Ask Noel NOEL WHITTAKER

My wife's parents are in their late 80s. We have visited several aged-care homes and it seems most want to separate this loving couple into single rooms and charge two bonds of up to $450,000 each. This wipes out the revenue from their house sale (although, of course, they do get a portion of the bond back after five years or prior to death). It is their only major asset. Is there a better way to manage this transition and the assets? Could the house be rented to generate funds for other fees?

Moving a couple into aged-care is often harder than moving a single person. The asset assessment used to determine the maximum amount of accommodation payment (accommodation bond or charge) can have up to four different outcomes depending on the timing of that assessment. If they move into aged-care on the same day and complete an asset assessment on entry, half of the house will be assessed against each (as you describe). However, if one person moves in while the other remains at home (even for one day), the value of the house will be exempt from the first and only half will be assessed against the second. If the assets outside the home are less than $40,500 each at the time the first one moves in, they will be considered a supported resident and no accommodation payment will be charged. This is a minefield. Take advice from a financial planner who specialises in aged-care.

One of my colleagues, who is aged over 60, wants to know whether it's worth moving all their shares into their DIY super fund. If the fund pays no tax, what happens to the fully franked dividends? Can they claim the tax paid back?

It's always best to keep shares inside an SMSF because the tax rate is lower. The problem is the possibility of capital gains tax when moving the shares to the fund. Your accountant will be able to do the sums for you. Franking credits can be claimed back by the fund.

My wife and I are co-trustees and co-contributors to our super fund. We're both retired and have managed the fund for five years. As the fund provides a meagre income from interest and dividends, we are concerned that if one of us dies, the capital of the deceased partner will be removed from the fund, causing the income to be halved. Are there any means that would allow the surviving partner to retain the deceased partner's contributions in the fund, enabling a sustainable income with the benefits we are currently enjoying?

If the deceased had been receiving a pension from the fund and the trust deed allows a reversionary pension benefit to be paid to the surviving spouse, the surviving spouse can continue to receive the deceased's pension. If not, the SMSF must pay out the death benefit. If eligible, the recipient of the death benefit can contribute the money back into the SMSF as a personal contribution. A person cannot contribute to super unless they are under 65 or can pass the work test between 65 and 75.

My husband is 61 and I'm 57. He has super of $350,000 and we owe $150,000 on our home. We were wondering if it would be wise to pay off this debt by taking a lump sum out of his super? My husband has a casual job earning roughly $400 a week and we are not paying anything off the debt at the moment.

You will need to pay off the debt at some stage and I can't see any problem with taking $150,000 from the super to pay it now as the withdrawal should be tax-free because your husband is over 60. This will give you a guaranteed return in super that's equivalent to the current rate being charged on the mortgage. Take advice from Centrelink's Financial Information Service as, on the information provided, you may qualify for some benefits.

I earn $110,000 a year and salary sacrifice the maximum $25,000 into super from my employer contribution and our own funds. My wife earns $65,000 a year and contributes a total of $10,000 into super as a concessional contribution from her employer and our own funds. To increase my tax deduction, can I contribute another $15,000 to my wife's super fund on top of my $25,000? If so, how do I do it?

You cannot salary sacrifice into your wife's fund. However, in some cases, there are benefits to building up her balance at the expense of yours. This usually happens if one party is much older than the other and putting funds in that person's name means you can have access earlier, or it may be that one party is much younger, in which case money in super is sheltered from Centrelink. If this is applicable to your situation, take advice because it may be possible to transfer part of the contributions made by you in a year to her fund.

My younger brother is earning a good wage and wants to buy his first house however, he doesn't have a deposit. I have money I can lend him, which I am more than happy to do, but I need to understand shared equity and how I would structure the arrangement.

In a shared-equity arrangement, an investor such as yourself usually contributes interest-free funds for a deposit in return for a share of the capital gain. Unfortunately, there are problems if it is to be done as a private arrangement. For example, if the owner lives in the house for many years, it is impossible for the vendor to get their money back, and if the investor is on the title deed, there will be capital gains tax on the sale. A simpler option may be for you to lend him a deposit at an agreed interest rate, then when he has built up equity in the property because of an increase in value or a reduction in the debt, he could pay you back by refinancing.

I have a 28-year-old son on a disability pension who lives in public housing and will probably never be able to work again. He has a small amount of superannuation from earlier years. If I leave him money in my will, he might lose his pension and housing benefits. Can I contribute to his super fund as a way of making a provision for his later years?

You can give him money, which he can contribute to super, but it will be inaccessible until he reaches his preservation age at least 30 years away. This may not be a drawback in light of what you are proposing and a significant benefit is that money in superannuation cannot be accessed by creditors if he gets into financial strife. You should also talk to your solicitor about including a testamentary trust provision in your will. I assume you hold an enduring power of attorney for him.

I used to have my super invested in a balanced option through a super fund. However, last year I moved it into a fixed-interest portfolio. As I'm 55, I have a transition-to-retirement pension. Would it be beneficial to have a self-managed super fund to avoid paying the super company management fees?

It usually costs at least $3000 a year to run your own fund. This is why ASIC recommends you have at least $250,000 in your fund to make it worthwhile. You would have to ask your adviser to do the sums because I have no idea of the balance of your portfolio. However, I do think the biggest risk you run right now is having all your money in fixed interest. If interest rates rise, you could face losses.