Explain any contribution restrictions placed on these

Assignment Help Finance Basics

Reference no: EM133632600

Question: Joshua and Claire both age 63 plan to retire in two years. Their home in a major capital city is worth $1,700,000 (no mortgage). They each have a superannuation balance of $150,000 (includes a tax-free component of $22,500). They are quite conservative investors. Their current expenses are $70,000 per annum and they like the idea of moving to a regional area to be closer to their parents who are aged in their late 80s. They expect to buy a new home for $1 million and use the balance of $700,000 for their retirement. They like travelling and want to do much as they can in the first 10 years of their retirement.

Claire's mother Ruby is unwell and her health is rapidly deteriorating. An Aged Care Assessment Team (ACAT) assessment confirms the need to relocate to an aged care facility. After some research, Claire found a suitable aged care facility in the same regional centre where they plan to move. However, Claire is concerned as the entry cost (Residential Accommodation Deposit) is $320,000 but Claire's father is still well enough to live in his home valued at $750,000. They have $40,000 in a term deposit and $3,000 in savings and are entitled to the full Age Pension.

Calculate her aged care fees

What are her options in paying the accomodation contribution of her aged care fees?
Assume the client's father sold the home and used some of the proceeds to pay for the aged care accommodation contribution as a Refundable Accommodation Deposit. What would be her aged care fees in this case?

The clients want to know more about accessing their superannuation balances.

Explain the conditions that apply to access their superannuation, and what form the benefits may be paid in.
Assume they nominate to withdraw an income stream of $20,000 each per annum, what is the minimum amount for the year if they commenced an account-based pension on 1 September and how would this be taxed?
Explain any contribution restrictions placed on these clients. Provide a recommendation to clients on how they should contribute the sale proceeds into their superannuation most effectively.

Reference no: EM133632600

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