Thinking of retiring and getting the age pension? Because the age pension is “means tested” you be will be asked about any interests in companies or trusts. Under the social security law the assets of a private company or trust may be “attributed” to you if you are a director, shareholder, trustee or beneficiary. If you are a member your assets form part of your partner’s assets.
When asked to provide information many pension applicants tell Centrelink that the company or trust hasn’t been active for years and there are no assets. It comes as a surprise when after Centrelink reviews the company or trust information shareholder or beneficiary loans in the financial statements are included in the person’s assets. People will claim they are only book entries, the company or trust has no assets, or did not know that their accountant had made the entry.
Simply resigning from the company or trust or giving your interest to another family member can cause you further problems. Any transfer for less than market value within the previous 5 years can still be attributed to you as an asset.
So what should you take away from this? Firstly you need to consider your asset position at least 5 years before you turn pension age. Secondly you need to think about whether you hold a position or interest in a private company or trust including where the company or trust may no longer be active. Thirdly should you take steps to wind-up the company or trust.