Technical and Global update: Aged care, Age pension, and Interest rates (Wanderwell v5)

Technical Update

Aged care

Parameters for Aged care means testing have increased close to 4%, based on the Department of Health's 'Schedule of Fees and Charges for Residential and Home Care', published on 20 September 2022. Future values are set to be indexed by CPI in Pathfinder. Note that these values only applies to care recipients who first enter care from 1 July 2014.

Notably, the Maximum permissible interest rate has increased from 4.07% p.a. (since in 20 March) to 6.31% p.a. 

Age pension

Age pension means test figures have been updated in accordance with Service Australia's 'A guide to Australian Government payments', also published on 20 September 2022. Mainly, values have been indexed upwards between 3-5%, with future threshold values set to be indexed by CPI in Pathfinder.

Global Update

Cash interest rates

With the recent cash rate hikes, we have updated our interest rates (% p.a.) for cash to a higher value in the short term, while maintaining a long term rate based on Lonsec data. This affects the following cash assets:

• Cash

• Shares/managed fund: Cash (direct) and Cash (trust)

Note: The Pension phase total return % and Distribution % (for the Shares/managed funds) are the same as the Interest rate values.

Loan interest rates

As well, we have adjusted our default interest rates (% p.a.) for loans: 

If you are modeling a margin loan, we recommend an interest rate of 8.3%.

Notes for existing users

Please refresh your results for active cases

If you have any existing cases in progress, please refresh your results by clicking the Start Solve button for any scenarios where you created results on or before the release date of Monday 4 November 2022. This will ensure that all your scenarios are consistent. Note that the numbers in your results may change when you re-solve, but it is better to be consistent across scenarios. If you are unsure when your results were created, see How to check when your results were created.

For the updated assumptions, any cases you started before the release date will continue with the previous assumptions. Any cases you create after the release date will have the new assumptions.