your state of residence.
assets supporting these pensions will be taxed at up to 15%, i.e., the same as accumulation phase.
Individuals who exceed their personal transfer balance cap will have their superannuation income streams commuted (in full or in part) back into accumulation phase and notional earnings (see below) on the excess will be subject to an excess transfer balance tax.
You do not require a lawyer to complete a valid directive.
[depending on state, refer to state rules https://www.advancecareplanning.org.au/createyour-plan] It may be possible to create an Advance Care Directive without using an official form. To meet the formal requirements of an Advance Care Directive, it must be in English, include your full name, address, date of birth, be signed by you and dated, and meet witnessing requirements.
Benefits:
o financial matters
11. Advance Care Directive
o medical/health care matters
Having an Advance Care Directive means you can also formally appoint a substitute decisionmaker for when you can no longer make decisions yourself.
An Advance Care Directive will only be used if you do not have capacity to make decisions for yourself or to communicate your preferences. It is sometimes called a living will.
o legal matters
[Client] we recommend you implement an Advance Care Directive to ensure your wishes surrounding medical care are considered when you may not be able to voice your desires.
o personal matters
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An Advance Care Directive is an important part of your end-of-life care. It records your specific preferences for future health care. This includes treatments you would accept or refuse if you had a life-threatening illness or injury.
You can only make a valid Advance Care Directive if you are over 18 and have decision making capacity. Decision making capacity refers to a person’s ability to make day to day decisions about things like:
Your doctor should provide you with information and advice regarding your current health situation. It is a good idea to discuss your Advance Care Directive with your doctor.
Points to Consider:
We recommend that you review your decisions and documents regularly. This is particularly important if there is a change in your health, personal or living situation.
Health professionals and family members will be required to follow a valid directive. They cannot override it.
Where a client has funds in accumulation phase and which cannot be used to commence an income stream, consideration should be given whether to hold them inside or outside the superannuation environment. While accumulation funds are taxed concessionally, it may be even more tax effective holding them personally or in an entity controlled by the family.
Advance Care Directives differ between states and territories. Some state and territory governments have specific forms that you can use.
You can add your Advance Care Directive to your My Heath Record. That way it’s available to your treating doctors if ever needed. You can also store the names of people you have shared your directive with.
You should also share copies of your documents with your enduring guardian, family, friends, carers and your doctors. This will ensure everyone knows what you want.
Choosing your substitute decision-maker is important. It is a good idea to think carefully about who you want to take that role. Your decision-maker will make decisions about your medical treatment if you can’t.
In general, a valid Advance Care Directive will apply in other places in Australia, although there may be some limitations and additional requirements.
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You can change your Advance Care Directive as often as you like, or revoke it, as long as you have capacity.
If you do not revoke your Advance Care Directive, it will not expire.