Postcode by postcode: a clever way to include homes in the age pension assets test

Your postcode could be the ‘equaliser’ in family home inclusion plan.

Postcode by postcode: a clever way to include homes in the age pension assets test
Under the Institute of Actuaries proposal, only retirees with more valuable than normal homes would face an assets test, and only on that part of the value that was higher than normal. Shutterstock

Anthony Asher, UNSW

Here’s the boldest idea the government’s inquiry into retirement incomes should consider but might not: no longer exempting all of the value of each retiree’s home from the pension assets test.

The test would merely exempt part of the value of retirees’ homes. The change would free up funds to support other retirees who are struggling because they have to pay rent.

It’s an idea with an impressive lineage.

The Henry Tax Review suggested exempting only the first $1.2 million. The bit above $1.2 million would be regarded as an asset and subject to the test.

Henry Tax Review

The review said it would hit only 10,000 retirees. The $1.2 million figure was in 2009 dollars, meaning that if the change came in today the review would want it to cut in at a higher dollar figure.

The Grattan Institute suggests a lower cut in – $500,000. The first $500,000 of each mortgaged home would remain exempt from the pension assets test, the part above $500,000 would be regarded as an asset. Grattan says it would save the budget $1 billion to $2 billion a year.

The Australian Chamber of Commerce and Industry agrees, as does the Actuaries Institute.

The idea scares homeowners
Who could object?

Labor treasury spokesman Jim Chalmers. Glenn Hunt/AAP

The Combined Pensioners and Superannuants Association says asset testing the family home would be “massively unfair”, targeting the vulnerable.

But people with high-value mortgage-free homes aren’t normally thought of as vulnerable.

Labor’s treasury spokesman Jim Chalmers says it would push more retirees “off the pension, out of their homes, or both”.

He is right about the former, but wrong to think the retirees who suffered a cut in their pension or lost their pension would be badly off.

The worst off retirees, as recognised by a Senate Committee, are those without homes making do with grossly inadequate rental assistance.

Right now, it is possible for a single person owning a $1.3 million mortgage-free home and $260,000 of other assets to get the full Age Pension.

Assuming that person draws down on those other assets at the rate of five per cent per year, he or she can spend $37,000 per year and pay no rent.

Yet homeowners do well
A non-home owner with $785,000, or half the assets, would be denied the pension.

Like the much-richer homeowner, that person would be able to draw an income of about $37,000 per year, but half it will have to go on rent.

It’s hardly fair.

It encourages retirees with homes to stash more and more of their assets into them in order to get the pension (and pass something valuable on to their children). Retirees with lesser assets miss out and have to rent.

But fairness is in the eye of the beholder.

The problem is that a ceiling on exemption from the assets test that seems fair in one part of Australia might not seem fair in another where home prices and perhaps the cost of living is higher.

Our suggestion could be sold as fair
In order to make more equal treatment seem fair to all retirees with homes I and fellow actuary Colin Grenfell have worked up an option that would use the median (typical) price for each postcode as the cut off point for exemption from the assets test.

It would happen postcode by postcode, updated every year using council valuations and as the median prices changed.

Only the owners of homes whose values were atypical for the area would be affected, and only that part of the value of their home that was atypical would be included in the assets test.


Read more: Retiree home ownership is about to plummet. Soon little more than half will own where they live


Its key selling point is that it wouldn’t threaten homeowners with values at and below the average for their area.

The funds freed could increase the overall pension, but would probably be better applied to lifting rent assistance.

It’s important to treat retirees in the same financial circumstances the same, regardless of whether they own a mortgage-free home, and fewer and fewer retirees are owning mortgage-free homes.

It would have the added benefit of reducing the pressure on our parents and grandparents to own houses with bedrooms on the first floor that are never opened, not until they die and their houses are sold.


The Conversation


Anthony Asher, Associate Professor, UNSW

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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    COMMENTS

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    hyperbole
    28th Oct 2019
    9:40am
    great idea
    Anonymous
    28th Oct 2019
    4:41pm
    It is a terrible idea and makes no sense at all.
    Anonymous
    28th Oct 2019
    4:43pm
    If I live half way between Sydney and Brisbane if they pick Brisbane I lose big time.
    Karl Marx
    28th Oct 2019
    9:36pm
    Preposterous idea to even suggest home owners be penalised to subsidise non homeowners.
    Blinky
    29th Oct 2019
    11:26am
    How is thay a great idea?
    A great idea would be to also include the politicians' home in their asset test (which they are exempt from, as they are holy cows).
    If they pick on pensioners, that should include retired pollies!!!
    seadog
    28th Oct 2019
    10:14am
    Every time this comes up it punishes those who have worked hard all their life to pay for their home. The BIG thing that is forgotten is that home owners have to pay insurance and rates as well as any maintenance that occurs. This is never taken into consideration. It is very easy for those who probably will never receive an Age Pension to take pot shots at those who may.
    sunnyOz
    28th Oct 2019
    12:01pm
    Agree seadog - makes me very angry. I have always been single, always had a job since 16 - mostly low paying jobs. But I worked hard and in mid 40's, bought an absolute dump of a place in a run down area 41kms from main city. I'm now on pension, but over the years, I have worked hard to make my small 2BR house my home. Nothing elaborate or palatial, but suits me. 25 years later - the area I live in has gone from a dump to desirable. My house would be the smallest block and house in the street - yet 'by postcode' I would be penalised. My council charges the highest rates in the state, I still have house maintenance and upkeep, and I would love to know just who it is that decides what house is 'atypical' of an area.
    "Fair"? - rubbish.
    KSS
    28th Oct 2019
    1:00pm
    Don't forget Strata fees for those who own their unit!

    I am just a little fed-up with those who made different choices and ended up not owning thier home wanting to divest those of us who did, however modest our homes may be.

    I can see merit with one or two people continuning in a 4-6 bedroom home they can no longer afford to maintain, selling up to downsize. but the rest of us cannot eat bricks!
    Discontented
    28th Oct 2019
    2:06pm
    Here we go again,somehow the wheels being put into motion creating division between people having a house and those having to rent.They done it with franking credits now this,why do I feel like I have a target on my arse because I worked hard all my life and saved for my retirement.
    Discontented
    28th Oct 2019
    2:06pm
    Here we go again,somehow the wheels being put into motion creating division between people having a house and those having to rent.They done it with franking credits now this,why do I feel like I have a target on my arse because I worked hard all my life and saved for my retirement.
    Play Fairly
    28th Oct 2019
    4:22pm
    The government is continually on the prowl, seeking to move the goalposts and looking to make savings and reductions to Aged Pension entitlements. 

    Stop further complicating the latter part of people's lives.
    The Pension has been bought and paid for a million times over by our retired workers!!!!!!!!!!!!!!!!

    The Aged Pension is a worker's/taxpayer's entitlement to sustain them when they grow old and can no longer work.

    If the government can't properly manage their distribution of the Nation's wealth to properly look after our aged ex-workforce, then perhaps it's time for the government to gaze inwardly and examine the extent of their own obscene entitlements they amass and collect on the public purse.

    Also,  isn't it about time that we took the Aged Pension "out of the bedroom".   Each retired worker deserves to be paid the same amount of Pension, whether they are single or form part of a couple.   Your marital status should have no bearing on the amount of Aged Pension you receive.
    Anonymous
    28th Oct 2019
    7:40pm
    Looking at their handling of water in the Murray, there is no hope at all for any sense or reason when it comes to anything involving handling our cash...
    Anonymous
    28th Oct 2019
    8:13pm
    Agree, seadog, and several other comments following in the same vein. Those pushing such ideas suffer from "sour grapes" jealousy either because they have too much so will never get the Age Pension or those who did not make the sacrifices needed to get a home (may or maybe not in their full control). Those who did sacrifice paid it all out of AFTER TAX money and no Govt should ever cast a dirty thieving eye on this asset.

    What YLC also doesn't seem to accept is that the Treasurer has ALREADY RULED OUT ANY CHANGE REGARDING INCLUDING THE FAMILY HOME in the Assets Test so I wish they would stop repeating this unacceptable rubbish! Even Politicians understand that they will lose the next election if they try this stunt!
    geordie
    29th Oct 2019
    12:12pm
    So, does this mean that if I dont take a government pension I should be allowed to claim that amount against my tax each year. Whats good for the goose etc.,
    Hoohoo
    31st Oct 2019
    5:00pm
    GeorgeM, you give a balanced angle on this issue, which is appreciated. I could never have had the deposit necessary to buy my first home, had I not inherited some money after my parents' deaths. I live frugally & fully own my current home now.

    Yet my best friend can't save enough for a deposit, despite her having a much greater income than I do. She was a single mum & had other caring duties besides, so could only work part time when she was younger. Sometimes I am a little envious of how much money she has to splash about, including overseas travel, which I can't even consider. Yet I don't blame her for spending up while she can because even if she had the deposit now, the banks would not consider lending to her now she's in her late 50's. She has rented the same place for over 20 years, (near the ocean, which she loves) with the rent constantly climbing during that time.

    I really hate how this government constantly pits people against each other, as if someone else is getting something because hard-working me is paying for it. We are a rich country although the desire for a badly-timed Surplus might just be enough to send the nation to the poor house. If they were half-decent economic managers they'd know that now is the time to stimulate the economy & put aside their wretched austerity while we're near the cliff of Recession or worse.
    seadog
    28th Oct 2019
    10:14am
    Every time this comes up it punishes those who have worked hard all their life to pay for their home. The BIG thing that is forgotten is that home owners have to pay insurance and rates as well as any maintenance that occurs. This is never taken into consideration. It is very easy for those who probably will never receive an Age Pension to take pot shots at those who may.
    Rae
    28th Oct 2019
    2:13pm
    And renters get rent assistance and can hold $210 000 more income producing assets. That just about makes both groups equal.

    This home in the asset test loses on many rational arguments including returns over time.
    inextratime
    28th Oct 2019
    3:23pm
    Every time the idea that only people who worked hard all their lives are the only one entitled to the 'massive' capital gains made on property over the life of ownership. Renters on the other hand fork out week after week and believe it or not the owner can offset a loss against tax. The renter on the other hand is subject to regular increases in rent and the possibility of a 90 date order to 'get out' . At the end of any tenure they own nothing and are at the behest of the next generous hard working owner to subsidise his next capital gain investment. We bought a house in 1992 for $338k. Then we separated in 1999 and sold but hardly made any CG. Interest rates were around 10.5% In 2017 the buyer of that house sold for 1.7million interest rates declining continually a CG of around 1.3 million. Did they work any harder than anyone else ? I don't think so. Just in the right place at the right time, bit like a lottery really. So don't give me "the worked hard all my life" syndrome and I'm not the only one left on the wrong side of a divorce and then spent 15 years paying child support of over $1800 a month.
    Arvo
    28th Oct 2019
    10:28am
    "The Henry Tax Review suggested exempting only the first $1.2 million. The bit above $1.2 million would be regarded as an asset and subject to the test"

    -This is fair-

    "

    "Under the Grattan Institute scheme's $500K threshold, $250,000 of the value of your home would be included in the pension asset test.
    Which means it would be valued at $104,039 more under the Grattan scheme, simply because you live in a more expensive city (on average)"

    -The Grattan scheme is UNFAIR-
    Anonymous
    28th Oct 2019
    10:37am
    $210'000 are already assessed right now. Just check asset test tables under "home owners" and "non-home owners". All they have to do is ramp the figure up to $400'000. Oops - I might have given them an idea.
    Anonymous
    28th Oct 2019
    8:15pm
    It is the same arrogant Ken Henry who could not understand in the Banking RC why it was not acceptable to rip off normal people and thus lost his job! Can't believe he has an iota of sense when it comes to what common people should or should not be allowed to have.
    Designated Driver
    28th Oct 2019
    10:32am
    This could result in part-pensioners whose home is worth considerably less, than the post code median, claiming that they are entitled to additional pension.
    zus
    28th Oct 2019
    10:35am
    What used to b a low economic area has turned into a popular area now. I think over$1.2M.
    leek
    28th Oct 2019
    1:48pm
    Yep you are right, bought our house for $235K in 2001, was really worth at least $270 or higher at the time but we got it cheap. We put about $100k into renovations, and turned the dump into a reasonable house. Sold it in may for $1,1280M All the land around where we lived is valued over $1m, no matter what your house is like.
    the houses are now too expensive for the next generation to buy.
    my husband and I split up(his choice), he struggled to get a new house with his share of the house money.
    CarolAT
    28th Oct 2019
    10:42am
    As you can’t ‘eat the house’, a consequence would be that even frail elderly would be forced to sell..or starve. Bought house 1950s 3br, outdoor loo in a working class less desirable part of town. Now due to proximity to the city, it’s *ripe* for development. So where are all these elderly going to move to that’s cheaper (my mother doesn’t drive)? And who is going to benefit by elderly being forced to sell?
    Anonymous
    28th Oct 2019
    10:49am
    Who is going to benefit? The Govt of course; the elderly have to fund their own retirement with the proceeds of the sold house.
    hyperbole
    28th Oct 2019
    11:38am
    so what is wrong with funding your own retirement.? when you get to a certain level you can c laim a part or full pension. that is fair
    Hasbeen
    28th Oct 2019
    12:19pm
    Renters never did a thing to help me when I was living on the smell of an oily rag to manage to pay the mortgage. No holidays, no nights out, no grog, mince & sausages every night. Why the hell should I have to go back to that so they can continue to spend.

    Their turn to do it a bit tougher than those who bought homes.

    28th Oct 2019
    10:46am
    Could help the next generation. People could sell their places at age say, 59, give away the proceeds to kids to get their mortgage off their backs. By the time the oldies get to pension age they will be able to collect the full pension. The kids are looked after and hopefully they look after the oldies with a few cash handouts for luxuries.
    People I know have already handed their luxury property over to the 2 sons, life time guarantee of tenancy and the sons pay all the bills like rates, power, insurances. They are quite happy with the arrangements. Should inheritance tax come in (likely) the kids are already the owners. No tax to be paid. I am sure there are legal people already working out solutions should the Govt include your family home. The smart people will avoid the pitfalls and the ordinary bloke loses the pension.
    Anonymous
    28th Oct 2019
    11:30am
    If the kids were smart they'd buy the house from the parents and have an asset... one day they can use it or cash it... haven't thought that all the way through but it seems to have something..
    hyperbole
    28th Oct 2019
    11:41am
    It makes me angry that wealthy people are rorting the pension system. Some apparently think that is fair, I do not. The pension is a safety net for those not as fortunate as others.
    Argus
    28th Oct 2019
    12:27pm
    hyperbole. Is it for those not as fortunate or those that have simply squandered their money or preferred to have their luxuries, holidays etc. Why should those who went without to purchase a house be disadvantaged. Obviously the idea is totally representative of our current culture of rewarding the bludger by penalizing the achiever.
    AutumnOz
    28th Oct 2019
    1:26pm
    hyperbole - you are wrong, most aged people who are now living in the suburbs bought their homes 30, 40 or even 50 years ago and these are the people who are most affected by the plan of making the family home an asset.
    These people are not wealthy nor are they rorting the system they are living in houses they probably cannot afford to repair or even paint, their money is used paying ever increasing council rates etc.
    Stop assuming everyone who owns a house is super rich, they are just ordinary people who are now being ripped off by everyone.
    Rae
    28th Oct 2019
    2:26pm
    I agree Angus and that goes for spending on private schools, regular car upgrades and living in areas you can't afford. Why should homeowners pay for it.

    Those suffering real adversity need assistance but it isn't the savers who should be robbed to provide it.
    Priscilla
    28th Oct 2019
    11:11am
    If retired/retiring politicians had the same pension restrictions as the rest of the population they would not considering going down this path. One rule for them and another for retirees.
    clarkey
    28th Oct 2019
    11:27am
    100% agree Priscilla. That would have to be retrospective for the ex politicians who are still living. Polis do not get a pension now, they have set up a super scheme that equals no other on the planet to ensure they are living the life of Riley until they die. Cut their perks though. That would save quite a few million per annum.
    Rae
    28th Oct 2019
    2:33pm
    They have Priscilla. Politicians will never get an aged pension unless all the markets collapse and their superannuation fund loses everything. Then if they have no assets, no super income stream and only their home they will receive the aged pension like everyone else in that situation.

    They now have the same accumulation scheme as anyone else.

    There is also no rule about saving and investing for income apart from paying the taxes due.
    Anonymous
    28th Oct 2019
    8:21pm
    That MUST be pushed for, Priscilla, as one of the key outcomes needed from this Review - Politicians MUST ONLY have the same rules as others. All their Special Defined Benefit Pensions (all current and past pre-2004 Politicians) must be scrapped, and they can apply under the same rules as anyone else.
    Rae
    29th Oct 2019
    6:39am
    George they can't do that as defined benefit super is not a pension. It's an income stream from saving and most of it, close to 50% is after tax non concessional savings that were fully taxed then contributed. The employer contribution is taxed when it is received unlike accumulation super where tax concessions occur at each stage.

    Defined benefit superannuation is less risky than accumulation super but it is very expensive to buy.

    Everyone could have put the same amount of savings after full tax into index funds and ended up with the same sort of income stream. Superannuation was compulsory but nobody was stopping others from delaying gratification to build retirement income.
    Anonymous
    29th Oct 2019
    11:49pm
    You are confusing the issue again, Rae, as you did earlier as well I remember. I was specifically talking about the pre-2004 Federal MPs who get this undeserved fat defined benefit pensions which should have been cancelled once the scheme was stopped for new MPs from 2004 (thanks to Mark Latham pushing that one). This had no contribution from the MPs, simply a perk paid by taxpayers. It was a serious failure of Howard's Govt not to cancel that perk which also benefitted the MPs changing the rules - corruption at the highest level. No problem to cancel it - just requires guts, but MPs won't do it until pushed as they don't want to hurt their senior mates.
    Rae
    30th Oct 2019
    5:50am
    Okay George. I was confused with public servants defined benefit super which did cost a lot of post tax contributions and received no tax concessions even on the employers contribution which is taxed as it is received.

    I wasn't aware politicians received superannuation they had not contributed to.
    Anonymous
    30th Oct 2019
    3:14pm
    Thanks, Rae. Priscilla's main point was that Politicians have different rules to others, and that is blatantly unjust as they manipulated the system to get these benefits for themselves while screwing everyone else. I also believe that taxpayer funded age pension benefits for Politicians or anyone else (judges, public servants for whom this applies) should be all on the same rules.

    Just to recall my past clarifications re: pre-2004 Politicians for those who may be confused:

    For MPs first elected before 2004, the Defined Benefits Pension ranges from 50-75% of Base Salary, currently $211,250, based on completing 8-18 years respectively of service. That is for life. It is the minimum and could be more depending on the positions they held. There are NO Asset, Income, or Couple Combined tests, and are paid out from Age 55 (increasing to 60). People such as Philip Ruddock and Bronnie Bishop get around $250K per annum in spite of whatever massive assets they have and are also not affected by their additional incomes through many other current roles (Ruddock is Mayor of Hornsby, and State Liberal party Director, besides other stints). Abbott gets over $300K. Julie Bishop (getting over $200K) recently announced 2 high-paying new jobs in addition! All leeches!!! The link below spells out the complex rules fairly clearly.
    https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/1011/SuperannuationBenefits

    These Defined Benefit Pensions are the BEST Magic Puddings anyone could wish for. They should have been Cancelled from 2004 (when new rules started) as their re-elections should have been considered NEW Contracts. Wish some Legal Eagle could have taken this up and challenged the continuation of their benefits on re-elections - being NEW contracts.
    As that did not happen, it is therefore time now, with this Retirement Incomes Review, to bring this up again and push for these taxpayer-funded exorbitant benefits to be immediately cancelled.
    clarkey
    28th Oct 2019
    11:22am
    "It would happen postcode by postcode, updated every year using council valuations and as the median prices changed".
    Well the council valuation for my property is just plain wrong. I pay more rates for a home and 5 acre block in rural NSW than my neighbour who has a bigger house and 10 acres. When I confronted the local council on this, I was told my rates were set on the cost of the home and land when I bought it. This is ludicrous as, in my opinion I over paid $25k as the property is exactly what I wanted to retire to, I was told I could complain or lodge a protest with the lands council but the hoops were just too many and too great to overcome. Again we have people who are supposed to be fair but have absolutely no idea what each individuals position is, there is no way a fair system could be introduced for anyone. Get the Gina's, Twiggy's, Murdoch's et al to start paying what they should be paying and there would be no need to keep hitting welfare or the PENSIONERS or Medicare etc. Stop giving non productive tax breaks to companies, make them all pay what is just and right.
    Farside
    28th Oct 2019
    6:10pm
    Your local council would only use the purchase price if your home has not had a council valuation. Your council can inform you when the next valuation is due.

    28th Oct 2019
    11:28am
    ..and who exactly the hell is 'the actuaries institute'? .. and who exactly gives one damn what they say?
    leek
    28th Oct 2019
    1:36pm
    The actuaries are statitcians. I worked in the travel arm of a genural Insurance company. the actuarie uses all of the data and the data of claims and costs etc. to help my company decide what Insurance premium to charge every year.
    It is quite a science. They are quite clever people but only in regards to the numbers!
    Anonymous
    28th Oct 2019
    8:23pm
    Some overpaid, head-in-the-sand geeks who have no clue of how "Policies" need to be designed in the real world for real people who have to work hard for lesser incomes. Thankfully, Frydenberg already ruled out this bullshit.
    MarkAdel
    29th Oct 2019
    12:37am
    I worked in the Department of the Public Actuary in the SA Government for 15 years.
    The actuaries I worked with were the smartest people I have ever met.
    Their main role was valuing the State superannuation schemes.
    The Department head actuary was asked to resign by the Premier of the day when he didn’t agree with him. He did not want to go against the ethics of his profession.
    I still remember him saying “you can work for a boss or with a boss”. He was a down to earth, generous, friendly and an extremely smart and good bloke.
    GeorgeM, how many have you met?
    Farside
    29th Oct 2019
    7:01pm
    well said Mark, non-actuaries bet against actuaries at their own risk and suffice to say they rarely win.
    Anonymous
    29th Oct 2019
    11:59pm
    Mark, I have come across a few and am well aware how they work. I am not questioning their intelligence or ability with numbers, in case your ego got hurt! The fact is they are so engrossed in their numbers (as also are many highly trained professionals in their respective fields - I have managed several), that they do not have the breadth of thinking and balanced perspectives to make good policies or practical decisions - a good example being the article above which is a stupid idea which would further complicate an already messy Centrelink system, with no assurance of accuracy, and would create further extreme discontent for retirees who saved for their homes.
    NeDaPa
    28th Oct 2019
    11:29am
    The debate/discussion/scare-tactic to include or not to include a retiree’s home in the asset test is tiresome.
    The Your Life Choices idea of using averaged postcodes for capital cities is flawed and stupid and would force retirees to sell up, blow the cash, the fall 100% back on the income supplement plus rent assistance.
    The “system” should reward retiree home owners for working hard, paying their taxes and paying off their mortgages during their working life. Those retirees who don’t bother to achieve home ownership and blow their income during their working life, should not receive monetary payments in retirement, other than the basic income supplement.

    28th Oct 2019
    11:32am
    Once again - the family home is a paid for out of post-income tax cash, and therefore should not be in any way subjected to secondary tax via inclusion in any way in the assets test, and should not be subjected to tertiary tax by pension reduction in the event of it being sold.

    Pure thievery.
    hyperbole
    28th Oct 2019
    11:43am
    my assets are out of post income tax as well but do not include a home and are therefore assessed.
    Anonymous
    28th Oct 2019
    12:17pm
    I long ago included all paid for out of post genuine income tax assets in 'not to be included'.

    Double taxation. Jeez - the rort was in like Flynn when someone made up the fairy tale that taxing dividend imputation was 'double taxation' when it is nothing of the sort since the imputed component is nothing more than withheld tax and can be refunded in full or part depending on taxable income - but when it comes to pensioners... don't you dare have anything for a little comfort or luxury, especially if you bought it out of honest earned money.... meanwhile Joe Fatt can continue to fly the company jet without it being part of his taxable income...

    Amazing... simply amazing... rules set up in the Industrial Revolution to benefit business and the rich have no place in a modern society.
    Rae
    28th Oct 2019
    2:42pm
    Well hyperbole if that $210 000 extra you can have as a non home owner isn't making the rent when you add holding costs to the sum then you need a better advisor.

    I average around 9% return and my costs are around $8000 including maintenance so you should have between $25 000 and $28 000 to make rent plus the rental assistance you get which is a real bonus.
    hyperbole
    29th Oct 2019
    1:56pm
    You are assuming my situation quite wrongly. I do not get any government assistance whatsoever.
    Rae
    30th Oct 2019
    5:57am
    Not you personally hyperbole but the aged care pensioner does get rent assistance.

    Rent was much cheaper than buying during the years aged pensioners were paying off the mortgage. It would have been wise for those who chose to rent to save the extra.

    Then there are the bottom 30% of income earners and public housing was a very good idea. I have no idea why Government stopped providing it. Those poor souls really do it tough and it's appalling what is happening to make life very difficult.

    I don't get government assistance either. We are very lucky for that and I'm grateful I've had good health and was able to work and save.
    Jim
    28th Oct 2019
    11:33am
    What exactly is the agenda here, I think everyone agrees that homes depending on where they are have risen in value, some have mentioned that you can’t eat your house which is true, you can’t earn an income from your house unless you rent part of it out then you are liable for tax and maybe a reduction in pension, I couldn’t downsize because my home is small by today’s standards, I haven’t heard a single politician from either side of politics that supports this idea, in fact quite the opposite, so who’s agenda is it to keep raising it, I suspect envy from some quarters and it’s not necessarily from pensioners.
    Jen50
    28th Oct 2019
    11:46am
    No, no and no! I live in 3144 where broken down old weatherboards are sold for over 2 million & pulled down to build mansions or town houses to make developers rich. Our house is a former weatherboard that we renovated (but never finished) in 1976-77. It is falling down around our ears again. My husband bought it for $10,000 in 1969. He was self employed, low income & doesn't have super. I only had 10 years of super. We have a moderate amount of savings much of which will be needed to do house repairs & maintenance. We rely heavily on the age pension. We live close to trains, trams, shops, doctor, dentist & friends and have good neighbours, all of which will be important as we age. Including the family home in the assets test or selling & moving would seriously affect the quality of our simple, frugal way of life.
    Anonymous
    28th Oct 2019
    11:54am
    Know what you are saying, Jen50. Lived in 3053 but moved interstate long ago. If still there I would definitely be affected as the house (block 20 ft by 100 ft) was sold last year for $1.16 million. Close to hospital and all services - should have stayed there, eh??
    sunnyOz
    28th Oct 2019
    12:15pm
    Totally agree with you Jen. Been in similar situation. I have always been single, always had a job since 16 - mostly low paying jobs. But I worked hard and in mid 40's, bought an absolute dump of a place in a run down area 41kms from main city. I'm now on pension, but over the years, I have worked hard to make my small 2BR house my home. I went without holidays, often worked 3 jobs, and have just updated my 21yo car.
    Nothing elaborate or palatial, but suits me. 25 years later - the area I live in has gone from a dump to desirable. My house would be the smallest block and house in the street - yet 'by postcode' I would be penalised. My council charges the highest rates in the state, I still have house maintenance and upkeep, and I would love to know just who it is that decides what house is 'atypical' of an area.
    Seems to be the sole aim is to punish those who work hard and put a roof over their heads. I remember when I bought my current house, my parents were aghast and sure I was making a huge mistake. Even the bank had reservations, hefty deposit helped. In the midst of mainly farming area. Now - farms gone, packed with huge modern houses. I originally purchased in this area to be close to amenities (transport, hospital, medical, shopping) and strongly object to any suggestions to move to cheaper area. And who knows? - in 20 years time, THAT cheap area might become the new top spot.
    Farside
    28th Oct 2019
    6:16pm
    sitting on an asset valued at $2m or more and rely on the age pension handout ... welcome to life in the crosshairs. Your circumstances are exactly the reason why inclusion of the home in the assets test is being considered.
    Jen50
    28th Oct 2019
    8:09pm
    Farside, I take offence at that. The Government considered us to be a low income family which I found somewhat embarrassing, but I was always assured that we were entitled to child endowment. On the other hand, the Age Pension was believed by most people from my era to be an absolute right, not a hand out. As a female, I didn’t get superannuation in the 1960’s & 70’s and our wages were far below that of men. We worked hard to pay for the house, raise 3 children and keep our heads above water but we managed and had everything we needed. We certainly didn’t live in luxury though. I am from a generation that stayed home to look after the children but also worked in my husband’s home based business and did all the bookkeeping. I did a lot of volunteer work at our children’s schools. When there wasn’t enough work to keep us going & my youngest had almost finished high school, I did a computer course, brushed up my office skills & went back to work outside the home until I retired. It is unfair to expect people to give up what they worked hard for to make sure that they will be secure in their old age with what was the norm and what was available to them in their lifetime. Things have changed and new generations can plan ahead accordingly, but it’s too late for many of us to change plans now and it’s not fair to expect us to. There is a human aspect to all this and that must be taken into consideration.
    Farside
    29th Oct 2019
    2:09am
    you may take offence Jen but the end result, no matter your life journey, is your circumstances are those of asset rich, income poor and taking an age pension. Just saying this is not the profile/demographic that governments are going to be sympathetic while trying to contain welfare and social security spending and there are retirees with modest levels of assessable assets being denied the age pension.
    Rae
    30th Oct 2019
    6:04am
    You have to wonder why though Farside. This Government is huge. Has created new departments and has spent close to $1 trillion dollars with not much to show for it. The mining sector is booming and so is the financial sector and property. There should not be a problem at all providing welfare for retirees as has been done in times far less prosperous than the current period. If it is just Government ideology then it needs to be fought.

    Government is receiving 5% more tax than at the end of the Gillard/Rudd years.

    The correction in house prices needs to happen sooner rather than later and perhaps after the boom busts some sanity might emerge.
    Farside
    30th Oct 2019
    1:09pm
    All good questions Rae. Government spending priorities and reliance upon expedient rather than strategic decision making continue to provide a never ending source of puzzlement.
    Gammer
    28th Oct 2019
    11:50am
    As someone who struggled throughout her working life to pay her mortgage off prior to retirement (with interest rates that sky rocketed to 19% at one point) I feel it would be unfair to penalise us by including the home as an asset (assuming it has a modest value and is not a fancy mansion). We have all the ongoing maintenance costs, rates, insurances, etc to cover too and that should not be overlooked!

    28th Oct 2019
    12:11pm
    Postcode by postcode - divide and conquer - start with the blatant cheats, use greenest envy etc, then slowly but surely move it on to everyone except, of course the 'best classes'...

    This is like the terrific moment for Afghan national recovery, when a local tribe dobbed in some Talibans - and when asked about it, the chief said:- "No, no - we're all Taliban here - but those guys are too extreme and radical for us."

    So we'll all sit back and watch as the government smokes out the fat cats with the mega million houses - and while we're doing that they'll sneak up on us all...

    That's why we're called the Civilised Tribes ... easy to sneak up on...
    Anonymous
    28th Oct 2019
    1:03pm
    Yes it's stupid as homes my side of the road are in a lot more expensive postcode than those on the other ide of the road.
    Anonymous
    28th Oct 2019
    7:45pm
    Yes, crazy, BB...
    Rae
    29th Oct 2019
    6:52am
    TREBOR i'm surprised actuaries even came up with this idea. If you subtract the costs of buying and holding the house from the average price of rents , which is around 2% yield and won't rise because wages are stagnating, then there isn't much difference between the home owner and the renter once you factor in the $210 000 extra allowance and rent assistance.

    It's a nonsense.

    If those who can't afford it insist on living in wealthy areas through renting then it isn't anyone else problem.

    And if people insist on term deposits because of some mistaken ideas about risk then again that isn't anyone else's problem either.
    Farside
    29th Oct 2019
    7:03pm
    dropping truth bombs Rae?
    Brissiegirl
    28th Oct 2019
    12:19pm
    Any government, or wannabe government that seriously supports this idea won't be in government. You don't help the poor by tearing down the rich. Aspirational home ownership, working hard to better oneself and one's family, will no longer be part of Australian culture.
    Anonymous
    28th Oct 2019
    12:36pm
    Just watch out for the pendulum to swing when we have more renters than owners - that is when the Govt really can punish property owners like it happened overseas. Australia is a place where people used to aspire to home ownership - the young are no longer built that way.
    Anonymous
    28th Oct 2019
    7:47pm
    My kids will inherit well so they're not that worried... but I do wish they would get their own homes... been pushing them for years down that path... no response... even offered a deal with dad and a contracted thing so that all could contribute a little while benefiting .... unfortunately they have their mother's money vision... not their dad's....
    hyperbole
    29th Oct 2019
    1:59pm
    And that is why there is no interest in providing for themselves. Kids know they will inherit.
    sunnyOz
    3rd Nov 2019
    2:04pm
    hyperbole - with you there! Many young ones today sit back and laugh - why should they worry about saving and buying a house when they are going to inherit? Only recently I was at an afternoon B-B-Q at a girlfriend's place. She was a single mum to just her son - remains solo, never married. Her son is always going overseas, buying new cars, flitting from one expensive rental place to another. He and his wife both have good paying jobs but have really nothing to show for it, and they have chosen not to have kids.
    One couple was actually talking about home ownership, investment properties, etc. Son pipes up and said that he didn't need to save for a house because he would get his mum's anyway. He actually joked about how stupid it was for him to waste his money saving for a place now.
    I just hope my friend lives to age 120, and spends every cent before she goes! The absolute one thing that really makes my blood boil is hearing seniors saying they have to "leave something for the kids." Bugger the kids!

    28th Oct 2019
    1:01pm
    Terrible idea as why should pensioners who move out of the cities be penalised for doing so. Move out of the city and lose your pension.
    Baby Huey
    28th Oct 2019
    1:01pm
    I agree with Brissiegirl. Any incumbent government or try-on political party who thinks they have the gender neutral balls to will find themselves being de-balled and sent to the knackery to be ground up into fertiliser for the swamp. All governments, politicians, and their public servants are corrupt only some are more than others.
    AutumnOz
    28th Oct 2019
    1:02pm
    If this plan goes ahead home owners all around Australia will start a revolution, at least those who are physically able to will do so. They will probably be joined by any citizens over 45 years old who are currently paying a mortgage.
    How dare this stupid government assess the family home which has taken years, or decades, to pay for with money earned which was heavily taxed before paying the mortgage.
    I am heartily sick of all these current idiots in the federal government who have no idea how to govern the country or to pay their commitment to look after the Australian people and pensioners. All they do is keep threatening aged an unemployed or under employed people with cutting off their income without just cause.

    28th Oct 2019
    1:05pm
    For heavens sake just give the pension to anyone who wants it and they pay it all back from their estate when their expensive home is sold.
    Anonymous
    28th Oct 2019
    4:29pm
    VCBB - and at the end of the day they sell it before they go. The kids will be grateful. In my home country they have already seen that one occurring and ask the kids for the money back - we are a bit behind here.
    Anonymous
    28th Oct 2019
    4:46pm
    Good luck if you can actually die penniless but that's not very easy to do.
    hyperbole
    29th Oct 2019
    2:01pm
    Totally agree! Pensions for all but of course those hoping to inherti million dollar mansions would not like that at all.
    Old Fella
    28th Oct 2019
    1:12pm
    Another ridiculous Government thought bubble! Question? Assume my home has a market value currently of $1.6 M (2019) and in 2 years' time (2021) there is an economic downturn or housing bubble burst and my property market value drops to $ 1.3M. In 2019, I was forced to reverse mortgage part value of $200,000 in my home equity to meet the criteria for an old-age pension after Asset testing, I had to utilize fully the $200000 which includes the reverse mortgage interest due to payments plus my living costs. My question is once the value of the reverse mortgage is expended and I apply for a full pension I will still owe interest on the reverse mortgage; will I then be able to claim this cost as rent and seek rental assistance as part of the pension despite still living in my part owned home?
    Brissiegirl
    28th Oct 2019
    1:24pm
    It's a ridiculous idea. It would be impossible, using all the actuaries in this country, all the do-gooder government economists, using every abacus ever invented, to compare post-code values. What about two houses in the same street: one has a valuable view, the other has no view. Same postcode, same street. Someone grows big trees in front of the house with the view de-valuing the house then what? For God's sake this is utter madness promoted by green-eyed monsters and lovey leaners who have no idea what it means to work one's guts out to make a life.
    Aviatorman
    28th Oct 2019
    2:15pm
    Great summary 'Brissiegirl'. if this idea were to come in I think I would lie down in the middle of Pitt St., and hold up the traffic. Care to join me.? Seems its the modern way to protest. Oh, I suppose I could talk to Pauline. She has her head screwed on properly.!!
    Of the 10,000 pensioners "affected" by the proposal, how many have the pension reduced versus those who would forced (even if your in your 80's or 90's) to sell and move across to the Black Stump.
    Anonymous
    28th Oct 2019
    11:56pm
    Bring the superglue...... make 'em work to get you off the street (no pun intended) .... jeez - the bastards are trying to get you ON the street....
    Hoohoo
    31st Oct 2019
    5:49pm
    Well, Aviator, you could talk to Pauline but don't expect an intelligible reply. She has her head screwed but I'm doubtful about it being on properly. I haven't heard her utter a single proper sentence for a very long time.

    She means well, but she's mean as well.
    Old Fella
    28th Oct 2019
    1:12pm
    Another ridiculous Government thought bubble! Question? Assume my home has a market value currently of $1.6 M (2019) and in 2 years' time (2021) there is an economic downturn or housing bubble burst and my property market value drops to $ 1.3M. In 2019, I was forced to reverse mortgage part value of $200,000 in my home equity to meet the criteria for an old-age pension after Asset testing, I had to utilize fully the $200000 which includes the reverse mortgage interest due to payments plus my living costs. My question is once the value of the reverse mortgage is expended and I apply for a full pension I will still owe interest on the reverse mortgage; will I then be able to claim this cost as rent and seek rental assistance as part of the pension despite still living in my part owned home?
    Chris B T
    28th Oct 2019
    1:30pm
    Very odd thing to do, just because values has Risen over the Years.
    All costs associated with these homes have Risen too.
    Post Code areas have extremes as well.
    1.2 million could be a shack and the other end of town a "Mac Mansion"
    The young ones can't afford a 3% home loan. Try and make Real Comparisons of Differing Eras of Home affordability.
    Disposable Income to each Generation as well.
    I don't Remember much more than a Milk Bar, Fish and Chip, Chinese Restaurant,RSL Clubs.
    MacDonalds and Pizza were new back then.
    Certainly not the Proliferation of Coffee Shops and Restaurants Now.
    They only survive by Patronage.
    Rae
    29th Oct 2019
    6:59am
    Yes. Young ones with decent jobs can still buy homes. The problem of bosses abusing workers is not retirees problem. Those young workers are quite capable of organising unions if they could be bother.

    Many would rather rent in very desirable post codes and then whinge about how unfair it all is.
    Alexii
    28th Oct 2019
    2:03pm
    The aim of "the game" is to reduce the payout of pensions to people. I'm sick of their attacks upon people on pensions and part pensions.
    floss
    28th Oct 2019
    2:07pm
    Slow Mo. is again attacking people on a pension thank god we are not on one. It is hard to figure why a pensioner would ever vote for the Libs.
    Anonymous
    28th Oct 2019
    5:03pm
    They are all in it floss! Never mind what you vote for, we are takers now and they do not like us as much as when we were tax payers. If you have absolutely zilch then vote Labor - you cannot lose anything because there is nothing to take.
    Hoohoo
    31st Oct 2019
    5:52pm
    The Libs are much worse than Labor when it comes to screwing the little people. They are both shit but the Libs are the shittiest.
    day dreamer
    3rd Nov 2019
    8:48am
    even though I don't understand much about politics, I feel that labour would be worse in treating people who worked and saved. A very resent example is on their franking dividend police that they tried to double tax income. I feel labour is only looking after those who don't pay enough tax but relying on the tax to get a benefit.
    Rae
    28th Oct 2019
    2:10pm
    Non home owners are allowed around $210 000 more in income producing assets. That should easily return around $12 000 to $14 000. Add the costs of insurance, rates, water, strata, maintenance that the home owner pays and you have equality.

    A renter has equal opportunity to rent for around the same as a home owner spends in other words.

    I'm surprised actuaries couldn't work that one out.
    Anonymous
    28th Oct 2019
    4:38pm
    They have Rae - but you cannot get blood out of a stone. If you have spent everything you are free of government problems and you get the full pension. I often look at my humble place. $5250 a year in body corp and rates with pension discount. Asset punished by $210'000. And the place only worth at the most $400'000. They are building places "for rent only" here around me but it starts at $500 a week - with rent assistance it would go to $435. Still a bit high, but worth thinking about>
    Anonymous
    29th Oct 2019
    12:03am
    Hmm - water and council rates $3000, maintenance - well - it's good I'm handy ... improvements ongoing .... worth around $500k now... and going up with every improvement... discounts on power and rates and such.... wait until I get the storage batteries, the solar hot water and the backyard water tanks in ....

    Not a bad deal to retain capital... I'm the carer here for the ex... she's not feeling well or hopeful... and she wants to pass it on to her kids and grand-kids - as is her right. She's worked for it ...

    Buggar - I'd be off fighting fires, but had to give up on the RFS due to carer duties and only one car... (jeez - one car burnt out on the main road today - falling flaming branch hit it - nobody hurt - but stay home unless necessary) ..oh, well... I'm good at fire-fighting... had a farm myself etc.. and me old man was #5 in the fire brigade. It sort of rubs off ...
    Rae
    29th Oct 2019
    7:03am
    Stay safe TREBOR it's going to be a terrible season.
    Sinic
    28th Oct 2019
    2:40pm
    Stop moving the goal posts.
    Farside
    28th Oct 2019
    6:24pm
    Depending how the goal posts are placed you could end up with improved circumstances. It puzzles me how people can react without being informed of the proposed details to understand the totality of any reforms.
    Sinic
    28th Oct 2019
    9:49pm
    Just using the above calculator and I’ll be worse off. Oh what a surprise.
    And that’s after losing out after the 2017 changes to the Pensioner Assets Test.
    At least I’m contributing to the budget emergency.
    Anonymous
    29th Oct 2019
    12:05am
    Well - if they keep studying the Murray/Darling system long enough - they'll be able to run desert races in the sand.... nothing like tossing an issue around and around.....

    I say scrap the idea entirely - not manageable... and besides - I oppose it with might and main and will march on Canberra if it comes into play.... I keep my word.....
    Rae
    29th Oct 2019
    7:06am
    Yes TREBOR you'd have to go back and work out the real cost of the house, less depreciation etc. Judging anything on the crazy prices caused by the Central Banks throwing worthless money at people is a nonsense.

    This market could very well correct by over 60% what then?

    The current boom in asset prices is a historical aberration and won't last.
    Rusty
    28th Oct 2019
    2:52pm
    Another shot at home owners from a govt that wants to be in on the opposition benches.
    Anonymous
    29th Oct 2019
    12:07am
    All politicians should be on the back benches until called by the people to a minister spot... not the party - the people... that'll make 'em work hard for the people....
    Arvo
    29th Oct 2019
    12:14am
    It's a representative democracy that we have, old chap, not a direct democracy. Want a direct democracy? Only one country in the world that i am aware has one, Switzerland.
    Willfish
    28th Oct 2019
    2:59pm
    I get sick of hearing about financially well off Australians squealing about money - particularly when they have plenty of assets and still want to drink at the public trough. Enough!!. If you own a home, or any other valuable asset, at least part of it should be included in the means test for an age pension. Why should you collect a pension at public expense, let the public purse finance you in your retirement while you sit on rich assets, then sell your assets when you die and give the money to your children. We all pay for this ridiculous system with our high taxes. Less welfare will mean less taxation, then we will all be better off.
    Anonymous
    28th Oct 2019
    4:42pm
    Because most of the people you are talking about are people who put in all their lives and you want all the lazy ones elevated to the same standard of living like the ones who have contributed. If you get sick of that then suck it up.
    Brissiegirl
    29th Oct 2019
    12:00am
    The green-eyed monster is always there most often in the guise of socialism rearing its ugly head. Home owners pay tax after tax after tax, just to provide a roof over their heads in retirement. Some people will always have more, some will have less, but those who sacrifice many things along the way are doing the wider community a favour by not burdening a government with a request for social housing.
    And if people choose to leave their assets to their children, so what? It's their hard earned assets and they can do what they damned-well want with their own funds.
    Many older people earn the security of keeping the family home, often for the security of kids who in these times can find themselves kicked out of their own family home with nowhere to go.
    Typically, men, tossed out of their own homes, leaving a wife and kids in occupation. I'll bet there's thousands of home-owner parents so grateful they have somewhere for their ejected kids to sleep and get some respite from the stinking mess they find themselves in when the missus keeps everything except the clothes of their ex's back.
    The family home has to remain untouchable and there's no future for any politician who doesn't get it.
    Arvo
    29th Oct 2019
    12:11am
    "Less welfare will mean less taxation, then we will all be better off"
    I don't think so.
    " all better off" is not in the government's job description.
    Anonymous
    29th Oct 2019
    12:12am
    So true, Brissie - you pay your income tax, you pay your mortgage out of what's left, when you buy anything for the home or have anything done, you pay tax.... now they want to tax it again....

    Tell 'em to go to buggery......

    Now - as for the Murray River .... the farmers there need to do a Milagro Beanfield War - the story went that a Mexican-American living in Arizona (I think) had a family plot in the family for generations with water running right by it - a new 'water scheme' came in and only those with a licence could use the water... one day he said "sit on it!", and turned on the taps to his fields and planted beans.... started a people's war ... Murray farmers missing out should just open the fence and let their dairy cows drink - are they going to arrest the cows? Arrest the farmers? Good luck with that..... we need a good trigger for an uprising of popular discontent...

    Welcome to around the world with Trebor...
    Billv
    5th Nov 2019
    1:01pm
    My home doesn't generate income or put food on the table and pay for all the other liabilities in owning a home, So, how does reducing my pension help me?
    Will people like you bring food for me to consume and your mates I assume will be coming over to do the repairs or maintenance that will be required?
    And for me to travel with my vehicle you will supply the fuel and running & maintenance costs

    So how does that work again?

    If they bring this ridicules idea to life I for one will sell my home do a trip or two that I have never been able to do whilst working and when the funds run out become a renter with a full pension. Yep I'll vote for that. Sometimes I just don\t understand Government humour!
    cupoftea
    28th Oct 2019
    3:27pm
    Another week and something different the government throws out so the minions can think they are running the country I must be one of the 49% that didn't put them in nothing surprises me you that put them in cop it you got 2.5yrs of worst to come oh that is that they cant change from 3yrs to 4yrs in parliament which they are trying to do now
    Arvo
    29th Oct 2019
    12:02am
    That was the miracle that ScoMo prayed for. Me thinks that he knows that god is a hard nosed capitalist also.
    Rosscoe
    28th Oct 2019
    4:10pm
    Something has to be done to stop the rorts in our society. I've paid off a mortgage in my lifetime. Now I reside in a retirement village where I am being ripped by the operator. Our capitalist society has wrecked too many lives.
    Anonymous
    29th Oct 2019
    12:14am
    So true... greed is not good...
    Rosscoe
    28th Oct 2019
    4:10pm
    Something has to be done to stop the rorts in our society. I've paid off a mortgage in my lifetime. Now I reside in a retirement village where I am being ripped by the operator. Our capitalist society has wrecked too many lives.
    GrayComputing
    28th Oct 2019
    4:37pm
    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Now is the season for discontent, so do something about it!
    It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

    It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even the UK and poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.
    Anonymous
    28th Oct 2019
    4:47pm
    Yes GC - a lot of what you say is true but look at the whole picture. NZ has a GST of 15% and no Meg Lees discount for food etc. Looked at the possibility of living there as well as here and I am better off here. If you are a rich person (million+) maybe it is better there but Mr and Mrs Average is doing OK here.
    However - I agree with the universal pension as well as it being taxed with your other income.
    Anonymous
    28th Oct 2019
    4:58pm
    Everything is at least 30% more expensive in NZ even with a few more NZ dollars on exchange rate conversion.
    Anonymous
    28th Oct 2019
    5:05pm
    VCBB - good to see you have done your sums as well. Thanks!
    Farside
    28th Oct 2019
    6:27pm
    ditto, my mother has an empty house in NZ that I could easily move into but the numbers just don't work.
    thommo
    29th Oct 2019
    8:02am
    Agree with you GC...If only we could establish a political party for retirees and pensioners..
    The first thing to do is get rid of this LNP govt, then legislate for equitable fairness.
    SuziJ
    28th Oct 2019
    4:45pm
    It won't affect me :)
    Anonymous
    28th Oct 2019
    4:53pm
    And it does not affect half of the people on this forum either, SusiJ. You have to possess something you accumulated to worry about Govts taking it away from you. Hand to mouth existence has never worried anyone when it comes to pension age.
    Sinic
    28th Oct 2019
    5:44pm
    It doesn’t affect me, doesn’t make it right.
    Just as the “It doesn’t affect me” 2017 changes to the Pensioner Assets Test make it right.
    Mrs Hedgehog
    28th Oct 2019
    6:01pm
    I have already been taxed twice on my tiny house, once through income tax and again with stamp duty when I bought it. If I had rented I could have had a luxury round the world trip on the money the government has already taken because I chose to buy a house. I still have insurance, maintenance and repairs and rates to pay. Perhaps we should all sell up, swan around overseas for a time, come back, buy a luxury car and claim the full pension and rent assistance.
    Arvo
    28th Oct 2019
    11:58pm
    Income tax goes to the Treasury of the Commonwealth government and home purchase stamp duty tax goes to the Treasury of State governments and...GST although it initially goes to Canberra is distributed back to the states in various proportions...after Canberra gets its % cut.
    Did I mention that local councils get their grubby fat fingers into your wallet, big time, as well when you apply for a DA ?
    Jtee
    28th Oct 2019
    8:32pm
    It is a "crap" idea penalising those who have worked long and hard, gone without for years and years (missing out on holidays, time at home with family, new cars, etc., ) in order to pay off their home. In all of those years (usually a timeframe of 30 years) the home may have inadvertently become more valuable due to demands from population explosion with an influx of people escaping from cities where properties are more expensive.

    Australia would be better off with a Universal Pension where personal efforts and savings are encouraged. The Tax system should be amended to minimise legal tax avoidance instead,
    Karl Marx
    28th Oct 2019
    9:34pm
    lol, preposterous & dumb suggestion that shouldn't even make the table. Why on earth should any home owner lose part or all their pension to subsidise those that rent.
    I feel sorry for those that are renting as sometimes it's through no fault of their own are doing it tough. The only solution is more public housing built by the governments & run only by the governments.
    Arvo
    28th Oct 2019
    11:46pm
    Because, the Grattan Institute nobs that live out of the government's back pocket
    ( worker's income tax) think it should. They work with the government, not against it, otherwise they wouldn't have the government commission them to work for them, so they feed the government the crap that the government wants to hear.
    Aussie
    28th Oct 2019
    11:26pm
    What about those who are still paying off the mortgage on their home I still have over 250,000 to go so would have to sell the home just to rent for the rest of my life and end up paying an ever increasing rent to an investor and when the investor wants to sell I will have to move to where?
    Arvo
    28th Oct 2019
    11:37pm
    What about it? They don't reduce your Deemed Income Assessment just because you have credit card debt or personal loan. In fact, if you get a personal cash loan , say over $2,000 deposited by the financier into your bank account they count the total value of that and any savings you may have for the purpose of Deemed Income Test. So why would they take into account your mortgage loan?
    Anonymous
    29th Oct 2019
    12:18am
    They don't, Arvo, which is precisely the point - your net equity is not the value of the home.... so why should you lose against the value of the home? Just another pitfall in this silly idea with so many things incalculable or left out of consideration..
    Arvo
    31st Oct 2019
    2:21am
    Aussie- The thought of moving from a state capital city to a place where it's affordable to rent can be very frightening for some but, if people do research on Internet, they can find regional cities that have a strong infrastructure, reasonable home unit rent, strong health care industry, reasonable public transport, all the major supermarket stores, medium size shopping centres, entertainment etc, etc.

    In order to achieve such a necessity, unfortunately there need to some sacrifices, such as being a far distance away from adult sons, daughters, grandchildren and old friends who may or may not go to the trouble of visiting you once in a while.

    The wonders of social media communication, Facebook,Skype, e-mail can keep you in touch with family and friends on regular basis, easing the pain. If you are moderately sociable you will make new friends and acquaintances soon enough. You will get used to it and you can live an affordable life. You just need to do the research for places that meet your affordability.
    Linda
    29th Oct 2019
    10:29am
    For some, a home is a mere property investment, for others is represents shelter, a safe haven and often is set up by the owners to be able to meet their needs long term. They have built up neighborhood friends over years and often understand and know their neighbors. Yes, we did struggle to make our 17 percent interest payments in the 80's, and we have had to put funds into maintenance over the years. We have had to pay the rates which continue to rise too. So calling a shelter an asset may be ok for some, especially the cashed up, but for others, it is a safe haven in a changing world and being able to stay in our own homes is of primary consideration. Sometimes values go up through no plan or thought from those who purchased the property years ago. It seems grossly unfair to an individual who stayed in their home for 30 plus years, and now that suddenly the values are up, they may be forced to sell in order to eat. It is grossly unfair to those people. Name a city, and there will be many homes where the values increased but the incomes did not. This idea of counting the home value in an asset test sucks.
    Macheke
    29th Oct 2019
    10:44am
    The idea of using the post code and the median price for houses in that area is a clever idea but it depends on your definition of fairness. Why should a couple living in high priced area have the same pension as someone living in low priced areas if the rest of their assets are equal? They have benefited more from capital gain relief too. The issue to be addressed is when the assets outside the home are insufficient to live on. People should not be forced to sell their homes but their are a number of ways to access the equity in the home - the pension loan scheme and home loan and home equity release products. I would add one more. A couple with a valuable home but insufficient other assets should be able to "buy" the portion of the age pension "lost" due to the inclusion of the family home and the government gets paid only when the home is sold, and another home not purchased, ie usually on death.
    hyperbole
    29th Oct 2019
    2:19pm
    agree!!
    Rae
    29th Oct 2019
    5:18pm
    What about those high income earners who chose to rent in desirable but expensive areas and spend up on lifestyle. Do we make them borrow as well? How does fairness come into play for all those people.

    Under your plan I suspect nobody would bother to buy a home and we'd all be landlords or rent from foreign landlords like other countries do.
    Macheke
    30th Oct 2019
    11:49am
    Rae. There are still many reasons to own a home. It has been a very good investment for many and I am not suggesting it loses it status of being capital gains free (unless you could claim mortgage interest). Also it gives you security against having to move when you don’t want to. The choice of whether or not to buy or rent should not be determined by age pension entitlements. I think that’s fair.
    Rae
    30th Oct 2019
    2:32pm
    Fair would be paying everyone the same in retirement and taxing any other income according to the tax rules.

    What we have now with our privatised retirement scheme is anything but fair.
    Captain
    1st Nov 2019
    6:41pm
    Rae, agree completely.
    Macheke
    30th Oct 2019
    3:12pm
    Rae I agree that everyone should get the pension but where we differ it should be taxed separately to your other income allowing for the value of your home less the mortgage and the amount in your super. The idea would be that those with a home and super assets above a certain level would have their pension reduced or eliminated. The threshold would be “quite high”
    Karl Marx
    30th Oct 2019
    10:41pm
    Far simpler, 99.99% rort free,no future robo debt & saving billions in centrelink costs would be to introduce a universal pension to ALL over 65 & ALL income is taxed at the current rates so no more over generous tax free super earnings etc. Would also eliminate deeming rates, income & asset testing.
    Also ALL politicians would have to fall under the same legislation as every other Australian
    Hoohoo
    31st Oct 2019
    5:37pm
    That's the best idea yet, Karl.

    It'd also eliminate any further problems of "moving the goalposts" that might otherwise cripple certain people, because they'd still have the universal pension to fall back on.

    I think a lot of people commenting here are conflating "hard work all their lives" with "inheriting a bundle so they can then afford creative solicitors to set them & their families up for life and avoid paying real tax like everyone else."

    We need to have a system where the generational mega rich (with Family Trusts) contribute a fair share to internal revenue.
    Macheke
    30th Oct 2019
    11:18pm
    Karl Marx. I think we are not that far apart I principle other than the value of the house or the implied rent needs to come in somewhere to be fair to renters and those with modest value homes relative to those with expensive homes. My approach deals with all this and is pretty simple and does away with means test and hence a lot of wasted efforts that can be directed elsewhere.
    Hoohoo
    31st Oct 2019
    5:08pm
    So, is it suggesting a ceiling value of $1.2 million or is saying by postcode? Why should retired people in the cities be able to have much greater assets and receive the OAP, while country people whose homes aren't as valuable be cut off sooner, even though we have less services (like health and public transport) and have to spend much more time travelling and money on petrol to get such services? These are the reasons why our homes are less valuable - we don't enjoy the same services as city people.
    Bushpig
    31st Oct 2019
    6:49pm
    Once again punish those who work and save. What about collecting the $64 billion owing on student loans? While we are at it let us look at some savings from the $50 billion spent on dud subs. There is so much government waste and duplication to look at when viewing savings. I would rather see GST increase to 15% and remove payroll tax and stamp duty.
    day dreamer
    3rd Nov 2019
    3:45pm
    Even the communist country does not rob people's assets and rights like this government.
    Mariner
    3rd Nov 2019
    5:47pm
    Under a communist government you have no assets or rights and in that case no worries. You do not have to worry about voting either.
    day dreamer
    3rd Nov 2019
    6:00pm
    Marina what you said was true a few dacades ago, but not any more. Take China as an example. The rich there are really very rich now.
    day dreamer
    3rd Nov 2019
    6:06pm
    Most importantly, their retirement pension system is not means tested. The pension is based on your pre-retirement income or your personal contributions. It doesn't matter how much assets you hold and how much other income you have. For the people that are financial struggling, They provide a hardship pension.
    This is a model that is fair for every one. You contribute more you get more.
    Life experience
    3rd Nov 2019
    7:23pm
    Forget it. Give up work and go in the dole. No Point working hard to pay taxes And to pay for others. Why should they spend and not go without and I work hard save hard and go without. I’m the mug !
    Billv
    5th Nov 2019
    9:58am
    Here we go again. Put more stress and pressure on pensioners. So we want pensioners out of their homes which they saved and worked so hard for. So sell your home become a renter, right after that world holiday trip from the proceeds and then become subsidised by who? their wouldn't be any pensioners to take money from. The cost of care for those requiring it would increase and more care facilities would be needed. Oh this sounds like a really great idea. And the big plus is no more home insurance is required, rates, health insurance, vehicle insurance and registration, hang on this may be a great idea after all. Become fully dependant on the Government....
    day dreamer
    5th Nov 2019
    10:34am
    Yes and No. Do you really trust the government to provide you with a descent living standard once you fully rely on them.? What if you sell all assets and then the government is unable to provide for you?
    One of the reasons we worked hard and saved hard, is that we lack of trust and do not have the peace of mind to trust anybody other than ourselves.
    Blossom
    1st Dec 2019
    7:53pm
    I know of a house in SA that was valued at $35,000.00 in 1981 which was valued at $540,000.00 in 2012 on the Council Rates. People don't want to move house just because values have risen. It is a basic 3 bedroom home, no ensuite, kitchen and dining area combined, with no living area in the same area. Only one bedroom has BIR When you walk in the front door you walk string into the living room.
    Blossom
    1st Dec 2019
    7:53pm
    I know of a house in SA that was valued at $35,000.00 in 1981 which was valued at $540,000.00 in 2012 on the Council Rates. People don't want to move house just because values have risen. It is a basic 3 bedroom home, no ensuite, kitchen and dining area combined, with no living area in the same area. Only one bedroom has BIR When you walk in the front door you walk string into the living room.


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