Budget 2016/17: family home included as an asset?

Will Budget 2016/17 include the family home in the assets test?

michael caton in the castle

In the final article of our Budget 2016/17 series, which focuses on different aspects of retirement income, we consider potential changes to the exemption of the family home in the Age Pension assets test, a situation which may change in the May budget. We also invite your feedback and participation in our Federal Budget 2016/17 survey on the measures that you believe should be introduced by Treasurer Scott Morrison to best support your need for a sustainable retirement income.

The current rule
Whether it is worth $100,000 or $10 million, your primary residence is currently exempt from the asset test for Age Pension eligibility.

Suggested changes
Many organisations have suggested the introduction of a threshold of about $2,500,000 or $3,000,000 as the level at which the family home is counted as an asset by Centrelink; reason being that those in houses worth this amount could probably fund a larger proportion of their own retirements, by releasing equity in these homes or downsizing and using the proceeds as retirement income. In particular, the Actuaries Institute has suggested a partial assets cap, but this would be balanced by exemption for income derived by access to the equity in the family home.

Opinion
Darryl Kerrigan in the Aussie classic The Castle nailed it. A man’s home is his castle, particularly in Australia. So any suggestion that the home be viewed as an asset that counts us in or out of an Age Pension is normally met with fear and loathing. But we are now living in times when an overheated housing market means many inner suburban homes are valued at $2, $3, $4 million or more.

So should the owners really expect the public purse to support them in retirement? Yes, there is the argument that these owners have probably paid more than their fair share of taxes over the past 40 or 50 years. But is that a sufficient reason to allow the family home to remain fully exempt from the Age Pension asset test? It’s a tough call, but I believe that those living in homes valued at $3 million or higher do have choices that are denied to many. And that it is fair to expect them to contribute more to their own retirement than those who are renting or living in much humbler abodes.

So, where to draw the line? Above $3 million, and using the Actuaries Institute’s approach, of asking such owners to release equity from their homes is very smart – with the inducement that this income will NOT be assessed in income testing for the Age Pension. It seems like a win-win for the Government as well as asset-rich retirees.

What do you think?
Should the family home remain fully exempt from Age Pension assets testing? Or should homes above a certain amount be, at least partly, included?





    COMMENTS

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    Idontforget
    7th Apr 2016
    10:33am
    Unfortunately this is a problem when looked at in isolation. But with the current superannuation system and Government pensions, it is only a problem amid a plethora of other problems. There are arguments for and against. Why should a retirees million dollar home be excluded as an asset when somebody in a rural area who has no public transport and has to drive thirty kilometres to buy a carton of milk has his/her car classed as an asset.
    What needs to be done is the whole superannuation and Government pension issues be revamped to suit the 21st century.
    But of course that will never happen while we have the adversarial party system in our Government. Both sides will nit pick the other and at the end of the day it is put in the 'to hard basket'.
    MICK
    7th Apr 2016
    11:41am
    The real problem is the refusal to address the collection of revenue from the rich and their big business (multinational) interests. And then you have tax evasion on a massive scale as evidenced the other night. The British Virgin Islands has half a million shelf companies which for the most part hide money and disguise the owners.
    Whilst there may be grounds to put a limit on the value of a home ($3 million currently seems to be about right) the current government with its vested interests needs to go after the big end and COLLECT OUR TAXES rather than go after those who earn so little anyway and who often live from pay packet to pay packet. Not much hope of that other than window dressing before an election.
    Blossom
    8th Apr 2016
    10:44am
    A fairer with the value of the house should be a set amount of the value should be exempt and the rest included as assets. Otherwise there is going to be people selling their houses and spending heaps of money on luxuries just to get the pension.
    People who scrimped and put extra in superannuation that brings them just above the asset limit get nothing at all. They don't even get a health care card. It is no incentive to save so hard to be taxed extra because you have saved money in your bank account in case you suddenly have several things break down at the same time. e.g. our washing machine, hot water service and our water softener all broke down within a month of each other. A few months later our fridge did too. I could have done what others did - drink, smoke and gamble it away.
    LiveItUp
    8th Apr 2016
    11:12am
    If you have enough money not to get the pension a washing machine break down is a mere inconvenience not a disaster.

    A washing machine breakdown for a young couple who barely make ends meet each week is a real disaster. They get none of the benefits pensioners get but they surely need them.

    This is where the system is completely wrong.
    Dollars over Respect?
    7th Apr 2016
    10:51am
    This appears to be a good idea, however, with the ethics demonstrated by the management of the banks - 3 of the big 4 - recently being exposed as disgustingly poor and no longer 'trustworthy nor honorouable' organisations, this opens up another opportunity for further 'rorting of the system. Historically it has been up to the 'banks/property valuers' to provide the estimated value of such family homes. You can be sure, there will be some (including financial advisers who use smart accounting' practices) who have contacts (some being insiders themselves) within these businesses who will undervalue them to stay below whatever the threshold. Just this morning, one of the CEOs of the 'big 4' banks was reported as saying that their management should not be held responsible for the culture of the organisation!! Que?! So, if this real problem can be overcome by suitable legislation, it's certainly a rational proposition to work through.
    LiveItUp
    7th Apr 2016
    1:59pm
    What do the four big banks have to do with this issue?
    Blossom
    8th Apr 2016
    10:49am
    Land Value on which rates & taxes are based is done by the Valuer Generals Dept. In some cases you are lucky to get more than the land value. A home that was worth $35,000.00 in 1980 is now worth $550,000.00. In most cases older homes are being sold for not much more than land value as the buyers are only interested in the land. It is not the fault of the owner that land prices have risen so high.
    LiveItUp
    8th Apr 2016
    11:05am
    According to Justin Bolt from Centrelink they don't use Land Value from Valuer Generals Dept to determine the value of properties as that has little to do with the true worth of a property. They ask you to value it and then if they have doubts they use their own valuers.
    4b2
    7th Apr 2016
    10:53am
    Why not bring back inheritance tax as well? This would raise a lot more revenue for the politicians to argue over how to spend tax payer's money, especially the States share.
    PlanB
    7th Apr 2016
    11:18am
    No leave the family home out of the assets --people may have been in their home many decades ago it might have been bought for a small amount -- relative to now but has increased in value -- leave the home ALONE!!!!!! Also leave the death tax out --- people have worked long and hard for their home and what they have and have also paid their *&^%$*& taxes so I say to the Government &^%$ off and learn to live in the REAL world !
    Polly Esther
    7th Apr 2016
    11:34am
    Yes, I agree Plan B
    "Tell them they're dreaming"
    TREBOR
    7th Apr 2016
    11:38am
    The thing about a family home is that you cannot simply sell it and buy another - unless you downsize. What that means is that even though a person may be sitting on a million bucks... they can't use it, and it gains them no income.

    We just sold a rural property and up-sized in house size, but at a lower value, since it is an old house and needs work.. a very rare occurrence for anyone locked into city living (unlike us).
    Blossom
    8th Apr 2016
    10:53am
    We already pay inheritance tax in the form of Probate in SA. We pay it on everything above a threshold over about $20,000.00 I can't remember the exact figure.
    Anonymous
    11th Apr 2016
    6:29am
    We pay probate in NSW also, but it's hardly an ''inheritance tax''. It's a miniscule amount.
    TREBOR
    7th Apr 2016
    11:20am
    As long as it was indexed, and was on a sliding scale of value within a suburb/area, it might have a chance. Which ever way it is approached, it is a complex issue.

    What about the current overheated market, which looks headed for a fall some time?.... as someone said recently, the only business left in Oz is the flipping of old houses, and that cannot be sustainable in the long run. (somebody gimme the kid marker from UNE to critique my use of language there, ROFL - it's an old story)..
    Tom Tank
    7th Apr 2016
    11:32am
    If this was done fairly and indexed to the growth of the housing market in the area then why not.
    It would also ne necessary to include family trusts and other tax dodging instruments as well but then I guess those who have setup such things are also enjoying the benefits of the superannuation concessions that allow them to accumulate wealth.
    Inheritance tax, or death duties, are really long overdue for re-introduction as we don't, or shouldn't be, intent on leaving our children an inheritance while living below a standard we should be enjoying.
    I think I am correct in saying we are the only developed country that doesn't have this type of tax.

    7th Apr 2016
    11:37am
    Sorry, I can't comment on this proposal - as it may affect the substantial capital-gains-tax-free win I'm making at present, on the current major renovations and additions that I'm carrying out on my lil' old $2.5M suburban cottage.

    I wouldn't like the Govt to know either, that I'm sending this email from a cruise ship in the Pacific as I take full advantage of the pensioner discount on the top-tier cruise fares!

    I mustn't forget to call my tax advisor, too, to ensure that all my income (apart from my pension, of course) is also being funnelled through that British Virgin Islands account that I set up through that lovely helpful team at Mossack Fonseca Partners.

    Rich?? Moi?? No, no, no!! I'm only a poor old pensioner! - and this is my only home, and the Govt wants to tax it!! That's outrageous!!

    I'll have to talk to my tax advisor to see if the home can be listed as an asset of that BVI corporate structure, that has a long and devious list of holding companies attached to it, that never show me as being involved as a director!

    Remember, I'm just a poor old pensioner, and I'm doing it tough!! I can show you the paperwork to prove it!!
    MICK
    7th Apr 2016
    11:44am
    See you in the Tax Shelter Aaron. We may even get to meet Malcolm Turnbull there as he uses one......clearly not because he is avoiding the Australian tax system. Yeah right!
    TREBOR
    7th Apr 2016
    1:01pm
    You know, I'm a very good surgeon.. I could help you with that tongue stuck in your cheek.....
    Fready
    7th Apr 2016
    11:40am
    It seems reasonable to me to include the value above a certain level in the assets test. The problem is that the property market differs from state to state meaning that retirees in Sydney and Melbourne would be harder hit than those in Hobart for instance. It would be too complex to have a different rate in each state.!!
    MICK
    7th Apr 2016
    11:46am
    There is probably a level ($3 million?) where taxpayers can suggest that the retiree has enough funds to invest and survive comfortably. But then rich folk who have very expensive houses almost universally have investments outside of their own home, so the argument to exclude the home for the rich is just a diversion. For average folk it is quite pertinent.
    Anonymous
    8th Apr 2016
    10:40am
    Why $3 million, when someone with a $400,000 home and $825,000 in savings can't get any pension?

    The whole system is broken. It favours people who over-invest in houses, and people who spend up big and don't save, and it punishes the kind of behaviour the government says is needed to get the country back to economic health. DUMB!
    Blossom
    8th Apr 2016
    11:04am
    Rainey, I agree with you wholeheartedly. You get nothing for what you have in savings / superuannuation, without the value of a property. Not even a Seniors Health Care Card. No wonder people are spending their money as fast as they earn it and living in Govt. housing, which I might add there is a huge waiting list for.
    miker
    7th Apr 2016
    11:48am
    No, I don't agree with including the home in pension assets testing, It may start at something like >$3m but will gradually be reduced as the burden of the pension really starts to bite.
    Find another way
    Play Fairly
    7th Apr 2016
    1:14pm
    No, I certainly don't agree with including the home in pension assets testing either.

    The Government needs to let Aged Pensioners live out their twilight years in peace. All the recent "thought bubbles" of this government, e.g. Privatising Medicare, removing bulk billing for pathology and radiology services, changes to pension asset testing, have caused a lot of angst to pensioners, some of them who are not in good health.

    I can never get over the gall of former Treasurer Joe Hockey suggesting that the aged pension age be set at 70 years. OK if your body is still sound and you want to continue to work. Everybody else would be forced to work till they drop. Do we really want these goons to carry out any of these changes? Yes, find another solution, you are certainly paid enough to do so!
    Play Fairly
    7th Apr 2016
    1:18pm
    P.S. Your car/vehicle should not be counted as an asset either. Try living in a place that has no reliable public transport.
    Anonymous
    8th Apr 2016
    8:12am
    Why should a couple with a $2 million home and $300,000 get a full pension when someone with a $400,000 home and $825,000 in savings get nothing? How is that fair?
    Blossom
    8th Apr 2016
    11:18am
    How they managing to get a full pension with $300,000.00 ??? Something strange going on it they have that much in savings.
    Maybe cars could have a limit above which it is counted as an asset. You don't need a luxury car unless maybe you are disabled and need extra space for movement (eg. legs do not bend properly or you have a swivel on your seat to help you get in and out of your car and you can't just put one foot out then the other) or carrying disabled equipment e.g. a wheelchair or special type of walking frame. Not everybody likes hatchbacks with restricted small boot space.
    Anonymous
    10th Apr 2016
    5:09pm
    Blossom, cars are counted, but at ''fire-sale disposal'' value only. And yes, from January 2017 (if not already) a couple with $300,000 can get a full pension, regardless of the value of their home. But a couple with $825,000 living in a tiny unit worth less than $200,000 can't. The system is broken. It needs throwing out and starting over.
    Retired Knowall
    11th Apr 2016
    3:18pm
    The difference is that you cant eat bricks and mortar, you cant go to wooly's and buy your groceries with 3 bricks. You are showing your ignorance and jealously.
    Anonymous
    12th Apr 2016
    10:17am
    Retired Knowall, you are the one showing your ignorance. A lot of retirees have assets they can't sell and that don't return income. Many have the same struggle to raise cash as people with valuable houses. It is just plain STUPID to give people a massive incentive to UPSIZE their home to a grand mansion in order to get a pension and not be forced to live off their meagre savings. And it's patently unfair to suggest someone with a multi-million dollar home should get a pension while someone with a modest home and some savings can't. Only someone who is benefiting unfairly from the current disastrous state of the pension system would make the accusations you make, Retired Knowall. And if you bothered to read my posts, you would see that I have repeatedly put forward a proposal that would protect home owners who need cash, but would ALSO be fair and compassionate to those with more modest homes and some other assets.
    Retired Knowall
    12th Apr 2016
    11:21am
    Yes I've read most of your posts and they are complete dribble, the only benefit I get from them is to show them to my grandson so he can see what the outcome might be if he doesn't study and educate himself to his betterment.
    You come across as a bitter and twisted person with a chronic envy obsession.
    Anonymous
    12th Apr 2016
    9:42pm
    And you, Retired ''Knowall'', come across as an uninformed, uneducated, rude and obnoxious know-nothing who trades on wild assumptions and can't put together a logical response to a sensible argument.

    Apparently you think someone who settled for a modest workers' cottage in a rural area, where their job and family were, and saved a few bob should subsidize the inheritance of kids of the privileged who inherited the family mansion or who bought in the inner city and watched the value of their home soar. Disgustingly selfish attitude!
    Anonymous
    12th Apr 2016
    9:46pm
    And again with the wild and baseless ASSUMPTIONS that make an ASS of you, Retired Knowall. I'm anything but bitter and twisted and I have nothing to be envious about. I have a great life and I am very happy with my lot. But I got what I have the hard way, having struggled to overcome hideous disadvantage and repeated crises and trauma, and I have great empathy for people who, coming from similar disadvantage, weren't able to rise above their origins. I want to see a FAIR system that encourages and rewards endeavour and responsible planning, and is economically sustainable and socially healthy, and provides the right kind of support to the genuinely needy.

    Unlike some, my objectives have nothing to do with my personal situation. They are driven by a desire to improve the state of society as a whole.
    miker
    12th Apr 2016
    10:24pm
    Retired Knowall, I think you are being a bit hard on Rainey, All of his comments whilst heartfelt, have been constructive, informative and correct
    Anonymous
    15th Apr 2016
    9:56am
    Miker, I'm not at all bothered by the comments of a classic KNOW-NOTHING who is mentally incapable of an intelligent response.
    Adrianus
    15th Apr 2016
    10:45am
    I just wasted my time reading this thread and exchange by retired Knowitall and Retired Wantitall. The system may not be entirely fair but instead of whinging, the question we should be asking is why do the opposition and those useless independents refuse to help.???
    Tilin
    7th Apr 2016
    11:49am
    Successive governments have shied away from tackling the issue of home ownership, taxation and the age pension. I think the time has come for the government to seriously look at people on aged pension residing in houses worth say > than $3 million dollars to fund their retirement from the remaining equity in the property. The taxes these people have paid (if any) have been used to pay for roads, education, health services etc and not to grow the value of their houses. Furthermore the current system is also subsidising the people who are going to inherit. Most of these people may I say are already better off than most aged pensioners with little or no assets. So it's time to demystify the sanctity of one's home and count it as an asset like anything else pass a certain threshold. Tilin
    petergrimbeek
    7th Apr 2016
    11:51am
    As our home is on a block larger than 5 acres then the excess (above 5 acres) is treated by Centrelink as an asset when calculating the age pension. This black and white rule assumes that only farmers live on such blocks, which is not the case close to the city in water catchment areas, such as ours.
    Rosscoe
    7th Apr 2016
    12:04pm
    Of course the family home should be included. I live in a retirement village as my dwelling (even tho' I don't own it) is included by CentreLink to decrease my part age pension. Otherwise it's 1 rule for pensioners and another rule for the toffier part of town. Get real! The richer are living the good life at the expense of the rest of us. I don't expect this LNP Federal Govt to govern for ALL Australians.
    Blossom
    8th Apr 2016
    11:25am
    I am in the same situation. They forget that when you leave you only get a portion of your money back. In some places you only get about 55% back if you have lived there for more than 10 years. In my case I will only get about $168,000 back out of the $299,000.00 I paid.
    babyboomer
    14th Apr 2016
    10:34am
    Geez Blossom & Rosscoe
    I didn't know this. How mean & grubby can our Govt get?
    Gunner
    7th Apr 2016
    12:48pm
    No surprise here. The introduction of the GST saw the Government with more money than they ever had in the history of the Federation...How they manage it or don't manage it is the problem. The Governments have continued to cry poor regardless of the massive amounts they are taking in. Other taxes and charges in the main were not removed as promised and we have seen a never ending demand for more cuts and taxes than ever before. It is time for good sound management of the Country's finances and that does not mean more taxes.
    TREBOR
    7th Apr 2016
    1:05pm
    Couldn't have said it better myself.... except that I also include 'user pays' and the extra savings derived via 'privatisation' of public utilities - since government retains 'user pays', which I've opposed from the outset and still do, and then has divested itself of the costs of running utilities for us by off-loading the additional costs onto the consumer - government should be doing a Scrooge McDuck and swimming in the money vault.

    Yet all we hear is how poor THEY are.... maybe they should try poor some time.....
    babyboomer
    14th Apr 2016
    10:36am
    Good points. The über-rich individuals & companies must be made to pay more fair amts of tax.
    Fobwatch
    7th Apr 2016
    12:50pm
    This is without doubt the most execrable proposal in living memory. I realize that it is in full accord with the ardent desire of "our" governments (federal, state and local) to drive most of the population into cramped penury, but to hell with them!

    All properties in Australia are grossly overvalued: no way is any house priced at $3 million worth anything like that. Pensioners must not be de-pensioned merely because governments since Malcolm Fraser have failed abysmally in their duty to ensure that an adequate supply of comfortable housing be made available to all Australians. That failure is the reason why house prices have been driven so high.

    What happens to the income-poor asset-"rich" when the housing market collapses?

    I say: No taxation except of surplus income. Anything else deprives the poor of the few assets they have worked so hard to earn, and hands those assets to the undeserving rich.

    Exacerbating this is the dereliction of duty by governments to ensure that foreign buyers who can borrow at close to zero interest NOT enter our market and compete with local citizens. The law must be changed to ensure that only those foreigners who renounce their citizenship, become Australians snd actually live in Australia for most of the year, can ever buy land here. That goes for foreign companies too. If they're desperate to come here, then they can rent.

    May the proponents of all plans to rob the poor, perish with their ill-gotten fortunes.
    Anonymous
    8th Apr 2016
    10:42am
    Then you would have opposed the changed means test, Fobwatch?
    Retired
    7th Apr 2016
    12:51pm
    I believe those who own a prime residence house of market value $ 2.5 Million or above can afford contribute in their retirement by allocating tem partial pension payments and redistribute the saved funds to those who need more to live with dignity.
    Anonymous
    8th Apr 2016
    8:14am
    I think $2.5 million is way too high. Someone with a $400,000 house and $825,000 is disqualified from pension benefits entirely, yet you can sink millions into a house and get a full pension.

    The system is broken! The solution is a threshold of total assets that does not differentiate what those assets are, and deem the rest (except assets that are genuinely unsalable and can't generate return due to some issue outside the owner's control), and means test ONLY income/deemed income - not assets. Punishing people for saving is WRONG and economically damaging.
    LiveItUp
    8th Apr 2016
    11:56am
    That is why the house being exempt is so inequitable. Agree there needs to be a threshold of total assets to be fair. People should not be disadvantaged because they have a low value home but too much in other assets.

    All the current system does is helps those who get the right advice jump through the hoops while others not party to this advice get financially punished.
    babyboomer
    14th Apr 2016
    10:39am
    Something like that could work or the 'surplus income' someone spoke of. That would mean retired Pollies & super-rich to contribute.
    Snowflake
    7th Apr 2016
    12:52pm
    If I owned a property worth three million dollars, I'm not sure how I could afford to maintain it on the pension. What with higher rates and other expenses I would be thinking there would be some money coming from elsewhere to help.
    Some older people have lived in their houses for fifty years and the value of their home has risen through no fault of their own. Should they be forced out of their family home?
    Whatever is decided I think that we will be getting the thin end of the wedge with a lot more things than counting our homes as assets. As long as we have this right wing government in power do not expect things to get any better.
    TREBOR
    7th Apr 2016
    1:07pm
    Indeed, snowflake, and the answer is that those with $3m houses don't maintain it on pension only... leading us inexorably to the question of how and why they receive pensions.
    Anonymous
    9th Apr 2016
    8:31am
    How they afford the rates? I will tell you how.

    The kids pay or help pay the rates as they know they will get the home further down the road as an inheritance.

    Personally know of many instances of this happening.
    Snowflake
    7th Apr 2016
    12:54pm
    Why don't we just get rid of states governments, that would make us a richer nation. They Re a complete and utter waste of time, money and resources.
    Rosret
    7th Apr 2016
    1:01pm
    How does someone with a $3m home afford to maintain it on a pension? The last thing I would want is for someone to have to move out of their family home. However perhaps there could be an equity loan against the value of the home that is payable on the death of the last partner. That still may have a devasting affect on family members who have been living in the house because they cannot afford to buy into the marketplace in this current climate. - For example -farmers.
    Rosret
    7th Apr 2016
    1:03pm
    ...and would the cost of valuing everyone's property and all the resulting paperwork actually be worth the cost?
    tams
    7th Apr 2016
    1:02pm
    The comments are starting to swing towards including the family home.
    Let's look at the current tax payers contributing to the Government revenue. They are our children and grandchildren who are contributing a part of their earnings to taxation.
    Do you want your children and grandchildren using their earnings to pay a pension to a retiree owning a house valued at $2.5m plus. I don't think so
    Rosret
    7th Apr 2016
    1:07pm
    That inheritance is often the children's super fund so be careful what you wish for. Once the tax change is in your house value will skyrocket over the years and you'll find yourself homeless because you will be forced to sell. Last time they tried this it caused untold heartache.
    John
    7th Apr 2016
    1:02pm
    How to save the The taxpayers money stop taking free flight see you business class stocktaking retirement of $118,000-$250,000 a year and stop living off the taxpayers in the symbol leeches
    Gra
    8th Apr 2016
    6:00pm
    Can we have that in English please??
    babyboomer
    14th Apr 2016
    10:45am
    Ha ha Gra. I feel extra-angry about all the perks they have voted in for themselves too. I was self-employed, high earner, saved, made careful financial plans for my old age & now I can get no pension gold card nothing. I am on the edge financially but get no Govt assistance in spite of the big taxes I paid. I feel resentment about this.
    Brissiegirl
    7th Apr 2016
    1:20pm
    I'm puzzled. So many contributors disparaging "the rich" and the "toffy". At what exact level do people acquire rich or toffy status? Is there some sort of measurement? If people are as rich and toffy as the green-eyed monsters complain about, then they will be funding their own retirements. So why would anyone who is living in a house that has risen in value be rich or toffy? All real estate increases in value, just as any other commodity so why just pick on people because they love their family home, they enjoy where it is and don't want to leave. Moving home is very high on the scale of mental health stressors, especially for mature age people. Just leave the family home alone. It is a hard-earned sanctuary not only to the owners but perhaps for their extended family in times of need. Why no criticism of people who, at the end of the preservation period, cash in their superannuation in a lump sum (money intended to subsidise or replace a government pension), spend up big on holidays, then come back and claim a government pension? Why bother with all the stress of paying off a house, paying rates and taxes on it, maintenance, insurance if it's going to be "taxed" again. Easier and simpler to rent privately (private rental way too expensive when pension time comes around) or apply for cheap taxpayer-funded housing. That's just robbing Peter to pay Paul while removing the incentive for people to pay for and provide their own lifetime housing.
    TREBOR
    7th Apr 2016
    7:21pm
    The trouble with all that is that many such do not fund their own retirement, but also draw on the public purse - for the simple reason that they are in a position to take advantage of tax shelters not available to others. through trusts and such.

    The simplest answer is to pay everyone a full pension, tax income above that by the normal standards, ensure that trusts etc are paying their way properly and are not havens, and leave the family home out of it unless it is incurring income.
    Rosret
    10th Apr 2016
    8:48am
    I agree with TREBOR. Everyone should be paid a pension regardless. It would be factored from the beginning of your working life. That would protect hard earned assests and parents giving all their money to their children and then living in poverty.
    In Wollongong a house at $350K in 2007 now has an asking price of $600+ with no improvements. That's 9 years. How do you think pensioners in inner Sydney will be by 2026 if the asset test is introduced.
    babyboomer
    14th Apr 2016
    10:46am
    Hmm. Your 'simplest' plan is interesting.
    maelcolium
    7th Apr 2016
    1:39pm
    The revelations of Oilon and Panama Papers has revealed that the top echelon of wealthy have at their disposal the means to hide their wealth to avoid taxes. When this has been fixed we can have a discussion. Until then the unequivocal answer should be NO.
    Gra
    8th Apr 2016
    6:01pm
    Nothing new about this. Most of us have been aware of the top end of town dodging their tax liabilities like this for years.
    Chris B T
    7th Apr 2016
    1:57pm
    Your "Castle" will have many differing values, sentimental, monetary etc.
    Setting accesible levels will be to high/to low no pleasing everyone.
    My sugestion is all home owners are accesible when receiving age pension, when on death the amount is recovered from the estate. When joint or incommon when the property is sold or last owner. Then repay all Pension Received from estate as first receiver. Probate will dictate order. (This could include unrecovered HECC's as well.)
    Before the Howls and Crys.
    My daughter was involved in a nasty vechile accident layed up in hospital for months followed by rehabilation.
    When she finally received compensation, All Medical Cost's including Ambulancce transferr's by road and air. Sickness benefits to centerlink and future cost where Deductted.
    Then solicitor's fee came out before receiving any monetary compansation.
    This sort of recovery of fee's is normal form payouts or estates in other areas.
    The only disadvantged would be beneficiares. SAD
    I do own a dewelling.
    TREBOR
    7th Apr 2016
    7:24pm
    All well and good if included in that is the Social Security component of taxation, indexed, which is yours for free in return for paying into the funds for your future.

    And, no - I will entertain no arguments that the Social Security Component no longer exists simply because it was absorbed into consolidated revenue and then misused.
    LiveItUp
    7th Apr 2016
    2:09pm
    I agree the house should be included in the pensioner assets test as it is the most inequitable part of the pension system.
    TREBOR
    7th Apr 2016
    10:47pm
    Expand on your basic theme..... HOW is it inequitable... exactly what effect would including it as asset have?
    Anonymous
    8th Apr 2016
    8:19am
    Trebor, I would have thought the answer obvious! A couple with a $2.5 million home and $300,000 can get a full pension. A couple with a $200,000 home and $825,000 (very much poorer) gets nothing.

    There is a massive incentive, currently, for retirees with other assets to sell their modest home and buy a multi-million dollar mansion so they qualify for a pension.
    LiveItUp
    8th Apr 2016
    9:42am
    Rainey I know of many people who have done just that. They then tell their kids that the house will be theirs one day but if they want it then they have to pay all the outgoings on the house. The old car is then registered in the pensioner's name and the expensive new Merc is registered in the son's name.

    The full age pension is then used to fill that bucket list.
    Annie
    8th Apr 2016
    10:35am
    Rainey I agree totally.
    miker
    8th Apr 2016
    1:35pm
    Rainey, Where is this $200,000 home, in the middle of the Simpson Desert?
    With $825,000 savings, you don't need the pension, all up this person is still a Millionaire, lucky indeed.
    If the wolves start biting at the >$2m or $3m homes, where will it end?
    Successive Budgets will keep reducing the Threshold, you know they always take the easy way out?
    Leave the damn house alone, find another way
    We should be probing the 'Pollie Pension' more, how much will Bronwyn Bishop retire on per year?
    Anonymous
    9th Apr 2016
    8:37am
    The point is that people "do not" want to use their own money to fund their retirement.
    They want the pension and "structure" their assets accordingly to access it.
    To say otherwise is ridiculous as I am sure there are many on here who do exactly that.
    How many have been to financial advisors who tell them to go on an expensive overseas holiday, buy a caravan and four wheel drive etc.
    I did not come down in the last shower
    miker
    9th Apr 2016
    11:59am
    Radish, Agree with what you write re structuring assets to best facilitate access to the pension. The question at hand though deals with the actual asset collation, is the house in or out?

    My stance is that they should keep their grubby hands off our homes irrespective of how much the house is worth. If it is to passed on down to our debt ridden youngsters, whats wrong with that?
    Anonymous
    10th Apr 2016
    5:15pm
    Miker, I see nothing wrong with passing your house down to your ''debt ridden'' youngsters, but why shouldn't someone with a more modest home pass their PERSONAL SAVINGS down to their debt-ridden youngsters or disabled grandchildren, ESPECIALLY if those savings were accumulated without tax advantage, by going without holidays and restaurant dinners, etc.

    It's is selfish in the extreme to suggest the rich home owner should be favoured over the battling saver, and I find yours and Radish's comments in this regard highly offensive and self-serving.

    And if you bothered to do the math, you would discover the $825,000 in the hands of a 65-year-old couple is NOT enough to fund a moderately comfortable retirement - not even close! If they happen to have special needs - disability aids, home help, expensive health care, etc., they may be really struggling. Yet according to your logic, they should subsidize the inheritance of kids of millionaire home-owners?

    There are plenty of homes in rural areas worth as little as $200,000. Obviously you are big on ASSUMPTIONS and very scant on fact and fairness.
    Retired Knowall
    11th Apr 2016
    3:22pm
    So it's OK for the Tax Payer to fund your retirement so you can leave something to you relatives?
    Anonymous
    12th Apr 2016
    10:26am
    If I go without restaurant dinners and costly holidays to save to leave something to my disabled grandson, I should not be denied the same benefits as those who spent freely and those who invested in expensive housing to circumvent the means test, Retired Knowall. It's about fairness. Obviously, you don't care for fairness - only for your own self-interest.

    It's just as OK for the taxpayer to fund my retirement as it is to fund the retirement of folk who own flash houses, gift money to their kids before turning 60, or spend their $500,000 inheritance cruising the world. The current attitude of ''you saved, so hand it over to give to folk who didn't'' is Communism at its worst.
    Anonymous
    13th Apr 2016
    11:32am
    I have never said the rich home owner should be favoured over the battler NEVER!

    I think the opposite............ those who can look after themselves should and the pension should be there to look after those who cannot!

    What on earth is wrong with that?
    Anonymous
    13th Apr 2016
    3:32pm
    What's wrong with it, Radish, is that it's a nice theory that can never be implemented in practice. Who decides need, and how? Who polices greed? X has a spouse who need $500 worth of medications per month and disability aids, and their health means they need a cleaner and yard maintenance man because they can't do much themselves. Are they automatically LESS needy than Y because they have $50,000 more in the bank, when Y's living costs are $1000 a month less? Z has a $1.2 million home and $400,000 in savings. Is he more or less needy than A, who has a $400,000 home and $825,000 in savings?

    The system is unfair, expensive, cumbersome, and unsustainable precisely BECAUSE people pursued the goal you describe, but nobody knows how to achieve it. Certainly the current system doesn't even go close, and nothing anyone has suggested thus far, other than perhaps a fixed pension for all and equity through taxation, goes even close to improving it.
    babyboomer
    14th Apr 2016
    10:50am
    That family is crafty Bonney. Hope they all continue to trust & get along. Merc registered to the son. I love it.
    Anonymous
    28th Sep 2016
    3:35pm
    Sorry, I find what you are saying confusing Rainey.
    Blondie
    7th Apr 2016
    2:47pm
    "Dollars over Respect":how right you are!Now that the wealthy have been exposed even further, socking away their wealth in tax havens, it is astounding to me that people feel the need to hide mega wealth, rather than pay their fair share of tax! Perhaps they want to do this for their children, grandkid's, but what is writ large, is GREED!! Gina Rhinehart's legal case against her own flesh and blood, displays a narcissistic psychotic attitude towards wealth.....try cuddling up, and spooning in bed at night, Gina, to a slab of $100 bills!
    I would be happy if homes above $2 million knocked you off the pension. ????
    floss
    7th Apr 2016
    2:51pm
    Yes must agree Mick, you have said it all.
    Fredklaus
    7th Apr 2016
    3:10pm
    Give everyone a age pension,stop subsidising super .get rid of centreline staff and the cost of policeing and the GOVT will have heaps left over to pay down the DEBT.APPROX 20 Billion i believe!!!!!!
    Anonymous
    13th Apr 2016
    6:16pm
    It would be totally unaffordable to give everyone the Aged Pension.
    Anonymous
    14th Apr 2016
    11:36am
    Would it, Radish? I doubt it, actually. If the tax system were sensibly revised, it might work out more affordable. Consider, for a start, the extra money in circulation generating more GST revenue, business growth and profits - thus higher income tax and more jobs and less dole money and more income tax from the now employed generating yet more spending that generates more GST and more business growth... and on and on it goes. And meanwhile if the retired well-to-do were paying fair taxes and the absurd super rebates were revised as has been recommended, we might find the nation way in front.
    melaleuca
    7th Apr 2016
    3:30pm
    No, I do not agree with including the family home as an asset. Due to recent sharp rises in property/land values in our neighbourhood, our home of 40 years has become worth a great deal more.The writer of this article need to look at another article 'Asset-rich but living in poverty' before making assumptions about the correspondence between a high priced family home and income. We have a part pension and a very modest super to live off for the next 20-30 years. Using equity means placing ourselves in debt. Like many pensioners, we intend to stay in our home as long as possible. Our home is the only resource we will have left if or when we need to move into a retirement home.
    Anonymous
    11th Apr 2016
    6:37am
    Melaleuca, I partly agree with you, but why should someone with a $2 million home and minimal savings get a pension when someone with a $200,000 home and $825,000 in savings can't? Do we really want to encourage all retirees to sell up and sink all their money into expensive houses in order to escape a grossly unfair means test?

    We need to restructure the system so that the family home IS counted, but there is no assets test at all - only an income test that includes DEEMED income on all assets (including the family home) above a generous threshold. That would introduce fairness and equity, simplify the system, remove incentives to detrimental behaviour, and still protect homeowner pensioners.
    Retired Knowall
    11th Apr 2016
    3:23pm
    Who in their right mind would buy an expensive house just to get the pension? Oh thats right ... you.
    Anonymous
    12th Apr 2016
    10:22am
    You are quick to make ill-informed and very rude and offensive ASSUMPTIONS Retired Knowall, but slow to read and consider a logical argument that doesn't suit your purposes.

    ASSUMPTIONS make you an ASS, and that last comment shows that you are a very large ASS.
    melaleuca
    7th Apr 2016
    3:30pm
    No, I do not agree with including the family home as an asset. Due to recent sharp rises in property/land values in our neighbourhood, our home of 40 years has become worth a great deal more.The writer of this article need to look at another article 'Asset-rich but living in poverty' before making assumptions about the correspondence between a high priced family home and income. We have a part pension and a very modest super to live off for the next 20-30 years. Using equity means placing ourselves in debt. Like many pensioners, we intend to stay in our home as long as possible. Our home is the only resource we will have left if or when we need to move into a retirement home.
    Anonymous
    8th Apr 2016
    8:16am
    But why should you get a pension when someone less fortunate, whose home didn't rise as much in value, can't because they saved $825,000?

    There is an inherent unfairness that WILL NOT be solved by means testing the family home, but can only be solved by throwing out the entire system and rebuilding from the ground up in a way that is fair and economically sensible.
    Annie
    8th Apr 2016
    10:45am
    Rainey I totally agree, again. I know of people who had to purchase in less affluent areas of cities whose home has only increased minimally over the years. This is also the case for many people who live in country towns where employment declines and the house values also decline.
    Annie
    7th Apr 2016
    3:42pm
    Agreed. At present people who are socially responsible and who have downsized and moved into smaller homes, retirement villages, or motor homes to release the equity in their family homes are penalized. As they have their assets in cash/superannuation they are called "rich" and not entitled to many or any of the government benefits. By doing this they have often released property in the inner city living suburbs and opened them up for purchase by families, they also utilize less energy etc. due to downsizing which in turns helps support the environment. By releasing their equity they also are using their own money and assets which in turn enables the younger generation not to have to pay as much of their tax portion on supporting asset rich people who collect part pensions. It also enables the government to utilize their money to support those with far greater needs e.g. the severe disabled. Superannuation should not be taxed. Most people with this fund paid tax on their earnings and again tax when they accessed their superannuation which was paid on any interest earnt. The asset limit should be raised but it should also include all assets including the family home. It is inequitable for those people that have taken the socially responsible action to downsize to have to use up their children's inheritance while those that remain asset rich can maintain, preserve and even increase the value of their children's inheritance, while cash rich people have to decrease this asset. It is inequitable.
    Rosret
    10th Apr 2016
    8:58am
    People imagine the rich are on the pension. People shouldn't have to move into a living coffin in some suburb away from family friends and their infrastructure of hospitals, trains, shops in walking distance. (Remember everyone wants the elderly off the roads as well). They worked all their lives for what they have and have every right to keep it. Its not the young moving in - they can wait like we all had to. Its the property developers - China. So be careful what you think you are giving away to "the young" - you may actually be giving away your country.
    Sometimes these expensive houses do have the younger family residing in the house while their Mum or Dad has the back room. - are you going to take away ALL their freedoms?
    Anonymous
    12th Apr 2016
    10:37am
    Rosret, a sensible government would introduce a logical and fair system of assessing means, instead of the totally illogical, economically unsustainable, and socially divisive system we have now.
    The family home SHOULD be included same as all other assets, but there should be a very generous threshold, and anyone who owns any non-returning assets that they can't sell should be extended a loan on concessional terms.
    Currently, we have freedom ONLY to rort the system by over-investing in houses, giving money away before turning 60, or cheating. That's DUMB!
    A simpler and fairer system would ease the housing crisis, reduce total pension costs, and remove incentives for economically damaging behaviour.

    7th Apr 2016
    3:44pm
    The assets test should be abolished and replaced with an income/deemed income means test that includes deemed income on all assets, including the family home, but with a relatively high unassessed threshold. That would remove the existing massive unfairness in the system, be more economically sustainable, and deliver sensible incentives for saving and investing instead of pushing people to over-invest in housing. For those with significant wealth in their home and very little else, a loan scheme can give them money to live, repaid from their estate.

    $2.5 or $3 million is way too high to restore fairness given the harshness of the assets test, and will not create a viable incentive for people to stop over-investing in property. Nor, I imagine, would it reduce pension costs much because I doubt there are a lot of pensioners with homes valued at more than $2.5 million. There are many, however, who have locked up $1.5 million in a house in order to dodge the assets test, and the challenge for the government is to address that without creating unfair hardship for others.

    Abolishing the assets test in favour of a fair income/deemed income test with a loan for anyone heavily invested in the family home and having little else would go a long way to improve fairness and would be much more economically sustainable, restoring incentives to work and save.
    Annie
    8th Apr 2016
    10:36am
    Agree.
    Dot
    7th Apr 2016
    4:20pm
    I want to see all hell break loose if the Government includes our family home in an asset test.
    The time has come for all free loaders like refugees, single mothers who have babies as cash cows, all those who have not contribute one cent to this country strip of all welfare.
    All foreign aid dismissed at once, let each country take care of their own.
    All Politicians cease travelling and use the internet as communications.
    One could go on and on.
    LiveItUp
    7th Apr 2016
    5:15pm
    It is only a matter of time before the house is included in the assets test.

    Welfare in Australia has nothing to do with what one contributes but who can jump through the hoops to get it. Clever people organise their affairs so they can jump through those hoops. Unfortunately they may get away with it for awhile but as that knowledge becomes known and used more then the rules have to be changed.

    People in Australia today have a welfare mentality so why get a job if you can live without doing any work?
    TREBOR
    7th Apr 2016
    10:50pm
    You're on the money, Bonny - now follow through on your reasoning.

    Just last night on **coughs** national TV, someone said that just because it is now 'legal' to circumvent tax etc... that is showing that the current laws need to be changed.

    So... if someone can no jump through the hoops and get a pension even though they are flush.... what needs to change?

    You are becoming perilously close to what you claim to despise... some 'socialist' left-leaning advocate of a fair go for all on a level playing field......

    Just saying....
    TREBOR
    7th Apr 2016
    10:51pm
    that's "NOW jump through the hoops".. damn you finger that writ....
    LiveItUp
    8th Apr 2016
    9:54am
    I'm all for a fair go for all. I'm also concerned that Australia is going backwards fast because people are getting lazy and the system is making this worse. Now wonder people are getting so obese.

    It seems to me unless you are on the age pension you are no longer accepted by others. There are only so many times you can say you left your pension card at home. This mentality is completely stupid and the sign of a welfare society.
    PlanB
    8th Apr 2016
    11:28am
    Yes Dot it would be time for a revolution if the family home was brought into the assets -- makes you wonder wHY the hell we worked so hard and long when we would never really own our home.

    Let them come down on the women that have kids as cash cows and the likes
    LiveItUp
    8th Apr 2016
    1:48pm
    What if it transpires that most people would be better off if the house was included in the assets test? Will there still be a revolution?
    Rodent
    7th Apr 2016
    5:45pm
    Before I comment further in some detail, have all the contributors to this post actually read the material that you are commenting on? I doubt that all have. Also its not just this Doc, there are many others that put up ill conceived thoughts.

    Attempting to include a partial $ amount of the Home Asset value will only distort further the differences in Pension paid for Home Owners verses Non Homeowners, or in its simple form Non homeowners will continue to get more, and Home owners will get less.
    The figure quoted in doc is about 10% less
    This bias in thinking towards Non Homeowners might give rise to some thinking they should put their house ownership in their Childrens name as a Trust, become a Non home Owner, pay Rent, and still get a higher pension.



    Extract quote --
    However, the overriding concern is to enhance fairness and equity in the pension system. The current means test is poorly targeted as it does not differentiate between retirees with large disparities in home asset wealth. The home’s exempt status also creates a distortion between home owners and non-owners. For full-rate pensioners, homeowners have more than nine times the net worth of non-homeowners21. The Productivity Commission found that older renting households are disproportionately likely to be experiencing housing affordability stress with rent payments taking up more than 30% of household gross income22.
    An option for future consideration is to make the value of the family home above a specified amount subject to the Age pension means test. The figure would be a matter for government determination and preferably indexed. Only homeowners with equity above the specified cap would have part of their equity counted towards the Age pension means test. The non-exempt equity would be treated the same as other financial assets. The expectation is that the specified limit would only impact a minority of pension recipients (e.g. <10%). Reasonable transitional arrangements and recognition of regional differences in housing values would be required for implementation. Determining these arrangements would be difficult and complex and would need community acceptance.
    Anonymous
    11th Apr 2016
    6:32am
    The proposal is all wrong. It won't address any ''disparity'' effectively. The whole system is insanely unfair, inefficient, expensive to operate, and economically detrimental. It needs throwing out and revising from the ground up.

    Either there should be a universal pension and tax on all retirement income, OR there should be an income test only but ALL assets INCLUDING the family home included in deemed income, with a very generous threshold.
    Brissiegirl
    7th Apr 2016
    7:15pm
    There is a democratic choice as to how people spend their disposable income. Some people (group A) might spend all their money paying rent and on expensive holidays, cars, alcohol, clothes etc. subsequently qualifying for a pension and rent assistance in later life, while others (group B) might choose to spend the bulk of their disposable income paying off a house. I don't see why those who chose to pay off a house, going without the luxuries enjoyed by group A, should be assessed as having too much equity in their home to receive the same pension as group (A), who lived large and in the moment. That suggestion discriminates against those who chose to provide their own accommodation for later life. It just seems ridiculous to advocate that some types of spending over decades would not pension-assessable, but a a paid-for home should be.
    TREBOR
    7th Apr 2016
    7:33pm
    Would that life were as simple as that - a neat divide between lifters and leaners - there are countless life scenarios that would lead to a person needing a pension to live on in retirement.

    Ask any divorced person..... as an example.
    Anonymous
    8th Apr 2016
    10:38am
    Brissiegirl, I agree, but why are those who chose to save a little more and accept modest accommodation discriminated against?

    The existing system favours those with expensive homes, so if someone chooses to live in a $400,000 home and save $825,000, they are punished harshly, but if they choose to live in a $2.5 million home and save $300,000, they are rewarded with a full pension PLUS benefits, even thought they are way more than twice as rich.
    Annie
    8th Apr 2016
    10:42am
    Also those that have downsized and released their capital are currently being discriminated against for being socially responsible and they cost the government and environment less in pensions and rebates.
    Rosret
    10th Apr 2016
    9:08am
    So Annie, neither the person with the assets in the bank nor the home should be discriminated against. There should be a base rate pension for everyone and to live a reasonable life the individual should save and be innovative - not devious so they can qualify for some funding.
    Annie
    10th Apr 2016
    10:41am
    Roster. I agree wether you have your money in a home, superannuation, shares, bank etc the government should treat all equally. Those that took shares out in the 60s have had increases just like homes. One is counted in the asset test and the other is not. No one is making people move, just that how people have saved and invested over the years etc should not make a difference to how they are treated by governments and the benefits they can receive.
    FM
    8th Apr 2016
    5:28am
    Give it a rest Kaye. Australia is the only country that proposes something as appalling as pushing old age pensioners out of their homes. We are truly backward and going further back every day. Perhaps you could advocate getting started on workhouses for seniors when the money from their homes runs out.
    Rosret
    10th Apr 2016
    9:09am
    Its called New Start - they have.
    In Outer Orbit
    8th Apr 2016
    6:22am
    Asset tests? Property value thresholds? And all the sneeky little ways some people will try to wriggle around them? These are all choices reflecting arbitrary and misguided policies.

    I say scrap the whole lot and retrench the geniuses that thought them up. Save all the cost of management. What I suggest is, give a very basic state pension to everyone, ie no tests, no thresholds, no fiddles necessary or purposeful, no cheating possible. If you want more than that, look to your own working life choices, your super and any other investments, property or otherwise. Who cares how individuals choose to store any spare wealth, it's all just bucks in the end, so to count one kind but not another is plain dumb.

    A flat rate pension for all is a very simple system that works fine in many other countries so why waste all this time and energy squabbling over the details of what has become a completely unworkable, unsustainable and horribly unfair policy misadventure. Back to the drawing board and this time keep it simple.

    Many people contemplating change are resistant out of fear that they might come out in the losing camp. As things stand, everyone is losing, including the asset rich income poor. Only the uber rich and the crooks have anything to fear from a fair system.
    MD
    8th Apr 2016
    8:50am
    Far, far too simple 'In Outer Orbit'.

    At least it would be for all the whingers, whiners, back-biters and what-about me's.
    In the extreme scenario and were your ideal to gain preliminary acceptance it would then pass to the relevant Govt Dept, presumably for implementation. Then we'll all stand-by and watch the entire procedure churn to yet another Public Service stuff-up.

    And yes, I am known as something of a cynic but I feel a visitation from the man from mars is far likelier. I am indeed envious; you already being out there, will get to trade star bucks before me.
    Blossom
    8th Apr 2016
    10:57am
    We are already being taxed twice if we save any money from wages.
    There is tax deducted from our wages, and we are taxed on the interest we earn from it. In that respect we are paying 2 lots of tax. Let the Govt. show us their ENTIRE budget and where the misc. expenses are. If there was less waste, less perks the Govt. would probably have millions to inject into services that are needed.
    Tassie
    8th Apr 2016
    11:25am
    Our homes definitely should be exempt..however there should be included if they are over 2 million ..just saying..
    PlanB
    8th Apr 2016
    11:29am
    Leave the family home OUT
    Anonymous
    11th Apr 2016
    6:43am
    Yes, PlanB, let millionaires with flash homes keep getting the pension while battling savers are excluded. Give all pensioners a huge incentive to upsize to multi-million-dollar mansions so they get a pension. Good logic!
    Rodent
    8th Apr 2016
    11:29am
    Here is a silly example of including the FULL VALUE of the home in the assets test(as has been proposed in some articles) - Todays reality - A HOME OWNING COUPLE has a house valued at $450K, and other assets of $250k ,Centrelink counts only the $250k and as at
    March 2016 their Pension would be approx. $33716, just short of max . As at Jan 2017 that $250k for the HOC will produce the same Pension amount.

    If however you now include the Home value of $450k making a total of $700k for Centrelink to count the Pension paid as at March 2016 will be $18320, BUT come Jan 2017 this drops to $8902.

    Compare this to what happens to the NON HOME OWNING COUPLE with $700k of Assets as at March 2016 their pension is $24131 and as at Jan 2017 this actually increases to be $24502

    Conclusion Was it far in THIS EXAMPLE to include the Home in the Centrelink calculations, especially after Jan 2017 - COMPARED to a NON HOME OWNING Couple with the same $700k ANSWER IS OF COURSE NOT
    LiveItUp
    8th Apr 2016
    11:46am
    Your calculations make no sense to me.

    Obviously both couples would be treated the same with the same asset test as there would be no distinction between home owning and non home owing couples because the home is now treated as an asset.
    Rodent
    8th Apr 2016
    1:03pm
    Hi Bonny

    Thought you might comment . Firstly, the Calculations in this EXAMPLE are CORRECT, but you are of course PARTIALLY correct in your comments. I did say it was a silly example based on current reality. But if it were to happen then how would they determine the correct amount to be paid as a Pension, and why would this be based on the $700k for a Non Home Owning Couple, why not a LESSER amount based on the current rates tables.

    What they would do is ARRANGE an the outcome to be so that everybody on a specific figure got the same $ amount, (your point, I agree) which of course would be at LESS cost to the Govt

    Just think laterally about what could happen- first principle - to LOWER the Pension cost to Govt, by whatever means possible, ie Reduce Numbers, or Reduce $ paid or a combination of both
    LiveItUp
    8th Apr 2016
    1:43pm
    No matter who is in government we are going to see big changes to the pension and superannuation. These changes will help some people and disadvantage others. I've had lots of advise from various advisors on what one should do just in case. However the bottom line is all this stuff comes with strings that I personally don't like.

    Paying less tax might be good in theory but if it takes away the ability to do what you want with your money is it really worth it.

    None of us would want our super nationalised but would rather we had a say it what happens to it after we die.
    cdbstock
    8th Apr 2016
    3:03pm
    Blossom but there are solutions:
    Annual valuations by the VG in each State/Territory do not include 'improvements' such as the house on it No, it's not the fault of the owner/occupier that the value has risen abnormally. The owner/occupier (not many in this league) has the option of 'cashing-in' on the 'windfall' value of the house. I'm in favour of the VG issuing 'total' valuations' to be used by Centrelink - any owner occupier of a sole residence valued over $1M (indexed by CPI) should be asset assessed on that amount over $1M (as indexed).
    It's ridiculous that an asset-rich person should have access to a part pension
    Christopher
    8th Apr 2016
    3:04pm
    they must be dreaming
    DaveL
    9th Apr 2016
    8:29am
    Enlish PM Cameron lifted the threshold on inheritance tax on the family home to one million pounds (about A$2,200,000) last July. He did not see this figure a excessive.
    In Outer Orbit
    11th Apr 2016
    6:53pm
    No - the total inheritance tax for a couple already stood at £650,000, and after the changes being gradually introduced to 2020 this will increase to £1million INCLUDING the family home (ie it's not just the family home, it is the entire estate or assets).

    So this amount is between TWO people, owning their own home, which adds an extra £350,000 joint allowance vs two people who don't own their own home.

    Where is the fairness in that vs someone who has chosen to be a renter? The have nots are being penalised yet again.
    PlanB
    9th Apr 2016
    8:33am
    Strange how all countries seem to be doing the same things at the same time --Globalisation!?
    Rosret
    10th Apr 2016
    9:01am
    Its weird isn't it. No original thought. Do you realise that's why our poor kids do NAPLAN tests - just to compare our children with other nations. Crazy huh.
    PS They didn't pick up on giving everyone the pension like the States and Great Britain though you notice.
    PlanB
    11th Apr 2016
    5:34am
    Rosret, there was some talk abut paying everyone here a pension.
    DaveL
    9th Apr 2016
    8:34am
    No I do not agree. Where people have lived in their family hpme fpr 40-50 year, the value is tied up in land. Value the house perhaps, but why should they move if they can still care for themselves.
    Rosret
    10th Apr 2016
    9:02am
    Exactly!
    Annie
    10th Apr 2016
    9:20am
    Nobody is asking anyone to move. However assets should be treated equally and those that have chosen to downsize should not be penalised as they currently are, when they free up equity in the family home etc.. Options are available that allows people to stay in their own home while utilising the equity.
    Annie
    10th Apr 2016
    9:32am
    I would question how many people live in million dollar plus houses across the whole of this country. People state that the homes have increased in value since they purchased, some have decreased. This increase is no different to interest earns on shares and other investment types which are currently taken into consideration for Centrelink payments. The issue is the inequity of those that choose to live in their own homes and collect even a full pension compared to those that have chosen to downsize and released cash from their equity or family home and can access no or minimal Centrelink benefits. This is the inequity that has to be addressed. There are also those that have made lifestyle choices throughout their life and spent their monies by travelling etc.,whilst others are buying property and sending their money back overseas and intend to return their to retire and take their superannuation etc with them at the end of their working careers in this country. Other have saved towards their retirement so that they can reach at least a comfortable standard of living based on government figures, and yet it is these savers and downsizes of property that are currently being discriminated against.
    Billy
    10th Apr 2016
    9:24pm
    As far as I am concerned every house should be included in the asset test. In that way everyone comes under the same scrutiny including cash, super, property. including the car, home contents. investment property etc. I am on a part pension/part super payout. but I am no better off because my super is an asset and thus the part pension balances out to being on a full pension, so what's the benefit. Absolutely Nothing I might as well blow all my super on good holidays and be on the full pension just like those that have never worked.
    PlanB
    11th Apr 2016
    5:39am
    Billy everything except the house IS include din the assets test -- easy to see which people HAVE NOT WORKED LONG AND HARD TO OWN THEIR OWN HOME!
    Anonymous
    11th Apr 2016
    6:40am
    Billy is right, PlanB. The system is unfair and economically unsustainable. Of course the house should be included in the test. Lots of folk worked hard to own a modest home, but they are discriminated against in favour of those who buy a lavish home.

    The assets test should be abolished completely and replaced with an income only test that includes deemed income on ALL assets, but applies a generous threshold. That would be fairer, easier to administer, more cost efficient, and would eliminate incentives to cheat by plunging wealth into expensive housing.
    Annie
    11th Apr 2016
    8:43am
    PlanB Rainey is correct. People work hard often on low wages to save long and hard for a home they can just afford. The family homes should be included in a far more generous asset test. The reason is why should the person who has saved long and hard and put their money into super or other assets be penalised as they are now, and be expected to use up all their long hard savings and going without while the million dollar plus home owners are in the position to collect a full pension. It is blatant discrimination.
    PlanB
    11th Apr 2016
    9:09am
    Annie, I was one the saved and worked long and hard, to live where I wanted to when I retired or was able to get a job here in the new area, there was NO supper when I worked. I have been in my home for 40 decades and it is worth more now than when I bought it, as it should be.
    I have also spend money to upkeep it plus rates and the stamp duty when I bought it

    What would one consider a house value to be in the assets test?

    Homes are very expensive these days.
    Annie
    11th Apr 2016
    10:02am
    PlanB so has every one else saved hard and made choices and had to care for their home etc. However those that have gone without for even 50 years and saved should not be discriminated against by government decisions just because they chose to increase their asset levels through cash or other investments over someone who has chosen to increase their assets through staying in the family home and area they live in. In some city and country areas the family home value has dropped and does not even cover the mortgage on it if sold. Just because one has cash and the other a house means they are both worth the same value and both would like to have the ability to maybe leave to children. At present the person with cash type investments, antiques etc, are being told to live off their money and not access government benefits, while the person in their home can keep it, give it away and live off government benefits. This is blatant discrimination against a group of people that for whatever reason chose different pathways but who all end up with the same nett worth. All of the family home should be included. To answer another part of your question...maybe an asset base of a total worth of 1.5-2 million dollars before pension is affected. They keep talking about amounts over a million for a cut off point for housing. Why not a total simplified test based on government valuations for rates etc.
    Anonymous
    12th Apr 2016
    10:31am
    PlanB, your statement ''I was the one...'' suggest a very egocentric viewpoint. I was ALSO one of those who worked damn hard and long to live where I wanted to when I retired, and to save a little nest egg as well. I didn't have super either. I chose a modest home so I could invest some money and afford a lifestyle a little better than that pensioners have to settle for. But according to your logic, I should have to hand my hard-won savings to the taxpayer, and give up all the benefits I saved to attain, so you can keep your more expensive home. Goodness, what an astonishing proposal!!!
    Annie
    12th Apr 2016
    10:44am
    Rainey spot on.
    PlanB
    13th Apr 2016
    2:48pm
    Rainy, sorry if my post came out wrong -- I just re read it and it did not sound how I meant it to be.

    I was saying that I worked long and hard to try and move to where I wanted to be -- and had to wait till I could get work in the new area.
    No there was no super when I worked.

    I have been here for near 40 years now and yes the home has got up in value as I am sure every home should do.

    Rainy I did not see where I said that you should hand your hard earned savings to the tax payer?
    PlanB
    13th Apr 2016
    2:54pm
    Honest I would be the least egocentric person. I apologise if I came over that way --as I deplore people that are
    Anonymous
    14th Apr 2016
    11:44am
    Plan B, thanks for your apology, and I'm sure you are a very nice person - but one who fails to see the logic of the argument. I understand your attachment to your home, and I'd be the last to want you compelled to sell it or in any way hurt for owning it. But because my home isn't as valuable, but I chose to save for my retirement and invest in other assets that I hoped would return a good income - but DON'T - I am now forced to forego a pension and hand my savings to the taxpayer to benefit people with much grander homes, and much higher net wealth than I could ever hope for. But because their expensive home is exempt from the assets test, they can keep their wealth and get a pension, and eventually pass their wealth to their kids, whereas I have to live on my savings and deprive my kids.

    How is that fair or acceptable? A person like you, who is not at all egocentric, would surely see that the existing system is wrong?

    By including the family home, but raising the threshold much higher, there could be much greater fairness without disadvantaging owners of all but very valuable homes (and the latter could reverse mortgage if they wished). A better system would be to abolish the assets test completely - as it is fundamentally unfair and cruel. Test income, including deemed income on assets over a given threshold where they could be returning income but are invested deliberately in non-returning assets to dodge the means test. Make sure the threshold is generous enough to allow retirees to own a substantial home and to have considerable other assets, but don't differentiate between assets. That way, owners of expensive homes don't enjoy an unfair advantage.
    Billy
    11th Apr 2016
    9:28am
    Well what a surprise, how easy it is to make judgement calls on people. Plan B, I purchased my modest house in 1975 including a second mortgage and 5 children when my wife and I moved in. I worked full time during the day and a part time job in the evenings to pay for it. My wife and I had more children and now they are helping pay your pension. You probably deserve what you worked for the same as I did but there are other living in mansions living like kings and still collecting pensions. Grow up. the whole system stinks and needs a complete overall
    Ayers Rock
    12th Apr 2016
    1:43pm
    All governments should focus on fairness at first, nothing else. Otherwise it enters into a privileged society-country where at difficult or war times there may not been enough men with spirits to fight for their own sovereignty. Sooner of later Australia may face such fact since the world population is exploding.
    I think fairness for All means:
    1. If a citizen is a high income earner, than he/she pays high taxes, and support the system more.
    At retirement times, give them more credits for their own old age pension to live with no financial problems. If he has paid high taxes, then forget his own house value. She / He has already paid her/his shares. She / he deserves to receive good old age pension comfortably.

    2. If the person lives at normal salary range, than forget his house value, he had not been able to live in high value house. He has also paid his taxes, and he deserves to receive good old age pension comfortably.

    3. By luck, if the person never worked or paid little taxes, eventually his own house (if there is) may have little value. Leave as it is, even by luck, his own house 10 m$ sky rocketed from little value. These category people may deserve some level decreased old age pension for the sake of keeping social harmony.
    Note: Top salary paid old age pension person should receive 5000 $ (max) per month to award his/her tax contribution duly in the past. Lowest salary paid old age pension person 2500 $ (max) per month for humanitarian reasons. There should be a scale for old-age pension entitlements to all eligibles without looking at their other income and asset tests at the first instance. Then the final-pay adjustments from income and asset tests can be applied.

    What Australia needs now:

    1. Stop or lessen globalist maneuvers! Create more government and private sector jobs. When the majority works efficiently, the treasure money pool is filled up quickly, the Au Gov can pay monthly 4000 $ per retiree possible starting date at the age of 60. After the age 40, people are entering in their aging tunnel, therefore not becoming younger. Pushing the people to work beyond 70 of age means, more younger people cannot find jobs. There should a balance preferential toward younger generations should be able to find them satisfactory jobs. Keep menial jobs offering to younger people, which can cause mental distortions. Do not bring too many greedy eager overseas workers from abroad (true refugees excluded) in order not to sacrifice or choke the Australian own citizens' children future for living. (Too many ingredients mixup in food preparations does not make the meal tasty and healthy.)

    2. Do not become a victim of a global setup game. Globalism is a game, and we are forced to play.
    End of the game the money is vaporizing, and causing to discuss whose house may be entitled to revalue for old age consideration. This is really a bull-shit game.
    Annie
    13th Apr 2016
    9:10am
    This debate by nature of being about change and the family home is emotional. It needs to be about sustainability, equity and no discrimination. For that reason there needs to be a total asset base that does not discriminate on the choices people have made to save and achieve financial goals over a lifetime. Like all assets some increase while others decrease due to circumstances. A home was purchased 50 years ago, others saved and used other assets to build their wealth over the past 50 years. Some have chosen to spend that wealth on travel, lifestyle choices or for medical family reasons. Some have chosen to downsize and release their equity whilst others have chosen not to. The question is why should the person that is continuing to live in one type of asset the family home, be in a position to collect benefits and pensions, while all other people are being told to sell their collections, shares, etc and use their savings to live off before they can receive any form of benefits. If the government is talking about exempting family homes up to a million or two then let all assets be exempt for the same amount not just the family home. Equity in homes can be accessed. No one has to move. If it is to be equitable and non discriminating allow all people to have the same amount of savings or assets including superannuation. An example is an asset base of between 1-2 million which I am sure would allow for the family home for most people and savings. I would guess this would be on a sliding scale for any person once they reach a certain level e.g 1-1.5 million. As for superannuation. This should not be taxed. Many people like myself, paid tax when earning the money and again when transferring to an allocated pension or similar. As for the politicians they should not get a pension and perks for life. They also should only be allowed to take their superannuation etc that they have earns while doing that job just like the rest of the workers in this country. And to end with, while making people work until their 70s and causing industries and manufacturing jobs etc to disappear they create unemployment, more health issues etc in our young and stop them having the same ability as my generation to both buy a house and save for their future old age.
    Adrianus
    13th Apr 2016
    10:49am
    I just checked with the DHS and according to my interpretation the home is currently assessed. Approximately 70% of aged pensioners who are also homeowners have their home assessed at a value of $149,000. This appears to be the same whether you are a couple or a single. At the moment this doesn't appear to be a problem because it is a modest amount, however raising this flat dollar amount may disadvantage the poor as it does now for those living in say a $100,000 dwelling.
    The average house price around the countries major cities can range from $300k - $600k so the idea of assessing a $1m house is not out of the question.
    The problem I see with assessing individual homes on valuations is that for someone in say Melbourne who has just had a 14% increase in property value it could mean having no food money for 6 months until values decline a little?
    I would like to see the $149,000 increased to say $300,000 with an onus on those in lower valued dwellings to prove lower valuations and receive a non homeowners level of pension.
    It is unfair that pensioners with a home valued at $2m-$3m have their home assessed at $149,000.
    Anonymous
    13th Apr 2016
    3:25pm
    The current system is broken, Frank, and changing a randomly set value to another randomly set value won't do anything to fix it. The current discrepancy between homeowners and non-homeowners asset thresholds creates absurd unfairness in many situations, and actually creates a situation where some would be better off selling their home and renting. There's a strong incentive to give it to the kids 5 years before pension age with an agreement you can live in it for life!

    The only answer to the dilemma is to include the house in the assets test at ''fair value'' (perhaps with some adjustments made for location), raise the threshold substantially to cater for the change, and then offer concessional loans to those who find themselves asset-rich/cash poor.

    The current system of discriminating in favour of owners of lavish homes and making those who put their money into investments or savings rather than a flash house subsidize the inheritance of kids of people who inherited or bought mansions is grossly unfair and economically damaging.
    Rodent
    13th Apr 2016
    4:34pm
    Frank

    JFYI the so called $149,000 difference becomes $200,000 on 1 Jan 2017 with the new Pension Assets changes.

    What this does in effect is make a bad situation even worse, as I have often said in much more detail in other related Pension postings
    Adrianus
    13th Apr 2016
    5:22pm
    The current system may be broken but I have not heard of a better one. The problem of individual valuations is that these valuations are arbitrary. Who decides on the value? We know that the value of an asset is only realised when a willing seller and a willing buyer agree that it will change hands.
    Anonymous
    13th Apr 2016
    7:08pm
    Frank, I think this is where the $149,000 figure come from
    Well worth reading.
    As it says something has to be done. The pension is unsustainable in the long term.

    http://patrickcanion.com/retirement-planning/your-home-will-it-be-a-target-for-the-pension-assets-test/
    Adrianus
    13th Apr 2016
    7:37pm
    Interesting article Rad. I agree with the idea of reverse mortgage or whatever name we put to it. For crying out loud, we can change the banking system to cater for Islamists who disagree with the concept of paying interest on loans. Why cant we modify the system to suit the needs of retirees who want to stay in their multi million dollar home?
    Anonymous
    14th Apr 2016
    7:51am
    Frank, the problem of values applies equally to other assets. Who values an investment property. Some years ago, we had a block of land that was totally worthless and a huge liability because Council stuffed up in their planning and let a neighbour block driveway access. For the whole time (well over a year) we fought Council to fix the problem, Centrelink valued the land at the full purchase price (2 years earlier - and values had dropped a lot in that time) and denied us pension benefits accordingly. Similarly, when a commercial property was trashed by a tenant and stood vacant while insurers tried to escape obligation, the owner was refused a pension because the property was valued as it was the year earlier when it was in good order and yielding a high rent.

    If Centrelink can value investment property - and they do!- they can value the family home. The land is valued anyway, for rates purposes. It's not much of a stretch to then look at size, age and construction and determine the building value. And yes, of course there's no reason why we can't implement a satisfactory reverse mortgage scheme for people with expensive homes they want to live in - but why limit it to houses? Why not include other assets that folk might want to retain. I know someone with a very valuable collection of china that has been passed down through generations. They want to pass it to the eldest child one day. Why should they have to sell it to live while someone with a multi-million-dollar home gets a pension so he can leave his house to the kids?
    Adrianus
    14th Apr 2016
    10:00am
    Yes, good point Rainey. Human Services do value houses already. From the sound of your experience they are inclined to assess at the upper limit. Or as it was on both of your examples they had taken the paper values and did not see fit to adjust them. Not everyone can afford to call in a Valuer each time they have a dispute with Centrelink. If they could then how much welfare do they really need? Right?
    Anonymous
    14th Apr 2016
    11:31am
    Frank, calling in a valuer doesn't necessarily help! Centrelink have valuers, and their opinion prevails over all else. Often, they haven't even been near the property and have no idea what they are valuing, and the owner is not permitted to know who they are or to communicate with them or put forward information for consideration, but their opinion still prevails.
    Billy
    13th Apr 2016
    5:16pm
    Frank, I don't know who gave you the information or how you interpreted what you read but the family home is not included as an asset. The home contents is, your car is, any other property you own, money in the bank is and if you receive a superannuation payment it is also included. There to get a full pension don't own anything other than your house. Get rid of everything you have worked for a purchased before you retire and live in your house with no furnisher, no car, no money in the bank but own a 6 billion dollar house and you get a pension. The big problem we have and why we are going broke as a country is unemployment, particularly those second and third generations that have never worked but lived on pensions of any sort all their lives and still collect an full age and our political leaders over the last 60 years that have served two terms in office get a pension at our expense for life, you never here how that much costs us and its never reviewed. We also need the have laws against tax evaders that cannot be circumvented by smart lawyers or accountants. Family should be included as an asset but they are only the tip of the iceberg. We need a government that has the guts to do something about the whole gambit of issues. The problem is they are more concerned about staying in power. I hope this sparks more debate and more than anything our political leaders take heed.
    Anonymous
    14th Apr 2016
    7:44am
    Billy, I think what Frank refers to is the difference in pensions and asset thresholds for homeowners vs. non-homeowners. The family home isn't included in the assets test, but there is a nominal value assigned to it in the assets test, by making the two thresholds different, and in the allocation of pensions, by making the amounts allocated different.

    You are so right about the problems, though, and the reasons they continue. Sadly, I think politicians will continue to make stupid tweaks that create bigger problems than they solve, but make them APPEAR to be doing something. The truth is, I believe, they have neither the motivation NOR the ability to fix the problems. We pay them generously and give them amazing benefits to supposedly attract smart, capable people, but I think we currently have a bunch of inept buffoons!

    14th Apr 2016
    8:26am
    I am seeing a common thread of selfishness and assumptions in all of these posts. So many false accusations, without much serious thought about equity! For example, the same folk who scream that the family home should NEVER be included in the assets test ask why someone with OTHER assets should get a pension so they can leave money to their offspring. Well, why should the homeowner be able to leave his house to his offspring, when the person with other assets is denied that right? Why should the taxpayer support someone who inherited a multi-million-dollar mansion, was lucky enough to have their home's value skyrocket, or plunged money into a mansion to avoid the means test, yet the taxpayer won't support the guy who made do with a modest little rural cottage and saved?

    The system is broken, and it won't be fixed by silly little tweaks here and there. Like the change to the assets test recently, tweaks will make it far worse. But they will fool some of the people, who take a simplistic view of the situation and don't think through the full implications.

    What we need, and what everyone here should lobby for, is for the whole system to be discarded totally and the rules rewritten from the ground up to be more equitable, more efficient, and more economically sustainable - but also to recognize the reality that today's retirees paid into a tax program for their retirement and ARE ENTITLED to benefit from that. As the benefits of compulsory super cut in, changes must accommodate the changed environment, but it's also necessary to recognize that only the better off will get substantial benefit from compulsory super. There will still be battlers who will need taxpayer support, and the system should prioritize their needs.

    A key consideration in writing the rules, though, must always be ensuring that incentives and rewards are retained so that people TRY to be self-sufficient when they can. The current attitude of ''you have money - give it back'' is communist and economically destructive. It will reduce saving and self-sufficiency and drive social problems up. More people will claim the pension and there will be less for the needy. Those who supported the recent assets test change obviously either can't do math or can't see through their green eyes to recognize that if you punish people for saving, they will stop saving! There are now very rich rewards for many to spend up big and put their hands out - and richer still for putting money under the mattress!

    What really defies logic is the repeated accusation of greed against people who saved for retirement and now want to enjoy fair benefit for their efforts. Yes, I want to leave money to my daughter, who is struggling with a disabled child and will never accrue retirement funds because as a carer, she can't earn. Leaving money to her will save the taxpayer heaps. And yes, I believe the taxpayer should give me a little support so my daughter can benefit from all my years of going without to achieve the goal of leaving her something. Selfish? Why? The taxpayer is giving to my neighbour who was way better off than me always, but spent up big cruising the world, and to the neighbour who sank $1.5 million into a house and gave his kids $1 million worth of land. It's looking after the spendthrift down the road who earned three times as much as me but holidayed abroad, dined out, drank and gambled, and bought his wife $1000 outfits and $800 handbags.

    The taxpayer supports the guy who blew $500,000 of inherited money going around the world at age 64, and the guy who gave $500,000 to his kids five years before applying for the pension, and the guy who sank $2.5 million into a luxury house so he'd escape the means test. The taxpayer is funding the inheritance of owners of lavish houses, and the retirement of big spenders, and the gifting of people who gifted 5 years before pension age. Why the hell shouldn't someone who did none of those things be denied the same level of pension as those who did those things receive? Oh, because someone who sacrificed to save has a little in the bank now. So take it away - no matter why it was saved or how hard it was to acquire it? And those who support that mantra call ME selfish for wanting to benefit from MY hard work and sacrifice, instead of giving it the government to give to them!!!!!

    Mr X who went around the world at age 64 gets a full pension. Mr Y who can't go around the world until age 70 because he's caring for his sick mother-in-law suffers huge loss. Where's the fairness in that? But the green-eyes and illogical say ''Oh Mr Y has dollars in the bank. He should forfeit his dream of a world trip and get no pension. Mr X has nothing so he must get a full pension.'' And some people call that ''fair''!!!!!

    There is only one ''fair'' solution, and that is to stop testing assets completely and test ONLY income, allowing people to keep a decent portion of what they earn, but increasing the amount of pension they lose for each dollar earned as earnings rise - a progressive system like taxation. OR pay everyone the same amount in retirement and implement a progressive tax system.

    ''Pensions for the needy only'' is a nice theory that can never work. It's impossible to measure need accurately. Who is more needy - the healthy couple who can do their own home maintenance, or the sick couple with a little more in the bank but $1000 a month in chemist bills and unable to do home maintenance themselves? The guy with no kids, or the guy who feels compelled to travel once a month to give support to his daughter who is caring for a disabled child? The guy whose parents and in-laws a dead, or the guy who is driving an hour each way once a week and spending all day visiting at an aged care home? Is the guy who earned $180,000 a year but spent it all on luxuries, anticipating a pension in retirement, really more ''needy'' than the guy who earned $35,000 a year and saved? Does gifting before you turn 60 make you ''needier'' than gifting after age 60? Does having $50,000 more and huge health needs make you less needy than someone with $50,000 less and good health?

    It goes on and on. Need CANNOT be assessed fairly, and nor can assets.

    And for anyone here to suggest someone else should not be entitled to pension benefits, with no knowledge of their personal circumstances, is arrogant and disgraceful.

    Yes, Bonny, Frank, and others, we DO have a ''welfare mentality'' in Australia. We DO have a sense of entitlement. Where did it come from? It arises because the PRIVILEGED make rules that are unfair and cruel and that deny hard workers their rights. When people are treated unfairly, they give up playing by the rules. If the rules are wrong, who can blame someone for wanting to circumvent them. The ONLY way to change the ''welfare mentality'' is to fix the system so that people enjoy fair reward for their endeavours and have strong incentives to NOT want welfare. That MUST be done with a careful eye on ensuring the genuinely disadvantaged are adequately supported, but equity, incentive and reward must be prioritized in the design of a new system, otherwise the ongoing gradual collapse will continue and ultimately we'll have far more poor and needy and far less money to support them with.
    PlanB
    14th Apr 2016
    9:06am
    Well Rainy I have NO idea why the hell you abused me as I agree with most of what you said -- maybe you can fill me in on why you are so crooked on me?

    I have NO IDEA what you are talking about in this statement

    "PlanB, your statement ''I was the one...'' suggest a very egocentric viewpoint. I was ALSO one of those who worked damn hard and long to live where I wanted to when I retired, and to save a little nest egg as well. I didn't have super either. I chose a modest home so I could invest some money and afford a lifestyle a little better than that pensioners have to settle for. But according to your logic, I should have to hand my hard-won savings to the taxpayer, and give up all the benefits I saved to attain, so you can keep your more expensive home. Goodness, what an astonishing proposal!!! "
    --------------

    I was saying that I worked long and hard to try and move to where I wanted to be -- and had to wait till I could get work in the new area.
    No there was no super when I worked.

    I have been here for near 40 years now and yes the home has got up in value as I am sure every home should do.
    -------------------------------------------------------

    Rainy I did not see where I said that you should hand your hard earned savings to the tax payer?
    PlanB
    13th Apr 2016
    2:54pm
    Honest I would be the least egocentric person. I apologise if I came over that way --as I deplore people that are
    Adrianus
    14th Apr 2016
    10:12am
    PlanB if you haven't been abused by Rainey or mick then you aren't making sense. Consider it a medal. Why don't you try spelling her name correctly?
    PlanB
    14th Apr 2016
    10:50am
    I made a mistake Frank -- don't you ever do that?
    I noticed I had missed out on the E in Rainey but there was no way I was able to edit.

    Frank, I also do not understand your last comment?
    Anonymous
    14th Apr 2016
    11:23am
    PlanB, I apologize profusely if I misunderstood something you said and responded in a manner that caused you to feel aggrieved. I guess I took exception to the ''I was the one...'', which probably was never intended to imply that you thought you were the ONLY one. It seemed to me that you, like many, were suggesting it was okay to deprive someone with a modest home and more savings, but the pension system should continue to favour those with a more valuable home and disadvantage those with more in other assets. To me, that's grossly unfair and unreasonable and economically and socially damaging.

    Most homes rose in value over the years, but in many cases it's those who could afford to buy earlier, and better quality homes in better locations, who have enjoyed the greatest rise in value. Also, many who inherited lavish homes are benefiting unfairly from the current exemptions. So the less fortunate, who struggled to afford a basic home in a less desirable area, or who lived in a remote area because of work, or who, perhaps, found they had to sell and upgrade several times to achieve a home suited to their needs, may well be the ones suffering most under the current unfair regime.

    I'm not for an instant suggesting people like you should be forced out of their homes, or deprived in any way because their homes increased in value. But I am suggesting that the current favouritism of homeowners with more valuable homes should end. It's unfair.
    Adrianus
    14th Apr 2016
    11:44am
    Rainey you did not simply misunderstand, you misconstrued entirely. Here's what PlanB stated...

    " I was one the saved and worked long and hard....."
    I took it to mean "I was one of those who saved and worked long and hard" it is simply missing the letters ' os who.' As often happens on this site.

    PlanB was referring to another poster's sentiments about those who work many years in a hard job, who are now being swept under the carpet as if their contribution is meaningless. PlanB was saying he is one of them! PlanB worked long and hard! What could you possibly find offensive in that?
    PlanB
    14th Apr 2016
    11:45am
    Apology accepted Rainey and thank you for that.

    I did right it wrongly. There are many people that have worked long and hard.
    PlanB
    14th Apr 2016
    12:05pm
    Thank you also Frank for your explanation.
    Anonymous
    14th Apr 2016
    6:02pm
    No, Frank. I didn't misconstrue completely. I stand by what I said. I sympathize with PlanB and I appreciate that he has worked hard - so have I. But at the end of the day, insisting that the family home must be excluded from the assets test while supporting the idea that people with other assets should be deprived, regardless of the source and type of those assets, income from them (if any) and reason for sacrificing to acquire them is UNFAIR IN THE EXTREME.

    I don't know where PlanB stood (or now stands) on changes to the assets test, but it's disturbing to me that many of the same folk who screamed loudly that people with a savings shouldn't get any pension benefit insist that people with valuable houses SHOULD retain a full pension.

    Ultimately, a fair system would value other assets the same as houses if those other assets are not returning. People who sacrifices lifestyle to save for personal goals should not be penalized for doing so.
    babyboomer
    14th Apr 2016
    10:25am
    Should remain exempt as all other assets are included. We don't want to sell our much loved home with all its memories & move just because we need the pension. Of course if the Politicians would include their homes & assets in some sort of means test BEFORE getting their over-generous perks in retirement I might feel more generous about my home being included.
    Anonymous
    14th Apr 2016
    11:29am
    So an unfair system that disadvantages many who struggled for years to save for their retirement and discourages responsible behaviour should be retained because YOU don't want to sell YOUR much loved home, Babyboomer. Sorry. That doesn't work for me.

    I'd hate to see people forced out of their homes, but the system, as it stands, is WRONG. It needs to be fixed. It certainly shouldn't be changed in a way that disadvantages battling homeowners, but there are solutions that would not harm anyone who owns a modest home, would improve fairness, and would be economically and socially beneficial.

    Surely it's worth exploring options rather than just shouting that you want to preserve a system that benefits you, and to hell with the those who lose by it?
    Danielle James
    14th Apr 2016
    8:59pm
    Many people purchased their homes in modest areas; in time these areas changed to being very expensive up-market postcodes.
    It would be entirely unfair for those who have lived in their homes all their lives to suddenly have to sell, not because of anything they have done, but because of market forces beyond their control. An appalling and difficult action for those in their later years.
    Anonymous
    15th Apr 2016
    9:54am
    I didn't see any suggestion of forcing anyone to sell, Twila. But why should someone with a very low value home have to sell their investment property or shares because they can't get a pension, when someone with a multi-million dollar home gets a full pension. Do you really see that as fair?

    Currently, people with very modest means are forced to live on their savings while people with two to four times as much get a full pension.

    I wish people would stop the emotional reaction and focusing on their personal situation only and consider the issue from a broader point of view. I don't believe anyone wants to force pensioners out of their homes, but we should be removing the incentive to over-invest in the family home to escape a patently unfair and cruel means test.
    Anonymous
    15th Apr 2016
    9:54am
    I didn't see any suggestion of forcing anyone to sell, Twila. But why should someone with a very low value home have to sell their investment property or shares because they can't get a pension, when someone with a multi-million dollar home gets a full pension. Do you really see that as fair?

    Currently, people with very modest means are forced to live on their savings while people with two to four times as much get a full pension.

    I wish people would stop the emotional reaction and focusing on their personal situation only and consider the issue from a broader point of view. I don't believe anyone wants to force pensioners out of their homes, but we should be removing the incentive to over-invest in the family home to escape a patently unfair and cruel means test.
    Caky
    15th Apr 2016
    9:56pm
    I would like to know why some people living in over 55's Retirement Villages and on Aged Pensions are able to get Rent assistance? I know they don't own the land they are on but some most of them do own the House they are
    Belle
    20th Apr 2016
    12:45pm
    Consider our situation. We have an adult son with Down syndrome and an adult long term foster son with foetal alcohol syndrome. We scrimped and saved and built a "unit" attached to our house for them to live in.
    Our house is in a very desirable part of Sydney, location chosen so our sons could attend a Local special school.
    The house is worth much more than the limits bring suggested
    We have saved the government loads by housing our foster son as well as our own son.
    Should we have to uproot them and take them away from all that they know n order to escape the assets test on the family home?
    PlanB
    20th Apr 2016
    12:48pm
    NO Belle IMO a definite NO!!!!!!

    Good on you and I hope all works out for you AND your Family
    SKRAPI
    25th Apr 2016
    10:22pm
    Would that assessment include politician's homes that also get an indecent sized pension plus perks we could only dream of. Self funded retirees also do it hard , they get no reductions on anything . Pensioners have usually worked & saved hard to buy their home seeing it as security which they can borrow against if necessary. So if the Pensioners R allowed to realise the value of their abode B 4 their demise at what interest rate & would it be locked in & would they B able to invest wisely some of this equity tax free or low tax to replace/supplement their Pension & would they still get Pension benefits @ Drs. , Chemists etc. as do pensionersdo now ??
    Alicat
    30th Dec 2016
    6:07pm
    I would expect that someone with a 3 million dollar home will have been earning enough to take advantages of all the tax dodges and has probably paid very little tax. They would have also have been able to afford to take advantage of the lower tax rate and put extra money into their super which ordinary income earners can't afford to do. So while I believe your family home should be exempt regardless of how much it is worth - I also believe if you have sufficient super and investments to provide you with an income that exceeds the pension then you shouldn't be entitled to receive a pension. The pension should be there to provide basic support to our elderly who do not have sufficient super or funds to live on, not as an entitlement.. Our tax money isn't used to solely fund pensions. If we take the view that we pay tax so we are entitled to a pension, then are we also entitled to receive the dole regardless of what we earn? No, each comes with its own specific guidelines to be met. I see no problem with anyone who is receiving more than the pension from their investments or their super being exempt from receiving the pension. After all that was why super was introduced - so we could fund our own retirement - not rely on the government.
    About time
    3rd Feb 2017
    6:02am
    No pensions for Asylum Seekers on arrival in Australia. No pensions for those with those with 5 or more children. No pensions for drug dealers. No pensions for those in Prison. No pensions for those who do not wish to work.
    About time
    3rd Feb 2017
    6:03am
    Stop giving pensions to Asylum Seekers, Drug Dealers and Junkies and those in Prison.
    Adrianus
    3rd Feb 2017
    6:56am
    About time, seems like you have a problem with asylum seekers?