Deck 13: Social Security

Question 1

Recipients of government allowances:

A) have the same upper assets test threshold limits as pension payment recipients.
B) have a higher income test threshold than pension payment recipients.
C) both a and b
D) none of the above.

Answer 1

D

Question 2

Eligibility for the Schoolkids bonus:

A) is based on a separate assets and income test.
B) requires families or students to register for the bonus payment.
C) both a and b
D) results in 2 instalment payments being made over the course of the year.

Answer 2

D

Question 3

An accommodation charge will be payable by a person entering a nursing home:

A) in all circumstances.
B) where assets exceed a threshold level with payment made periodically or deferred with an appropriate interest charge.
C) where assets exceed a threshold level with payment made as a lump sum.
D) where assets are below a threshold level.

Answer 3

B

Question 4

The general residency requirements to qualify for an Australian age pension stipulate a minimum total term of:

A) 5 years with at least 2 years in one continuous period.
B) 10 years with at least 5 years in one continuous period.
C) 10 years with at least 7 years in one continuous period.
D) none of the above.

Question 5

A sickness allowance is available to a claimant in which of the following circumstances?

A) Where a person is at least 21 years of age but less than age pension age and is temporarily incapacitated and must have a job or full time study to return to when recovered.
B) Where a person is at least 21 years of age but less than age pension age and is permanently incapacitated.
C) Where a person is greater than age pension age and is permanently incapacitated.
D) Where a person of any age is temporarily incapacitated and will return to a job or full-time study when recovered.

Question 6

The youth allowance will not be paid in which of the following circumstances to applicants?

A) To full-time students aged 16-24.
B) To apprentices under the age of 16 years.
C) To 15-year olds who have left school and are living independently.
D) None of the above.

Question 7

The general asset valuation methodology used for assessing eligibility for government benefits and allowances under the assets test is:

A) net market value.
B) fair market value.
C) fair market value less debts owing on the asset.
D) both a and c

Question 8

The deeming of income when assessing eligibility for the age pension under the income test is:

A) applied to all assets of the person.
B) applied to financial assets of the person subject to some exclusions.
C) only applied to some financial assets above a threshold asset level.
D) applied to financial assets of the person subject to some exclusions and uses the higher of the deemed income or actual income returned by these financial assets.

Question 9

The Senior and pensioners tax offset (SAPTO):

A) is payable to eligible persons receiving an age pension.
B) is based on a shade-out threshold income level above which the offset reduces on a dollar-for-dollar basis.
C) has an income test equal to a person's taxable income.
D) none of the above.

Question 10

The age pension is:

A) available to people who are past their average life expectancy.
B) available to people who are aged 67 or older.
C) a means of government income support for retirees who satisfy eligibility requirements based on age, residency and means testing.
D) none of the above.

Question 11

Government residential aged care facilities include:

A) hostels, nursing homes and retirement villages.
B) hostels, nursing homes, retirement villages and granny flats.
C) hostels and nursing homes.
D) hostels and retirement villages.

Question 12

The rationale underlying the provision of social services is based on:

A) the provision of assistance to alleviate financial hard?ship of the unemployed elderly.
B) philosophical reasons, practical and societal arguments.
C) where a person is greater than age pension age and is permanently incapacitated.
D) the provision of assistance to people of good character and those who have not deserted their spouses.

Question 13

The loan amount on a reverse mortgage is:

A) not assessed under the assets test if the funds are spent immediately.
B) not assessed under the assets test if the funds are spent within 90 days after withdrawal.
C) assessed under the assets test regardless if the funds are spent.
D) assessed under the assets test for amounts exceeding $40,000 regardless if the funds are spent.

Question 14

Assessable assets for the pension assets test include:

A) cars.
B) prepaid funeral expenses up to a specified limit.
C) managed funds.
D) both a and c

Question 15

The pension assets test threshold for home owners:

A) is greater for a single person than for a couple.
B) results in no pension payable if the maximum threshold is exceeded for a single person but not necessarily for a couple.
C) results in no pension payable if the maximum threshold is exceeded.
D) will vary depending on whether the family home has more or less than 3 bedrooms.

Question 16

Eligibility for the age pension will be increased for:

A) both men and women to age 67 as from 1 July 2023.
B) both men and women to age 70 as from 1 July 2023.
C) men to age 70 as from 1 July 2017 and women as from 1 July 2023.
D) both men and women to age 70 as from 1 July 2017.

Question 17

The Department of Human Services (DHS) pays:

A) 5 different types of benefits.
B) 23 different types of benefits.
C) more than 140 types of benefits.
D) none of the above.

Question 18

In Australia, social security services are provided by:

A) Centrelink .
B) the Commonwealth Services Delivery Agency.
C) the Department of Veterans Affairs.
D) all of the above.

Question 19

The age pension is:

A) a means-test free to all eligible persons over 70 years of age.
B) a means-test free to all eligible persons over 80 years of age.
C) indexed against the male total average weekly earnings (MTAWE) at a rate of 27.7% for singles and 41.76% for couples combined.
D) tax-free to eligible recipients.

Question 20

Superannuation assets for social security applicants are counted towards the assets test:

A) and income is deemed under the deeming rules until the applicant reaches pension age.
B) and income is deemed under the deeming rules once the applicant reaches pension age.
C) but income will not be deemed under the deeming rules until the applicant reaches pension age.
D) but income will not be deemed under the deeming rules once the applicant reaches pension age.

Question 21

Using the information included in Table 13.13 of the chapter, calculate the 2014 seniors and pensioners tax offset (SAPTO) entitlement, if any, to the nearest dollar for Max and Kate Teakle, both individually and as a total for the couple. Max and Kate have been married for over 35 years and each are eligible for the SAPTO benefit. The following information has been provided for Max and Kate for the 2014 financial year:
$\begin{array}{lrr}\text { Details } & \text { Max (\$) } & \text { Kate (\$) } \\\text { Taxable income } & 30,009 & 29,500 \\\text { Reportable fringe benefits } & 2,501 & 1,550 \\\text { Reportable employer superannuation } & 4,000 & 2,500 \\\text { contributions } & & \\\text { Net investment losses } & 2,200 & 2,200\end{array}$

Question 22

Outline the extent of the assets test exemption for the family home.

Question 23

On what basis do you consider that some assets are allocated as fully assessable, partly assessable or exempt from the pension assets test?

Question 24

Briefly discuss how the income test for family benefits, child care benefits and the baby bonus differs from the taxation calculation of income.

Question 25

Outline the principal differences in eligibility between the 2 categories of unemployment allowances.

Question 26

Ms Hilda Maroofity recently celebrated her 65th birthday on the 1^st day of April 2014 with some friends at the local bingo hall. Approximately 12 months earlier, Hilda's husband Jack passed away and she had only recently received the final distribution of assets from the estate. Now that everything has been transferred, Hilda has total assets valued at their net market value as follows:
$\begin{array}{lr}\text { Details }&\text { Amount (\$) }\\\text { Personal residence } & 410,000 \\\text { Motor vehicle } & 4,000 \\\text { Household and personal effects } & 20,000 \\\text { Cash deposits } & 30,000 \\\text { Managed funds } & 125,250 \\\text { Debentures } & 100,000\end{array}$ While blowing out the birthday candles, one of Hilda's colleagues said to Hilda that she should now be eligible for the age pension. Hilda was not so sure of this as she had read somewhere recently that the government was seeking to increase the minimum age pension age for both men and women.
(a) Advise Hilda as to whether she can now apply for the age pension. Justify your response.
(b) Assuming that she is eligible for the single age pension and that the pension for a single person is that shown in Table 13.3 of the chapter, calculate Hilda's age pension entitlement by applying the;
1 assets test, and the
2 income test.
You may use the Assets test thresholds in Table 13.6; the Income test thresholds in Table 13.7; and the Deeming rates in Table 13.8.
(c) What will be Hilda's actual fortnightly age pension entitlement following your calculations in part (b) of this question?

Question 27

Differentiate the youth allowance calculations where the applicant is classified as independent or not independent.

Question 28

In your opinion, why is the government in the process of changing the eligibility age for the age pension for some applicants?

Question 29

Ms. Gladys Knight was a resident of a government supplied hostel accommodation facility in Adelaide until 20 June 2014 when she was relocated to a higher-level care nursing home. Gladys had originally paid $65,000 on 20 September 2010 as an accommodation bond when she moved to the hostel accommodation facility. Assuming the hostel retained the maximum monthly amount from the accommodation bond, how much is Gladys entitled to be refunded from the accommodation bond when she moves to the nursing home?