Age Pension: will the family home affect your payment?

What is the best way to spend an inheritance to save your Age Pension?

concept lego houses beside stacks of coins

Cheryl is due to come into an inheritance and is wondering if she should use it to buy a new home and therefore have more asset value excluded from the asset test.

Q. Cheryl

I was wondering if you know whether the Government is going to include a pensioner’s home as an asset from 1 January 2017, and if so, which value will they be starting at?

I am on a part Age Pension and am due to get an inheritance soon, which is large enough that I think it could possibly cause me to lose my Age Pension. If the family home is to remain excluded from the asset test, is it acceptable that I could sell my present home and use the profits and my inheritance to upgrade to a more expensive home, which would enable me to continue receiving my part Age Pension?

A. Your home, if it is your principal residence, will remain excluded from the asset test after the thresholds change on 1 January 2017.

We can’t actually advise what you should do with your inheritance, however, as a general rule, an inheritance will not be considered as an asset. Should you use the money to purchase a financial asset, such as shares, investments or interest-bearing account, then the deemed income will be assessed.

The family home, regardless of its value, will be excluded from the asset test. If you were to sell your home with the intention of purchasing another, the proceeds would be an exempt asset for a period of 12 months, however, would be assessed using deeming under the income test.

While buying a more expensive home may well mean you can maintain your part Age Pension, there may be other related costs, such as stamp duty and increased running costs, which could negate any benefit you receive from your Age Pension.

You may find YourLifeChoices’ Should you downsize? guide a useful reference for costs and requirements involved.

From the information you have given, it seems that your inheritance may be a considerable amount of money. You may wish to consult with an independent financial advisor for the best way to structure your finances to maximise your income.

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    COMMENTS

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    *Imagine*
    15th Aug 2016
    10:21am
    My brain hurts! Since when was a sum of money that we have control over, not counted as an asset? It doesn't matter where the asset comes from, it is still an asset. I think somebody needs to check the statement that: "however, as a general rule, an inheritance will not be considered as an asset." That surely is incorrect and misleading. It suggests that if I inherit a million dollars then Centrelink won't count it as an asset, but if I buy shares or put it in the bank then the deemed income only will be counted. I imagine that what Debbie meant to say is that an inheritance is not counted as income.
    Old Geezer
    15th Aug 2016
    10:33am
    I agree the inheritance belongs to you once you become presently entitled to it.
    Fliss
    15th Aug 2016
    11:10am
    My thought exactly "Imagine"!!
    What a misleading statement!!!!!
    Sounds like if you inherit a million dollars then it NEVER gets counted as funds owned by you!!!!!!!!
    Greg
    15th Aug 2016
    11:32am
    You're correct of course. Unfortunately this website publishes too many of these "facts" which are incorrect.
    Problem is too many people would read this and assume it's fact, particularly the more elderly readers. (Please no one take offence)
    Adrianus
    15th Aug 2016
    12:20pm
    In fairness to Debbie I think the exclusion of the words " which you are not yet able to receive" can provide a vastly different meaning.

    extract from HS site reads...
    "any property or monies left to you in an estate which you are not yet able to receive, generally for a period up to 12 months"
    Oldman Roo
    15th Aug 2016
    3:39pm
    I had a small inheritance not long ago and Centrelink counted every cent of it immediately as an asset . perhaps they were wrong but knowing them , I do not think so . Just in case they were wrong please tell me how I can reverse the adverse effect this inheritance had on my cut Pension .
    TREBOR
    15th Aug 2016
    5:46pm
    Do you earn money from your family home? (cross)

    Did you invest significantly in that home sufficiently to downsize your level of other assets within the last seven years? (check) (move to Step 11. in your Pension Application)......

    In order to be considered for Pension you must provide documentation on all expenditures to upsize your family home within the past seven years prior to retiring. Failure or refusal will mean your application will not be considered.
    Jane
    15th Aug 2016
    10:48am
    I would only consider a new (more expensive) house if that house was going to better meet your ageing needs as well as reduced running costs e.g. orientation, excellent insulation and adequate solar panels to cover your needs. You could also include a granny flat which could be used for a care-giver, or as source of income.

    15th Aug 2016
    11:24am
    This is why pensioners are called freelaoders and bludgers with people like this desperate to get the pension at any cost .People like this should be put on food stamps only.
    Bid
    15th Aug 2016
    12:21pm
    my thoughts as well robbo, greedy people, stop it.
    etty44
    20th Aug 2016
    4:21pm
    I agree. The pension ( & welfare in general ) is for those in genuine need. If everyone keeps milking the system it WILL collapse. Only upgrade your house if that is what you want to do, not just to keep the pension!
    Old Geezer
    15th Aug 2016
    11:41am
    With the new asset test coming in 2017 it would not surprise me to see the government try to put a stop to people upsizing their houses to keep their pensions. The easiest way to do this is to add the house to the assets test. As the house is the most inequitable part of the pension test adding the house to the assets test would make the pension system fairer for everyone.
    Old Man
    15th Aug 2016
    12:19pm
    Sorry Old Geezer but I disagree. I can buy a 3BR weatherboard and iron house in western NSW for less than $80,000 and even if it was included as an asset I can't see how it will affect my pension. If I bought the same 3BR weatherboard and iron house in parts of western Sydney, it would cost close to $1M and then will certainly affect my pension.

    The value of a home is so variable that I feel it would be unfair to include it as an asset. Other factors that affect a pension such as income can be applied across the board as can other assets but a family home can sometimes be a matter of luck when it comes to a valuation.
    Old Geezer
    15th Aug 2016
    12:27pm
    It would be costing you more to live in western NSW than in Sydney so is it fair that you get the same pension which buys less than someone living in a million dollar house in Sydney? Is it fair that you heirs get an $80,000 house whereas if you lived in Sydney they would get a million dollar house? You would not have the cheap transport options of Sydney either.

    The house needs to be added to the assets test to make it equitable for everyone.
    TREBOR
    15th Aug 2016
    5:49pm
    Good point, OM - we just down-sized from a rural acreage to a 3BR one hour from a major city...not much cash left in the kitty and a lot of dusty work to be done to bring the new one up to scratch.

    Should that be counted as an asset? I don't think so - it's a home pure and simple and is being modifed to meet the requirements of age and disability.

    Hardly a 'tax dodge' or a dodge to get Pension.
    TREBOR
    15th Aug 2016
    5:50pm
    On the other hand, if people are foolish enough to sink massive amounts into house improvements, and thus end up with a huge home they echo around in and which accumulates dust at a prolific rate - just to get a pension - they should be looked at.
    Rae
    15th Aug 2016
    5:51pm
    Old Geezer if the family home was considered an asset then the bank interest, council rates, insurance and maintenance would have to be tax deductible. No way will they do that.

    If all those costs were tax deductible then there would be equity with investors and yes you could include the family home in an asset test. At the moment the family home is actually a liability.
    Old Geezer
    15th Aug 2016
    7:44pm
    If you have an investment property they only take the gross rent for some welfare payments not the net rent.

    Also they deem the capital tied up in your share investments without the costs of running them being taken into account.

    If you own a property not your home they just add it's value into the assets test without deducting anything.

    A car is a liability but hey add it's value in. Same with your house contents.

    So why would they bother about bank interest, rates, insurance on the family home?

    If they are consistant they would just add it's voue into the asset test.
    Rae
    16th Aug 2016
    7:22am
    I was thinking about during the accumulation stage. I have always used positive gearing and savings except the one time I borrowed and ended up paying 23% interest and lost 30% of a house I owned in a fire sale to get out of it but many investors use negative gearing to accumulate assets like shares and property. This is a type of welfare really though isn't it? A government payment or rebate because you used bank money instead of your own.

    The ability to deduct investment costs from tax has always allowed greater accumulation to occur.

    The family home is entirely self funded though, except for the first owner's grants which was another LNP nonsense.

    I don't consider my home as an asset. It returns me no income and costs a regular payment to keep. Unlike my income producing assets which pay fortnightly and quarterly.

    Sounds to me as if Centrelink rules are as disfunctional as all the other crazy policies we have had from stupid government for the past two decades. If you set out to destroy a country and it's revenue base you could use the past few government terms as a guide book to accomplish it.
    Anonymous
    17th Aug 2016
    7:23am
    I think a home is a liability in retirement. My neighbour - who is asset tested- worked out that after Jan 2017 it will cost her $450 a week to live in her own home. That's calculated by adding loss of pension, rates, insurance, and maintenance costs. If she paid $450 in rent, she would get considerable rent assistance, but because she slaved and went without for 30 years to pay off a mortgage, she suffers a huge financial loss.

    Very unfair!
    Old Geezer
    17th Aug 2016
    3:26pm
    Of cause a home is a liability. It costs money but doesn't make any. A car is also a liability. Centrelink has a very different idea of what is an asset to I have.
    Anonymous
    18th Aug 2016
    10:45pm
    That's rather idiotic, OG. An asset does not have to make money. It merely has to have a value. But homes DO typically make money. They are almost always sold, eventually, for much more than they cost. And they generate huge benefits and savings for those who purchase them.

    Obviously you don't speak English. The dictionary defines an asset as ''a useful and desirable thing or quality'' and assets as:

    (a) ''items of ownership convertible into cash; total resources of a person or business, as cash, notes and accounts receivable, securities, inventories, goodwill, fixtures, machinery, or real estate (opposed to liabilities ).
    b. Accounting. the items detailed on a balance sheet, especially in relation to liabilities and capital.
    c. all property available for the payment of debts, especially of a bankrupt or insolvent firm or person.
    d. Law. property in the hands of an heir, executor, or administrator, that is sufficient to pay the debts or legacies of a deceased person

    Not a single word there about an asset having to MAKE MONEY.

    The problem with houses is a STUPID and UNFAIR pension system that very harshly punishes some for owning a home, while rewarding others. Essentially, it punishes those who are honest and responsible and don't manipulate, but accept modest accommodation and invest to try to be partly self-sufficient. It rewards those who plunge huge amounts into expensive homes to dodge the assets test. It's patently IDIOTIC, grossly unfair, and economically unsustainable. But idiots are still endorsing it. Mindbogggling!
    Old Geezer
    19th Aug 2016
    3:36pm
    So how can something be an asset is it can't be converted into cash? I'm worth millions in goodwill but I wouldn't tell Centrelink that I had goodwill worth millions.
    Farside
    15th Aug 2016
    11:44am
    I wonder if access to Health and Senior Cards would encourage more retirees with the capacity to fund their retirements to do so rather than contrive their affairs to pervert the pension and increase legacy for heirs.
    Old Geezer
    15th Aug 2016
    12:00pm
    I too was wondering the same as surely no one would want to tie up their liquid assets just to get the fortnightly pension alone. Maybe get rid of all those benefits and pay more as a pension to stop people trying to get that dollar of pension just to get the benefits.
    Rae
    15th Aug 2016
    5:57pm
    Yes Brian I actually am more annoyed that at the same age and retired I pay far more than other's for the same goods and services purely because I saved and invested instead of spending every cent I got and I was never a high income earner either but a single parent working at ordinary wages and running ordinary business ventures.

    Why should Joe or Jane who spent all their money get the great discounts and savers have to pay full price.
    Anonymous
    15th Aug 2016
    6:37pm
    Rae - that is a great point.

    But how would the government determine who wasted it and who didn't? I guess that is the determining question.

    That would be hard to ascertain if you were a good earner, but had some tough luck with your own genetics, partner's, parents or kids genetics or had a bad accident and needed to use your assets for those issues, etc. - compared to a well paid, but profligate person.

    It seems that we are doomed to get nothing if we have prepared for our retirement because we can afford it - BUT have the same welfare available to us in theory down the track if we need it.
    Old Geezer
    15th Aug 2016
    11:27pm
    Rae we pay more than full price for those goods and services as we not only have to pay for our goods but make up for the discounts given to pensioners. I have been told this many times by the providers.
    Radish
    16th Aug 2016
    9:47am
    I actually wrote to the PM some years ago suggesting that all people regardless of their income/assets should be given the concession cards. Self funded retirees from say 70 years of age.

    The response I got was NO
    Adrianus
    16th Aug 2016
    10:20am
    Pepe, it would have to be a better option than giving the money to insurers. Although Medibank shareholders would have a whinge.
    Adrianus
    15th Aug 2016
    12:16pm
    I've just had a quick look and it appears to me that the only change to assessing the home under the assets test is a small increase from $151,500 to $200,000.
    Rodent
    15th Aug 2016
    3:06pm
    Frank

    Sorry but I am confused by your comments. What did you look at and what do the figure relate to please?
    Adrianus
    15th Aug 2016
    3:24pm
    Rodent, under the current arrangement a non-homeowner has an additional $151,500 in the assets test limit. As of 1st January 2017 this figure will increase by $200,000, when compared to that of a homeowner. Therefor, ipso facto, from that date the home is valued at $200,000. It is wrong to say that the home has no consideration under the assets test. In fact all principal places of residence will be regarded as having the same value under the assets test as they now do. Rodent, look for yourself... https://www.humanservices.gov.au/customer/enablers/assets#assetstestlimits
    Rodent
    15th Aug 2016
    3:54pm
    Frank

    Thanks, I am aware of the points you are making in relation to the Asset Values, and the changes, having written about this "Pension subject" often , (others may not agree with your points) It was just what you wrote that confused me, possibly because of it brevity

    Thanks for clearing it up
    Rodent
    17th Aug 2016
    2:02pm
    Frank

    You seem to be reluctant to accept the fact that the Family Home is NOT currently Included in the Assets Test- That's what this article says and that's a FACT
    The $200k figure, after 1 Jan 2017 is nothing more than a notional Figure, as I have said before.

    We might both agree to differ in our interpretation of the facts, but that's the POLICY position of the current Govt. In fact Morrison is on record as saying the Family Home will NEVER be included in the Assets test on his watch, but I would believe him anyway.

    You might care to reflect on your postings back on 13 April 16, -Under previous post -(Family Home in Asset Test) -and compare your comments, mine, others, including Rainey , you will of course then note what was said and who said it.
    Please don't misinterpret my views or read into them what's not said and I will do the same for you, and others.

    All I ever try to do here is present information about the Jan 2017 Pension changes based on factual documents and sources available to me.

    Having contributed material to Aus Journalists in the past, (still being asked even now) about these Pension changes its important to understand that a Journalist/commentator will always put a particular slant on their article, or express views that are often just UNTRUE.

    As you would be aware there is a strong push from many people/Organisations, some with vested interests, to - " Include the Family Home in the assets test" I am very concerned by aspects of this push because its often nothing more than Kite Flying, and really lacks the necessary input from "real people" who are essential in any change process.

    15th Aug 2016
    3:11pm
    "stamp duty and increased running costs" when buying a new home will NOT negate any part of an Age Pension you may be getting as these are OUT-GOING costs and will only bring your liquid assets DOWN and therefore have only a POSITIVE (increasing) effect on your pension. Poorly written article.
    Adrianus
    15th Aug 2016
    3:32pm
    Clearly Cheryl and her ilk have no need for more affordable housing. They want house prices to go through the roof. It probably wont happen Cheryl. You may find you've spent $200k to save $40k??
    Old Geezer
    15th Aug 2016
    3:54pm
    Agree she needs to do the sums and work out how important that pension is to her. Moving house to save a few dollars may not be worth it.
    Rodent
    15th Aug 2016
    4:01pm
    For those interested in a read

    An article was written by Jackson Stiles of the New Daily -Aug 12th - "Calls grow for Urgent Review into pending change for the Age Pension -its going to hit people for Six".

    This article has links to published data by the University of Melbourne and Advisory company Willis Towers Watson - sourced from HILDA data- its forward looking

    15th Aug 2016
    4:06pm
    Cheryl, the only thing you can do at the moment under present legislation is to upgrade to a newer, bigger, more expensive home and use whatever liquid assets ("readies") you have and can afford to spend, while still having enough to live on, to furnish your new place with decent contents, and possibly buy a new car (they depreciate quickly) to get your asset level down to a level where you won't be getting any less for a pension. This is not easy if you still want to keep a comfy amount of cash in the bank or any ADI as this will be counted against you and the foolish, farcical deeming rates will also lessen you pension payment. Unfortunately, it seems as you fall in the category as an "unfortunate fortunate" and can only hope and pray that the stupid assets test is brought into 21st Century levels.
    Adrianus
    15th Aug 2016
    4:10pm
    Or Cheryl better still, I will send you my bank details.
    Old Geezer
    15th Aug 2016
    4:25pm
    Let's face it if you have too many assets for the 2017 asset test then you don't need the pension. Maybe it's best to move on and enjoy yourself with your money while you can instead.
    Chez
    15th Aug 2016
    4:34pm
    Thank you Frank for your advice, i am really looking to just get a better home with less garden and lower maintenance in a nicer area than where I live now and hopefully big enough that when the time comes I can have some one live with me to assist me, so I really am quite upset with some of the comments against me regarding me being greedy etc, I have been on my own for the last 20 years and by being frugal and going without have managed to pay out my mortgage on my modest house and now that I will be at some stage getting a bit of an inheritance I'm called greedy as I want to upgrade into a nicer home to see me through my final years!
    Chez
    15th Aug 2016
    4:40pm
    Fast Eddie I meant to answer you but I replied to Frank accidentally, thank you for your comments very much appreciated!
    Anonymous
    15th Aug 2016
    5:03pm
    Chez, you are welcome. Now is the time to spend, girl, spend! Enjoy what you have while you can. New car, smart TVs, new wardrobe, dine out when you want, get those bits of jewelry you might have wanted, etc, etc. Just be very careful of following through on advice from financial advisers or pundits of the same ilk, remember that charity starts at home and also that money has torn apart many a family, and keep financial status to yourself as this helps prevent envy and robbery. God luck to you. Enjoy!
    Anonymous
    15th Aug 2016
    5:06pm
    P.S. Also disregard comments like those below from Robene. They are only sour grapes. Age Pension IS an entitlement.
    Radish
    16th Aug 2016
    9:51am
    Chez, be like the majority of retirees....arrange your finances to suit you.

    If you want to buy a $10million dollar apartment go for it and still get the pension ;).

    No point in anyone saying it is not fair; if people want fair ALL homes should be asset tested. Anyone who has shares/money in the bank is asset tested.
    Radish
    16th Aug 2016
    9:52am
    Good term "unfortunate fornunate" :)
    Anonymous
    18th Aug 2016
    10:58pm
    OG, who the hell are you to ASSUME that just because someone is affected by the asset test change they don't need a pension. No wonder this country is stuffed up, when people continue to be so ignorant and arrogant, yet try to force their views.

    You are DEAD WRONG. There are thousands out there who DO need a part pension despite having ''assets'' (according to Centrelink - though often they are actually liabilities because they are worthless in real terms, unsalable, and don't return income). You have no idea what someone else's financial circumstances are, so put a sock in it and stop bullying with your invalid assumptions. It's really not nice at all.
    Old Geezer
    19th Aug 2016
    3:31pm
    Rainey being a bean counter I know if something is worthless then it can't be counted as an asset. So why are these people listing these as assets? You are making no sense with your worthless assets to me at all.
    Robene
    15th Aug 2016
    4:27pm
    I can't believe that what I have just read about using her inheritance to purchase a more expensive home so that she doesn't lose her part pension.
    How very selfish.
    Government benefits are there to help those who need it, not those who just believe that it's their entitlement.
    I worked all of my life and paid into superannuation fund. Now that I'm retired, I am not and probably never will be entitled to any benefit from the government. But then, I don't see it as an entitlement.
    Old Geezer
    15th Aug 2016
    7:25pm
    Only those that will lose out see it as an entitlement. Meanwhile those of us who are not entitled see it for what it really is - welfare.
    Radish
    16th Aug 2016
    5:10pm
    There are others on here are in the same boat Robene as yourself; I am just telling it as it is...this is what is happening and until things change it will continue with people accessing the pension by rearranging their assets.

    Personally I am pleased I have no contact with Centrelink and I am not envious one bit of others who get a part or full pension and because it is means and assets tested, it is, as you said, not an entitlement.

    However, I have always thought that the concession card should be allowed to all retirees; self funded a bit later than those on government pensions.

    Hubby and I are able to look after ourselves in retirement but if anything untoward happens to us financially and we go down the gurgler the safety net is there for us as it is for anyone.
    ex PS
    15th Aug 2016
    5:04pm
    I can't believe the self righteous indignation of some of these contributors. Some I expected as they are constant contributors on this subject are are obviously driven by envy. But the others are surprising, it is common practice by business owners and investors to use the current rules to avoid paying tax and to build profit margins, these people are generally applauded as astute operators. But let a retiree use the rules to maximize their pension benefit and they are critisised as some sort of system rorter.
    When did we turn into such sanctimonious, judgmental envious busy bodies?
    The woman concerned is talking about upgrading her home to meet future needs, this will probably reduce the need for major maintenance projects in the future and provide a more suitable environment for a retiree. What gives anyone the right to tell someone else how to live their lives and spend their money?
    As I have said before, I hope this useless government does start to seriously consider treating the family home as an asset, the sooner they do the sooner we will get rid of them. No home owner in their right mind will stand for this.
    Anonymous
    15th Aug 2016
    5:34pm
    ex PS, your comment is a wise, understanding one and very refreshing compared to a lot of the drivel above. Yes, as you have said, if one is able to prepare for their future needs and are financially able to do so then good luck to them. This is no dress rehearsal, so make the most of it.
    Chez
    15th Aug 2016
    5:36pm
    Thank you for your understanding that's it's not greed but looking into the future for my needs, appreciate your positive and not negative comment!
    Rae
    15th Aug 2016
    6:06pm
    Chez I have a very good friend who just sold most of her investment portfolio to build a beautiful home in a great location and achieve the reliability and ease of the full aged pension. She could not be happier. Trying to maintain income from investments was doing her head in considering the ridiculous investment climate we are experiencing.

    She did however consider ongoing costs of rates and insurance etc to make sure she would be able to cover costs on the pension and kept an allowable amount for the odd spend or holiday.

    If it makes you happy and you can achieve it the go for it and good luck.
    Old Geezer
    15th Aug 2016
    7:27pm
    If it is what you want then go for it but don't do it just to keep the pension.
    Anonymous
    17th Aug 2016
    7:44am
    Well said, exPS. A pity others don't have similar respect for people whose circumstances and reasoning they know nothing about.

    Trebor is right in his post below. The more the government tries to regulate and control, the more incentive there is to find ways to circumvent regulation that is typically grossly unfair to many and downright cruel to some.

    Lots of retirees simply cannot cope with the demands and stress of investing in the stock market or real estate. For many, bank deposits provide the only security they can live with, and the low returns they now receive mean that they need more than $1 million in returning assets (excluding their home, car, furniture and personal possessions) to be as well off as a pensioner.

    It's patently WRONG and CRUEL to suggest this class of people should suffer for their inability to achieve higher investment returns (an inability that typically results from advanced age or disadvantage in earlier life). And it's grossly UNFAIR and CRUEL to suggest that they should have to live on their savings while those who didn't bother to save are supported by the taxpayer. Punishing savers is not good for the economy, and it's not good for society. It denies the population a basic freedom that we purport to guarantee - the freedom to determine your own spending preferences. If you spend on overseas cruises and fur coats, the taxpayer supports you later. If you choose to use your money to enhance your grandchildren's educational opportunities or help your kids pay off their home, you are deprived - unless you give the money to the kids 5 years before retirement. That anyone can deem that ''fair'' is mindboggling. You would have to be a blithering idiot to think there was any ''fairness'' or even common decency in depriving someone because they chose to preserve their money for their own later life needs and to help their kids and grandkids out when and if it becomes clear that they can afford to.

    As for the house, it's already assessed. My neighbour worked out that after January 2017 it will cost her a whopping $450 a week to live in her own home (rates, insurance, maintenance + huge pension loss). Anyone renting at that rate would get generous rent assistance.

    The current system is so seriously flawed that nobody should be talking about whether or not to change thee assets test to include the family home. Rather, they should be talking about totally overhauling it to introduce at least a reasonable level of fairness and to stop punishing the responsible for working and saving - to remove the huge incentives to cheat, manipulate, and overspend in order to avoid being deprived of all the benefits of decades of hard work and saving.

    Our current system was designed for a very different world. It simply doesn't suit today's economic environment. And adding the family home to the assets test will make it 1000 times worse.
    Old Geezer
    17th Aug 2016
    2:38pm
    It is not that lots of retirees cannot cope with investments other than putting their money in the bank. It is that they have had it so good for so long and made a good return without too much effort and now that effort is required to get a decent return they are too lazy to put in that extra effort.
    Anonymous
    18th Aug 2016
    10:52pm
    Sorry, OG, but that's ignorant arrogant BS from a heartless inhuman monster who has no capacity for empathy and no appreciation of life in the real world for people who suffered disadvantage. You really sound like a nasty, horrible person.

    The people I see who can't cope with investments HAVE NEVER HAD IT GOOD. They are where they are because they've had NO PRIVILEGE, NO BENEFITS. They've had shit heaped on them for most of their lives by greedy, self-serving egotistical pigs who now point the finger and make vile, baseless accusations. Most of them were PAYING interest - struggling to pay off homes on lousy wages while putting kids through school - when rates were good. Lazy? They worked their guts out for stuff-all return. And now they are being kicked in the guts and blamed for the mess the rich and privileged have made of the economy.

    Stop being so nasty. YOU COULD NOT BE MORE WRONG.
    Old Geezer
    19th Aug 2016
    3:26pm
    If people were as hard done by as you suggest Rainey how did they managed to get over a million dollars in assets? These are the people whose out with the 2017 assets test not those with next to nothing or very little. Those people with very little will still do very well an some will even benefit from the changes.

    I shake my head sometime wondering what you are really on about. Put simple if you are badly effected by the 2017 asset test changes then you are really well off and don't need the pension.
    TREBOR
    15th Aug 2016
    5:43pm
    Perhaps there is a need to require that spending on the home to down-size retirement funding and thus receive pension should be kept for a specified time before retirement... seven years?

    Every step you take (Sting?) to try to contain and curtail those in the minority who do 'cheat' in some way - the more draconian your ideas become...

    Perhaps the end game is to arrange for the populace to scream out for a regulated society.... that's the other side of the coin...

    Trebor Principle of Relativity - The greater the effort to contain wrongdoing, the greater the wrongdoing inherent in the effort....
    JO
    15th Aug 2016
    6:48pm
    DHS Centrelink has a Financial Information Services Officer (FISO) available at the majority of offices as well as phone interviews. You should not make any major financial changes without a interview chat with one of these officers. They are great, a lot of bad decisions can be avoided and good decisions confirmed correct.
    Franky
    15th Aug 2016
    8:29pm
    This sounds wrong, surely an inheritance received has to be an asset once it hits the my bank account! Please clarify!
    Anonymous
    16th Aug 2016
    7:39am
    Yes Franky it certainly does become an asset I can assure you.
    Dot
    15th Aug 2016
    10:32pm
    I want to see heads roll and political blood flow down our streets if the home is counted as an asset. We worked bloody hard without any assistance from Government, every speck of dust we have paid for not like todays refugees receive every damn benefit under the sun and still show no respect for this country. I've had a gut full of those behind the screen working out how to continually screw us.
    in2sunset
    15th Aug 2016
    11:15pm
    Dot - I absolutely, thoroughly agree with you. I am single, mid 60's, and have worked my butt off for years, often in 3 jobs, never taking holidays or buying new cars, to pay off my small simple little house. No bloody way will I accept the Govt making the primary residence part of the assets test. My bludger of a sister has lived most her whole life on welfare, only working cash in hand, smokes like a chimney, and is now on Disability pension because of her chosen life style, lives in a govt house, with her hobby being on-line gambling. Why should I be penalised because I was not a bludger, paid my tax, never took govt handouts? I only have minimal super due to low paying jobs, and a criminal employer who didn't pay my super, and my house is totally off limits. I too am sick of tired of over paid and self interest only leaders continually screwing with those who have contributed much, and only trying to live out their last days in peace and quiet.
    Adrianus
    16th Aug 2016
    6:30am
    Dot, "I want to see heads roll and political blood flow down our streets if the home is counted as an asset."

    There is no way to break this gently Dot. The home is counted as an asset.
    You mean to say you want heads rolling and blood flowing if the count is more accurate.
    Bonny
    16th Aug 2016
    7:23am
    It would not surprise me that the majority of people would be better off if the house was accurately included in the assets test. A couple with $2 million house now collecting full pension would be treated the same as the couple with a $500,000 house and $1.5 million in assets. If you only have a modest home on a normal block then I can't see how you would be effected if the hiuse was included. The thiught of including the house has been nothing but a scare compaign from as far back as I can remember nothimg more.

    So unless you house is worth a lot more than the average pensioner's abode if it lumped in with your other assets you may actually get some benefit out of it. That said my personal opinion is that they will only can't the houses value above a certain level as part of the assets test. That will not increase the government's pension budget whereas adding it to other assets most likely will.
    Adrianus
    16th Aug 2016
    7:54am
    Bonny, I think one of the reasons for the one number fits all method is because it is too hard to value each property and it is also too unfair to make the number higher because some live in caravan parks or in a $100,000 shack.
    Rodent
    16th Aug 2016
    8:47am
    Bonny I am still wondering if you and Old Geezer are the same person?

    Re your Post @7.23am 16/8

    House Accurately included means what?
    Modest home, normal block means what?
    The couple with $500k House and $1.5Mil in assets would not get a Pension.
    The Current assets Test could never be used IF the house were ever to be included at ANY percentage of its value, by what ever method. The numbers don't add up.

    Please explain how a home owner pensioner couple on $250k Assets with a $400k House could ever get a benefit (ie increased pension) if ANY percentage of the $400k house value was included in the CURRENT Asset Test?

    You might be right at one point, that IF they ever counted the Home in any Assets Test it may only be above a certain Level.

    Lets be clear here the Govts objective if they were ever to attempt to include the home in ANY form of so called Assets Test would be not about fairness and equity, it would be ALL about reducing Pension/Welfare expenditure.
    Adrianus
    16th Aug 2016
    9:01am
    Rodent you and Dot must be the same person too?

    "You might be right at one point, that IF they ever counted the Home in any Assets Test it may only be above a certain Level." - Rodent.

    You have a very short memory as it was only yesterday that you learned that the home is included in the assets test and it's value is $151,500 which will increase to $200,000 as of 1st July 2017.
    This is like ground hog day ha ha ha ha!!!
    Farside
    16th Aug 2016
    9:07am
    It is a matter of choice whether someone chooses to invest his or her hard-earned cash in a residential home. This is sufficient reason for homes to be included in the assets test. Having levelled the playing feel it is then a matter of determining the cutoff level for pension eligibility.
    Rodent
    16th Aug 2016
    9:29am
    Frank

    I am not interested in a rubbish interchange with you, or anybody else. Stop being stupid I am not Dot, also I was well aware of ALL aspects of Home Owner Assets Test Thresholds and related issues long before you wrote what you did. All I asked you to do was clarify your brief post, which you did.
    Rodent
    16th Aug 2016
    9:41am
    Dear Frank

    Despite you assertion the family home is NOT currently included in the current Assets Test. It is false and misleading to say otherwise. What is included is a $200k Notional figure as the difference between home owners and Non Home owners, as from 1 Jan 2017

    When I have more time I will produce for you information that will explain the thinking behind this decision, or you could go look it up for yourself.
    Anonymous
    16th Aug 2016
    10:10am
    Brian, what you said couldn't be more wrong nor a bigger heap of rubbish. To give more of a pension to those who have squandered their earnings or have never worked at all is a travesty to initiative and a true dis-incentive to ones' desire to achieve something for themselves and their families. You sound like a long-term dole recipient who also receives rental assistance - one of those I've supported my whole working life. Don't leave your smokes at the pub, now will you?
    Rodent
    16th Aug 2016
    4:33pm
    Frank Re Home owner/Non Home owner

    The following is an extract of a letter by the Senior DDS manager in response to an Email I sent him- hope this adds to your understanding.

    " I note your comments about the different assets test thresholds that apply for Homeowners and Non- Homeowners. People who own or are buying a their principal home have a lower Assets Test Free area than people who do not, because the home is not counted as an Asset for the Assets Test. The Principal home was exempted from the Assets Test when it was introduced in 1985, in recognition of the unique importance placed on the family hoe=me in Australian society. Home owners commit a large portion of their assets to the purchase of their principal home. The higher Asset free areas applying to Non Home owners ensures fair treatment under the assets test for those who have chosen not to, or are not in a position to purchase their own home.

    The increase in the Assets Test threshold for Non Homeowners from 1 Jan 2017 ,as part of the rebalancing the Assets Test parameters ,reflects the difference between the asset test thresholds for Homeowners and Non Homeowners has not increased in real terms since 1985, even though property prices haves risen substantially during this time".

    Buried in Senate Committee notes related to the Bill are other references to these issues, as there are elsewhere.
    Rodent
    16th Aug 2016
    4:35pm
    Opps

    meant DSS not DDS
    Adrianus
    16th Aug 2016
    5:00pm
    Gee Rodent you really have a bee in your bonnet about the semantics.

    Your mate at the DSS was going ok until he got to the last paragraph. he he he. which reads.....

    "The increase in the Assets Test threshold for Non Homeowners from 1 Jan 2017 ,as part of the rebalancing the Assets Test parameters ,reflects the difference between the asset test thresholds for Homeowners and Non Homeowners has not increased in real terms since 1985, even though property prices haves risen substantially during this time".
    Ipso facto if you are a homeowner the home will be assessed at $200,000 under the assets test. An increase from $151,500. It's a duck Rodent!
    Farside
    16th Aug 2016
    5:28pm
    @Eddie 10:10AM ... I must have touched a raw nerve to spark such a reaction however I suspect you did not comprehend what I wrote. Fortunately your misguided preference for "initiative and a true incentive to ones' desire to achieve something for themselves and their families" cannot be imposed by you upon anyone.

    No matter how much you wish you could deny those who in your judgement "squander earnings or have never worked at all" with access to a pension safety net, it is not going to happen and not just because you are a powerless numpty but because your condescending and uninformed opinion is wrong. I guess that is tough for you to hear but get over it.

    And as for your personal characterisation of me as a "long-term dole recipient who also receives rental assistance - one of those I've supported my whole working life", it makes me laugh. I am guessing you enjoyed a simple working life with little authority that did not require you to have insight or understanding of people. In case you are interested, I have never received dole or indeed any government handout except for a disabled parking permit. I have never rented a property except for a holidays nor inherited anything. I don't smoke nor hang around the pub so not much chance our paths will cross.
    ex PS
    19th Aug 2016
    9:35am
    Rodent , I stopped wondering about OldBon months ago, I am pretty sure they are.
    Not Senile Yet!
    16th Aug 2016
    1:08am
    Both Parties need to come to terms with one simple Fact!
    The family Home was bought and paid for by Money earned AFTER TAX was paid on it!
    To include it in any Asset Test is to Penalise those that went without to do so!
    The 80's idea of Penalising for it's own sake is dead!!!
    People need to be rewarded....not penalised for doing the right thing!
    Yes! By all means set a Limit. But do so by building in an automatic adjustment like the CPI to that Limit!
    Any more attacks on the Age Pension will see 30% of the Voters penalise whichever Party deems it okay......because it is not!
    It is simply Age Discrimination....nothing more, nothing less!!
    There is no Point in having Discrimination Legislation ....if the Government itself ignore it!
    Time to set a Minimum Corporate Tax Level in Australia and a Separate Minimum for Small Business under 1 Million turnover!
    No one should be allowed to NOT pay Tax anymore.....it is unsustainable!!!
    Bonny
    16th Aug 2016
    7:33am
    If you know anything about tax law you will realize that the tax corporations pay is only a tax offset for individuals owning that corporation. Once they access dividends from the corporation they pay tax on it at thier maginal rates less the tax paid by the corporation. So it is taxed at the individuals rate. Why not lower the corporation tax rate and give them more money to spend on capital and jobs. The individual will actually pay more than on any dividends received from the corporation.

    Also the lower the company tax rate the more tax they will pay instead od paying tax accountants big sums to minimise their tax. That said unfortunately we now live in a world economy so unless we have same tax rates as other parts of the world multinationals will pay their tax elsewhere.
    Adrianus
    16th Aug 2016
    10:16am
    Absolutely Bonny. I don't understand why many are upset with the yearly profit of the CBA? They will have a tax liability of $3b making them our biggest taxpayer. They will pass on most of the $6b to shareholders by way of a fully franked (I love that word) dividend. In some cases the ATO will reimburse shareholders to rebalance their tax liability. What is not to like about that??!!!
    Farside
    16th Aug 2016
    10:20am
    Investments in other assets such as shares, deposits, objects are also purchased with after tax money. If you believe in fair and equitable then housing should be included in assets otherwise people should structure their retirement arrangements to suit themselves.
    ex PS
    19th Aug 2016
    9:37am
    Frank, they will only pay that amount of tax if their gang of accountants can't figure out a way of avoiding it. I doubt the government will see much of that money.
    Adrianus
    19th Aug 2016
    10:16am
    ex PS, are you saying the CBA dividend will not be fully franked? If that's the case I wonder how investors will react?
    I guess Labor and the Greens will be happy about the news of BHPs loss.
    By the way what happened to my formal salutation of "Dear Frank"? Are we now besties?
    ex PS
    19th Aug 2016
    5:45pm
    Dear Frank, excuse me for not being as conversant with finances as you, but I did not think that paying dividends to investors was the same as paying tax.
    Adrianus
    19th Aug 2016
    6:30pm
    Yep, if you get your 5.5% dividend and it has already had company tax paid then as a non taxpaying investor you will get a cheque from the ATO equal to 1.65%. That's an income distribution of 7.15%. BHPs debt raising resulted in the ATO forgoing about $1b in tax but I doubt if the CBA will escape the inevitable. Don't believe the lefty propaganda that listed companies must be bad, I don't mean to be unkind, but they are just capitalising on people's lack of understanding. It's good politics rich = bad, big business = bad. The funny truth is that BHP and CBA are owned by people like you and me.
    Radish
    16th Aug 2016
    9:45am
    worth reading this

    https://thesmartmoney.com.au/inheritance-and-centrelink/
    Rodent
    19th Aug 2016
    7:42pm
    Frank

    Re posted JFY

    You seem to be reluctant to accept the fact that the Family Home is NOT currently Included in the Assets Test- That's what this article says and that's a FACT
    The $200k figure, after 1 Jan 2017 is nothing more than a notional Figure, as I have said before.

    We might both agree to differ in our interpretation of the facts, but that's the POLICY position of the current Govt. In fact Morrison is on record as saying the Family Home will NEVER be included in the Assets test on his watch, but I would not believe him anyway.

    You might care to reflect on your postings back on 13 April 16, -Under previous post -(Family Home in Asset Test) -and compare your comments, mine, others, including Rainey , you will of course then note what was said and who said it.
    Please don't misinterpret my views or read into them what's not said and I will do the same for you, and others.

    All I ever try to do here is present information about the Jan 2017 Pension changes based on factual documents and sources available to me.

    Having contributed material to Aus Journalists in the past, (still being asked even now) about these Pension changes its important to understand that a Journalist/commentator will always put a particular slant on their article, or express views that are often just UNTRUE.

    As you would be aware there is a strong push from many people/Organisations, some with vested interests, to - " Include the Family Home in the assets test" I am very concerned by aspects of this push because its often nothing more than Kite Flying, and really lacks the necessary input from "real people" who are essential in any change process.


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