Blog – Page 2 – Alice Mantel

Retirees face increased cost of living driven by global factors, but superannuation is buffering the impact, says ASFA

As skyrocketing inflation pressurises household budgets worldwide, the Association of Superannuation Funds of Australia (ASFA) says Australian retirees stand in stark contrast to their overseas counterparts who do not have the safety net provided by compulsory superannuation.

ASFA Deputy CEO, Glen McCrea says despite the current pressure on household budgets, Australian retirees are in a stronger retirement position than their global peers because of Australia’s robust superannuation system and retirement pillar settings.

“In contrast, the age pension remains affordable for the government in Australia where, in aggregate, retirees on average have larger private retirement savings balances than in most countries in the world. This helps cover costs during tougher times, providing a brighter outlook for Australian retirees than is the case for their international counterparts,” said Mr McCrea.

While the major categories of expenditure including food, transport and energy have all increased over the past quarter, analysis of those increases reveals that the causes lie mainly outside Australia.

The ASFA Retirement Standard September Quarter 2022 figures have risen in lockstep with quarterly inflation. Couples aged around 65 living a comfortable retirement now need to spend $68,014 per year and singles $48,266, both up by 1.9 per cent on the previous quarter. The ASFA Comfortable budget assumes one major trip overseas every seven years.

Over the year to September 2022, the amount needed for a single person to fund a comfortable retirement has risen by 6.7 per cent and for a couple by 6.6 per cent, slightly lower than the current CPI of 7.3 per cent.

Strong price rises were recorded across all food and non-food grocery products in the September quarter. These increases reflected a range of price pressures including supply chain disruptions, weather-related events, such as flooding, and increased transport and input costs.

In the 12 months to the September quarter fruit and vegetables prices rose 16.2% and dairy products increased 12.1%. Dairy and related products rose 6.8% due to higher milk prices.

Over the year to the September quarter, imported inflation saw oils and fats up 19.3%, coffee up 10.7% and gas 16.6% and automotive fuel 18.0%. These prices are set to remain high while geopolitical concerns persist.

Increased demand, high fuel prices and capacity constraints saw domestic travel and accommodation up 10.8% over the year and international travel and accommodation up 25.3%.

Meals out and take away foods rose 2.9% due to rising input costs and ongoing supply and labour shortages. Alcohol rose 1.4% due to the increase in the bi-annual excise tax for alcohol on 1 August.

Details for the various updated budgets follow.

Table 1: Budgets for various households and living standards for those aged around 65 (September quarter 2022, national)

Household type	Single Modest	Couple Modest	Single Comfortable	Couple Comfortable
Housing – ongoing only	$109.24	$122.66	$128.37	$133.94
Energy	$35.05	$47.08	$44.41	$55.07
Food	$104.04	$192.89	$134.52	$233.80
Clothing	$20.86	$39.64	$27.86	$51.88
Household goods and services	$37.12	$43.51	$82.45	$101.52
Health	$53.33	$103.11	$109.02	$204.32
Transport	$103.93	$110.70	$169.82	$183.93
Leisure	$104.30	$163.73	$205.69	$309.20
Communications	$17.99	$20.27	$22.50	$29.29
Total per week	$585.86	$843.57	$924.64	$1,302.95
Total per year	$30,582	$44,034	$48,266	$68,014

Table 2: Budgets for various households and living standards for those aged around 85 (September quarter 2022, national)

Household type	Single Modest	Couple Modest	Single Comfortable	Couple Comfortable
Housing – ongoing only	$109.24	$122.66	$128.37	$133.94
Energy	$35.05	$47.08	$44.41	$55.07
Food	$104.04	$192.89	$134.52	$233.80
Clothing	$20.86	$39.64	$27.86	$51.88
Household goods and services	$54.05	$77.78	$160.70	$192.51
Health	$93.02	$129.74	$153.58	$241.95
Transport	$41.68	$52.09	$46.88	$57.30
Leisure	$67.46	$96.70	$140.39	$196.53
Communications	$17.99	$20.27	$22.50	$29.29
Total per week	$543.65	$778.84	$859.21	$1,192.28
Total per year	$28,379	$40,656	$44,851	$62,237

The figures in each case assume that the retiree/s own their own home and relate to expenditure by the household. This can be greater than household income after income tax where there is a drawdown on capital over the period of retirement. All calculations are weekly, unless otherwise stated. Annual figure is 52.2 times the weekly figure.

More information

Costs and summary figures can be accessed via the ASFA website, https://www.superannuation.asn.au/media/media-releases/2022/media-release-17-november-2022

Law Council calls for more action on elder abuse

The Law Council of Australia has continued to call for measures that will better protect older Australians.

“Elder abuse is insidious and more prevalent than I think any of us would like to believe,” Law Council of Australia President, Mr Tass Liveris said.

“Incidents of abuse may be physical, social, financial, psychological or sexual and can include mistreatment and neglect.

“What makes it most devastating is that the perpetrator is often someone the older person trusts and relies on, such as a family member, friend or carer.

“We must stamp out elder abuse and protect vulnerable members of our community.”

The Law Council is calling for:
• Appropriate, sustained and increased funding for specialist legal assistance and aged care advocacy services, government agencies, and relevant State and Territory tribunals that work towards reducing elder abuse.
• Implementation of outstanding priorities identified in the Australian Law Reform Commission and Royal Commission into Aged Care Quality and Safety (Royal Commission) reports and the National Plan to Respond to the Abuse of Older Persons 2019-2023, including:
• developing a new Aged Care Act which is consistent with the recommendations of the Royal Commission report by 1 July 2023; and
• ensuring that those in residential aged care facilities have legal redress to protect them from abuse, whether perpetrated by care providers (including in the use of restrictive practices) or fellow residents.

At the end of last year, the Law Council of Australia welcomed the decision by Commonwealth, State and Territory Attorneys-General to prioritise enduring power of attorney (EPOA) law reform to reduce the risk of older Australians being subject to financial abuse and looks forward to this work coming to fruition.

EPOA arrangements are intended to ensure a person’s interests are protected when they lose capacity to make decisions for themselves. However, in the absence of adequate legal safeguards, financial elder abuse by appointed decision-makers may be facilitated by such arrangements.

Law Council of Australia, 15/06/2022, https://www.lawcouncil.asn.au/media/media-releases/australia-must-address-elder-abuse

Separated? Why you need to review your Will

Scanlan Carroll Lawyers, Carol Pagès

If you have recently separated, your focus will likely be on what to do about the property you have with your ex partner, and arrangements for your children.
So why do you need to think about your Will?

If you have a Will, it may be that each of you and your ex partner have left everything to each other, and then to your children.

If you are separated, it is important to take the time to review all of your estate planning documents – this includes your Will, your Powers of Attorney, and your Binding Death Benefit Nomination of your superannuation fund.

Each of these documents is explained below:
Your Will – your Will sets out how you would like your assets distributed when you die and who is responsible for carrying out your wishes. You can also include clauses such as your nominated guardian for children under 18, and specific gifts that you would like to make. In your Will you specify who will be your executor. Your executor stands in your shoes when you die, and they will carry out your wishes by calling in your assets and distributing same to your chosen beneficiaries.

Enduring Power of Attorney – While you are alive, your attorney is able to stand in your shoes and carry out financial transactions on your behalf using the power – this can be buying or selling property on your behalf if you are away on holidays, transacting on your bank account paying your bills for you, and so on. Your nominated attorney can also make personal care decisions for you – such as choosing a care facility if you are unable to look after yourself, or limiting or restricting a person from visiting you if they consider this is not in your interests.
A separate medical decision maker (which can be the same person) will be able to make medical decisions on your behalf, such as consenting to surgery if you are unable to. As the powers are enduring, they continue even if you later suffer an illness or injury which means you are unable to make decisions for yourself.

Binding Death Benefit Nomination (BDBN) – many people have significant balances in superannuation and also life insurance policies attached to their funds. As part of your estate planning process, we provide you with advice about your BDBN as superannuation is generally considered to be ‘outside’ of your estate and what is covered by your Will. It is important that this valuable asset is passed on to your loved ones in the way that you intended.

Why is this important?
Separation does not trigger the end of your existing Will, Powers of Attorney or BDBN. Many people are surprised to learn that divorce does not invalidate your Will. Divorce revokes a gift to your former spouse or appointment as your executor, and remarriage can invalidate your Will save for references made to your current spouse.

What if I don’t have a Will?
If you don’t have a Will, your assets will be passed on to your relatives according to the rules of intestacy. The rules in Victoria are that if you die, your estate goes to:
Your spouse or domestic partner if you have no children;
Your spouse or domestic partner, if you have children with that partner;
If you have children to a previous relationship, your spouse will receive a statutory legacy (currently $480,700), your personal possessions, and 50% of the balance of your estate. Your children will equally share the remaining 50% of your estate.

Case study – who inherits?
Alex separated from Danielle three years ago. They were married however had no children. They were able to resolve their family law property division fairly amicably, and finalized their family law case with Consent Orders dividing their property.
Alex and Danielle prepared their Wills when they were first married 10 years ago, each leaving their estate to the other.
Alex has re-partnered with Mary, and they have been together for 20 months.
Alex and Danielle haven’t yet filed for divorce as they have not gotten around to it yet. Alex has the forms on the kitchen table to sign.
Alex tragically dies before signing his divorce form.
Who do Alex’s assets go to………..?
Depending on a number of factors – it’s Danielle – his former wife.
The gifts to Danielle in Alex’s Will are not revoked as they are not divorced.
If Alex owned property such as a house with Mary, and the house was in joint names – the house would be outside of Alex’s estate and pass straight to Mary.
What if Alex didn’t have a Will?
Based on the length of the relationship with Mary (along with several other factors which would need to be taken into account under the Family Law Act 1975 (Cth)), Mary is not likely to be considered a spouse.
Danielle is still Alex’s legal spouse, as they are not divorced, so Danielle receives Alex’s estate.
Summary
Mary may have grounds to make a claim in either scenario, but this can be a long and expensive legal process which no one wants to go through after the loss of a loved one.
The above example shows that how an asset passes on after death can depend on a number of factors. To ensure that your wishes are as you intended, it is important to obtain advice in relation to your family law and estate planning matters.
This is important at separation, and the time following separation – for example, when you re-partner, it is worth considering the impact of your new relationship and property ownership upon your children, and your new partner.

Incapacity: Choose Who Makes Decisions for You

By Russell Kennedy – Clare Hesbrook and Ilana Kacev

Estate Planning isn’t just about your Will, equally important are the documents in which you choose and who makes decisions for you if you lose capacity during your lifetime.

Choose Who Decides If you want to choose who makes decisions for you regarding your finances, property, lifestyle and medical treatment, it is essential that you have in place:
• An Enduring Power of Attorney and an Appointment of Medical Treatment Decision Maker (if you live in Victoria); or
• An Enduring Power of Attorney and an Appointment of Enduring Guardian (if you live in New South Wales).

Losing capacity
Currently it is estimated that almost half a million Australians are living with Dementia and these numbers are expected to continue to rise. Aside from Dementia, there are many other reasons why you may lose capacity to make decisions for yourself.

Public Trustee & Guardian appointments
On 14 March 2022, Four Corners aired an episode investigating the difficulties encountered by those who did not have these documents in place, at a time when they were deemed to have lost capacity. The Public Trustee & Guardian were appointed to take control of their finances and make decisions about their lifestyle, including where they lived.
The Four Corners episode highlights the importance of proactive estate planning and especially, making arrangements in the event of your future incapacity.

What it means when you have a Power of Attorney and Appointment of Enduring Guardian/Medical Treatment Decision Maker in place:
1. You decide who makes decisions about your money and lifestyle. You can choose the people who care about you and respect your values.
2. You decide how your chosen attorneys and guardians act and when their powers come into effect. You can provide directions about how they should act in end of life care decisions for example.
3. You preserve your wealth. A public trustee and guardian takes payment for their services from your assets. When you choose your own attorney and guardian (unless you choose to appoint a professional attorney) you do not generally pay for acting.

Taking positive action to put your estate planning affairs in order means that you get to decide who makes decisions over your life, rather than having it decided for you.

Let’s talk about women and retirement

Why is retirement different for women? Women retire with about 60% of the superannuation funds that men have. They live 5 years longer and they are far more reliant on the aged pension. On the plus side – women are more likely to retain their friendship networks, more likely to be the principal carer for their partner, their parents and their grandchildren, as well being more likely to volunteer to help others.
Listen to my wide-ranging discussion with community radio 2RDJ broadcaster, Neil Lithgow about women and retirement. Listen here:

FIRST NATIONAL STUDY FINDS MORE ELDER ABUSE

In the year prior to the first national survey conducted into elder abuse, one in six older Australians reported they had experienced abuse most often committed by family members.

The National Elder Abuse Prevalence Study (NEAPS) survey, carried out between February and May 2020, showed that the most common subtype was psychological abuse (12%), followed by neglect (3%), financial abuse (2%), physical abuse (2%) and sexual abuse (1%). Some of the 7,000 participants aged over 65 years reported several types of abuse occurring, usually psychological abuse and neglect.

Types of elder abuse

Nearly one in five elder abuse perpetrators are children (18%), or their partners or grandchildren and about one in 10 elder abuse perpetrators are intimate partners. Children (most often, sons) are most likely to perpetrate financial abuse as well as friends and service providers.

Children are also the largest group of perpetrators of psychological and physical abuse while friends, acquaintances and spouses were most likely to perpetrate sexual abuse.
Children and intimate partners are both significant perpetrator groups (24-25% for each) of neglect. Professional carers (14%) and service providers (13%) are bigger perpetrator groups for neglect than for other abuse subtypes.

Psychological abuse is not always recognized by either victims or perpetrators. It includes insulting, belittling or threatening behaviour towards a person. Family and friends are the best protection for a person experiencing abuse rather than the person who is unlikely to directly confront the perpetrator.

Factors that increase risk of abuse

While women were slightly more likely to be the subject of abuse than men, other factors increased the risk of experiencing abuse, namely, being poorer, being single, separated or divorced and living in rented housing or owning a house with a debt against it. Having poor physical or psychological health also increased the risk of experiencing abuse.

The study did not include people living in aged care or suffering cognitive decline which could increase the identified prevalence of elder abuse in the community.
The federal government has announced additional funding to build on the National Plan to Respond to the Abuse of Older People. This announcement follows on from recommendations made by the Aged Care Quality and Safety Commission to increase funding to home care packages and create new training places for aged care staff.

AIFS, National Elder Abuse Prevalence Study, https://aifs.gov.au/publications/national-elder-abuse-prevalence-study

Be part of this research project

By simply spending 30 minutes of your time answering these questions about yourself, you can make a contribution to research about ageing and Australian women.

What is AgeHAPPY?

The Healthy Ageing Project Population Youth-senior (AgeHAPPY) is an online heath survey for Australians. The Healthy Ageing Project (HAP) mission is to improve the understanding of health across a lifespan to promote healthy ageing and prevent disease.

This round of the survey commenced in 2020. It started with a pilot study called HAP. Data on self-reported health, lifestyle, mood, and vascular risk factors is being collected from male and female participants aged 18 years and over. AgeHAPPY is a continuation of the Women’s Healthy Ageing Project (WHAP).

WHAP commenced in 1990 as a study examining the health of Australian women from midlife (then aged 45-55 years) before the menopausal transition and into ageing. The study has almost 30 years of data on mood, dietary intake, risky behaviours, physical activity and social connectedness among other factors. WHAP continues to follow up these women, who are now all aged over 70 years. The children of the original participants have now joined the study as of 2021 commencing the WHAP generations study.

AgeHAPPY is a study into the lifelong effects of lifestyle and habits on health and the progression of ageing. Everyone over 18 years of age can participate in the online health questionnaire. This research ultimately contributes to promoting healthy ageing in Australia and to improve the wellbeing of all Australians.

Chronic disease is the largest cause of death and disability in Australian society and throughout the western world. The information collected will enable greater understanding of the impact of social and behavioural factors on health and influence policies toward better prevention and early detection of health issues, including Parkinson’s and Alzheimer’s disease.

Most studies on “ageing” are usually limited to the elderly. HAP defines ageing as a phenomenon that occurs continuously throughout all stages of life – and presents its health challenges at all ages. Many studies show that indicators for chronic disease occur years before onset.

Through this online health survey, HAP can collect valuable demographic, clinical, behavioural and lifestyle data which allows them to analyse the impact of factors on health and ageing at every age.

Get involved in the AgeHAPPY study

The first section of the study is an online questionnaire covering areas such as demographic information, general health history, family health history, mood, quality of life, physical activity, sleep, diet, alcohol intake, smoking, physical function, social relationships, and negative life events.

The second section is a cognitive component which tests thinking skills, a bit like a brain game. A participant will be invited to complete the online cognitive testing from the Healthy Brain Initiative – Brain Health Registry (HBI-BHR). The Brain Health Registry is a web-based study that enables researchers to efficiently identify, assess and monitor the brain changes associated with the progression of neurodegenerative diseases and brain ageing more efficiently.

In 12 months’ time, HAP will contact you to complete a follow-up online questionnaire.

To participate, please follow the link:
https://medicine.unimelb.edu.au/research-groups/medicine-and-radiology-research/royal-melbourne-hospital/healthy-ageing-program/healthy-ageing-project

Australia’s health by socio-economic status

However you describe it, being poor, disadvantaged, or living in a low socioeconomic area is more likely to make you more susceptible to preventable chronic diseases such as heart disease, arthritis and diabetes.

Australia’s Health Tracker by Socioeconomic Status 2021 reports on the health status of Australians based on their socioeconomic standard which the study has found has a major impact on people’s health. Families and individuals with limited resources not only have more chronic disease, they are at greater risk of dying prematurely as a result of chronic health conditions. People living with mental ill-health are less likely to participate in employment, which in itself, is associated with an improvement in general mental health levels.

The ten million people living in the 40% of communities with lower and lowest socioeconomic status have much higher rates of preventable cardiovascular diseases, cancer, diabetes or chronic respiratory diseases than others in the population. These communities also have the highest rates of suicide throughout the nation.

Risk factors that are likely to contribute to this higher rate of illness and premature death include:
• Physical inactivity
• Lifetime alcohol consumption
• Daily tobacco use
• Unemployment as a result of mental health issues.

These health disparities within the Australian population are persistent despite considerable policy reform and efforts to improve services in recent decades. The targets for a healthier Australia were developed by the Australian Health Policy Collaboration, a national network of leading health experts and organisations. The Collaboration has worked with the support of the Mitchell Institute, Victoria University since 2014 to influence public and policy awareness and action to reduce high rates of preventable chronic disease in the Australian population.

The report sets health targets for medical conditions such as:
• Obesity – Obesity is a risk factor for cardiovascular disease, high blood pressure, type 2 diabetes, asthma, back pain and some cancers.
• High cholesterol – High levels of low-density lipoprotein cholesterol are a risk factor for heart disease. National data from 2011-12 is the most recent available data and indicated that close to one-third of all socioeconomic groups were estimated to have high cholesterol levels.
• High blood pressure – Rates of reported high blood pressure are relatively consistent across socioeconomic groups. High blood pressure is often caused by poor diet, physical inactivity, obesity and excessive alcohol consumption. It is a risk factor for chronic conditions including stroke, heart diseases, and chronic kidney disease
• Diabetes – Hospitalisations and deaths related to diabetes are, respectively, 2 and 2.3 times as high in the lowest socioeconomic communities compared to the highest.

Australia’s Health Tracker by Socioeconomic Status 2021 report, The Mitchell Institute at Victoria University. Australia’s Health Tracker by Socioeconomic Status 2021 report

Find your new opportunities

Age means finding new purpose — Finally released from work, we can become our truer selves

#everywomansguide