Many over 60s are out there looking for love, some online, and some in more traditional places like dance classes and community groups. Whilst falling in love sounds like great fun, for the over 60 Romeos and Juliets, it’s important to consider a few more conventional issues that may arise.
If you or your new partner are in receipt of Centrelink benefits such as the age pension, whether you’re considered single or a couple can have serious implications.
Centrelink benefits are usually subject to the level of your assets or income, but if you’re deemed to be a member of a couple then your partner’s assets and income will count as well. Where you may have been enjoying a retirement that included a part age pension, an employed partner’s income could wipe out your benefit entirely.
If you’re treated as a couple, you won’t just get twice the single limits either, so even if both of you are retired you may find your new partnership has some serious costs!
Don’t think that just keeping separate bank or superannuation accounts will solve the problem either. Beyond financial arrangements, the determination of whether two people constitute a couple take into account:
2. Wills and estate planning
Have you found bliss with your new partner, and you’re ready to tie the knot? That’s fantastic – but you need to know that a new marriage will revoke your existing will. In a scenario where it’s likely that you may have family from a previous relationship – this is really important. Your old will could be revoked, leaving the distribution of your assets to the formula-based intestacy process, and you’ll need advice on how a new will needs to treat your new spouse to ensure it isn’t later challenged in court.
Maybe you’re not quite ready to tie the knot just yet, but that doesn’t mean you’re not in a de facto relationship in the eyes of the law. This could effect who receives your superannuation or pensions if you pass away, especially if you haven’t made binding nominations to your intended beneficiaries.
3. Tax on your home
Your main residence is exempt from capital gains tax (Subdivision 118-B of the Income Tax Assessment Act (1997) for the really curious). But a couple can have only one main residence. So if both you and your partner owned your own home, marital or de facto bliss might have some longer-term tax implications, especially if you choose to rent out one of the properties. In this case, when you first rent the property out it is deemed to be acquired at its market value. If you aren’t aware or forget to obtain a valuation of your property, completing tax returns will become more complicated further down the track.
Having said all of that…
None of the above is a reason to not enjoy a new relationship, which can actually be quite a bit of fun! It just means you need to be a little prepared, and check in on whether this happy change in your life requires a few tweaks to your plan.