QUESTION 5 - This question has TWO parts (a), and (b).

Simon was born in February 1966 and is currently 58 years old. He plans to retire at 67. Since starting his job in 2000, Simon has accumulated $300,000 in his superannuation fund, thanks to his employer's contributions. He earns an annual salary package of $150,000 (including SGC from his employer of 12%).

Q5 Part (b)Assume Simon retires at age 67. He remains single and does not own a home. He is contemplating continuing working part-time but worries that it would affect his age pension eligibility. Suppose he will work and earn $500 per fortnight, calculate his age pension eligibility under the income test, based on the following assets and liabilities. Use the pension rates and thresholds discussed in class.

Asset
Cash in savings account (earning 1.5% p.a.)	$25,000
Managed funds (expected rate of return of 3.5% p.a.)	$75,000
House contents	$30,000
Car	$20,000
Share Portfolio	$120,000
Family Home	$1,100,000
TOTAL	$1,370,000
Liabilities
Credit Cards (interest rate of 24% p.a.)	$10,000
Mortgage on Family Home (fixed rate of 5% p.a.)	$150,000
TOTAL	$160,000