5 minute read

A FINANCIAL MOMENT

Next Article
COMMUNITY CALENDAR

COMMUNITY CALENDAR

Authorising someone to help

Hank Jongen, Services Australia

HI everyone,

There are many reasons why you may want someone else to help you manage your Centrelink payments when dealing with Services Australia.

You could be travelling, caring for someone, have too much on your plate, or finding it too difficult to keep your information up to date.

If it’s something you think you’ll need, you can authorise someone to help you do your everyday business with us.

You might want to let friends or family ask us questions to help you better understand your payments. Giving them permission to enquire allows us to talk to them and tell them what’s going on. You can go also give them authority to update your records if you want.

There may be times when you need someone to make decisions for you, or even receive your payments on your behalf to help you manage your finances.

If you do, you can choose to authorise a ‘Correspondence Nominee’ and/or a ‘Payment Nominee’. If you already have a Power of Attorney, we would recommend you also appoint that person to be your nominee.

You may want help from a loved one as you age. You can authorise a ‘correspondence nominee’ to make decisions and act on your behalf. They can ask questions, make updates, even make claims for payments and services on your behalf.

A copy of the letters we send you will also be sent to them. They can even access your Centrelink Online Account to manage your online business with us.

If it’s hard for you to manage your bills, you can authorise a ‘payment nominee’ to help you with your living expenses. They’re required to keep a record of all payments received and how they’ve spent your payment on your behalf.

They can ask questions about how much you’ll be paid and where the payments will go to and they will have limited access to your Centrelink online account.

Remember that having an arrangement in place doesn’t prevent you from speaking with us or doing your business with us. You can cancel any arrangement you have set up at any time. Just call us or cancel it online.

To find out more about the different types of arrangements, go to servicesaustralia.gov.au and search for ‘nominee’.

See you next time.

Hank Jongen

Why is my super falling?

Damian Gibson, Financial Adviser and Partner, Elevate Wealth

FINANCIAL markets have taken a hit in 2022. We have seen the Bond market (generally a safe asset) have one of its worst years in history and some share markets fall into a bear market (a decline of 20 per cent or more).

Why is this occurring? The main reason is inflation. For a country to tame inflation it must increase interest rates, which generally has a negative impact on most asset classes.

Interest rates significantly influence how an economy performs. When rates rise, the cost of money increases, which reduces borrowing and investment, and consequently slows business activity.

While Central Banks have been rapidly increasing interest rates to combat high levels of inflation, financial markets have been pricing in the next concern for the global economy.

It is widely speculated that a global recession is looming and may hit in 2023. If current levels of inflation are persistent it will increase the likelihood of recession. This could see financial markets continue their downward trend.

When you are near, or in, retirement, protecting your super balance becomes equally, if not more important than chasing high returns. Understanding how your super is invested is crucial, especially in the current environment.

On average, most Aussies are invested in default balanced investment funds which hold approximately 70 per cent of your money in growth assets (risky) and approximately 30 per cent in defensive assets (safe).

To some people this mix of growth and defensive might be too risky. The more you have invested in growth assets, typically the more volatile your portfolio will be.

Equally important as reviewing your investments is having a plan to fund your income in retirement. History shows that recessions have been short-lived, with the average life of a recession being one year or less.

In most cases, money inside super will be invested in assets that are subject to volatility. In times of economic downturn some assets will fall in value. If your super balance falls and you need to draw income from your super, it can have adverse impacts on your balance long-term.

This is because when your super fund sells assets to fund your regular income, it must sell down a larger portion of assets to fund the same amount of income. This results in your balance reducing faster than expected over time. However, it can be avoided. Isolating a portion of your balance in a cash option will remove the volatility risk for that portion of money.

Some superannuation providers offer cash accounts which can be a very useful tool in times of economic instability. When retired, or approaching retirement, a cash account can be used to store future income.

This means that instead of your super fund selling your assets at a low point, income can be withdrawn from a cash account instead. This will not only give you certainty of income, but it will also reduce the risk of depleting your balance if financial markets continue to fall.

Recession is the last thing pre-retirees and retirees want to experience, so it is understandable if you’re re-thinking your retirement plans or are nervous about what the future holds for financial markets.

Receiving professional financial advice in times like this is invaluable, not only to help protect your money, but also to provide certainty and a sense of direction.

Information in this article is of a general nature only and has not been tailored to your personal circumstances. Please seek personal advice prior to acting on this information.

Damian Gibson

This article is from: