Hi Radicool, I don't know much about the franking credits issue, but I would like to understand the parameters in your example a bit better. I'm using the numbers provided from the government site linked below. I apologise if they are not the exact numbers, I know these parameters do change quite a bit, and I may not be reading the correct table in any event. And, I would like to know more about it.
If a man dies suddenly, leaving his wife (who was on a part pension) with no pension due to her sharp increase in assets, then that means that as a combined couple they owned their own home and had combined assets (over and above the home) of less than $848,000 (the cutoff for the part pension), and more than $564,000, as this is the cutoff for her losing the pension altogether (as you say she has done).
So let's take the mean of those two numbers as the value of the couple's non-home assets before the man's passing. That's $706,000. So the now-widow is left with owning her own home (of whatever value), and having $706,000 in dividend-yielding assets beyond that?
The $32,000 you mentioned in franking credits, is that the amount of franked dividends from which a $13,700 benefit can be received from the government? So, prior to her husband's death, the homeowning couple were earning an annual yield from an asset portfolio worth $706,000 , all of which say was invested in franking-benefit-divvy-paying companies that gave an annual income to them of that $32,000? Also, the franking rebate of $13,700 from the government, is that right as per your example? So an annual portfolio/gov't income of $45,700, and the maintenance of a portfolio worth $706,000 (reducing in real annual terms as it is a static number for my enquiry)? And at no stage did either the couple nor the widow have any tax burden on their income?
So, the wife was still drawing a part-pension when the husband was alive. Prior to the husband's departure, the couple owned their (enter figure here)-valued house outright, had $706,000 worth of assets beyond that, from which they were receiving an annual yield of say the $32,000, they were getting $13,700 annually from the government via the franking system, AND the wife was drawing a part-pension?
How much was she drawing on the pension in this position???
When the husband passes on, the wife is left owning the home in her own name (of whatever value), still has $706,000 worth of assets that yield the $32,000 per year, will lose the part-pension because she has moved into the 'single' bracket, and loses the $13,700 annual benefit from franking?
Am I even vaguely close with that? Thanks in advance Rad.
https://www.humanservices.gov.au/individuals/enablers/assets/30621#assetstestlimits
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