Is it worth splitting super contributions with spouse?

I am confused about the benefits of splitting concessional contributions. I am 49 and my wife is 40. I am a house husband with a super balance of $450,000, share portfolio of $360,000 and cash savings of $90,000. My wife earns $150,000 per year, has a negatively geared investment property, a $20,000 share portfolio and a super balance of $200,000. We do not have any children or dependants. My parents are deceased.

In view of the fact that $1.6 million is the most money that can now be held in pension mode, the name of the game is to try to equalise the superannuation balances of both partners in a couple. Because her super balance is much lower than yours there is no immediate benefit in moving her concessional contributions to your fund.

However, there is a nine-year difference in your ages which means money held in your superannuation fund will be able to be accessed before hers. This, in itself, may be a reason, to move some of concessional contributions into your fund.

When the federal government introduced deeming a few years back to assess how much pension a person was entitled to receive, the banks introduced saving accounts, which paid interest at the deeming rate.

Over time the banks have lessened the rate to well below the current deeming rate leaving pensioners "adrift" and being assessed by Centrelink as earning more than they actually are.

A case in point is my 95-year-old mother-in-law who moved into an aged care facility recently. She has been a full age pensioner for 30 years. She had to sell her family home of 50 years to pay for the aged care bond and now has some money left over. She has all her money in a CBA "pensioner security account", which pays slightly better than a term deposit does, but less than what Centrelink is deeming her to earn. This seems grossly unfair. I know that she could possibly earn more than the current deeming rate if she invested her funds in other areas such as shares. But does the government really expect 95-year-old pensioners to invest in the share market?

You make a good point, but keep in mind that the bulk of your mother's money will probably pass to her beneficiaries. Therefore, investing now in good income-producing managed funds will provide a much better income than bank deposits and should also produce growth for the beneficiaries.

Who is considered a "protected person" living in the home if the owner goes into aged care?

For aged care purposes a "protected person" is a spouse or dependent child, a carer who has been living in the home for at least two years who is eligible for an Australian Income Support Payment, or a close relative who has been living in the home for at least five years and who is eligible for an Australian Income Support Payment.

I am a single female, aged 73, retired 12 months ago as a retail worker, and am on a full age pension. I have $100,000 in a superannuation pension account from which I draw the minimum twice a year. I plan to leave that there.

I also have $10,000 sitting in a superannuation accumulation account with the hope of getting another job. But, as I know, I haven't got a snowflake's chance in hell of doing that.

I had thought of moving some of that money to insurance bonds that you had written about previously. What do you think?

In view of your age and limited assets, all earnings on money invested in your own name would be tax-free. Also, the money you have in superannuation in pension mode is in a tax-free environment. Insurance bonds would be a very bad investment for you because they pay tax at 30 per cent flat on earnings. They could be useful if you had substantial assets, and were anticipating problems with beneficiaries when you died, because placing money into insurance bonds takes it outside the terms of the will. However, I can't see this applying to you. Your best option may be to withdraw the $10,000 and put it into a bank account.

Noel Whittaker is the author of Making Money Made Simple and numerous other books on personal finance. His advice is general in nature. Readers should seek their own professional advice before making decisions. Twitter: @noelwhittaker

This story Is it worth splitting super contributions with spouse? first appeared on The Sydney Morning Herald.