2nd Apr 2015
An end to indexation uncertainty?
An end to indexation uncertainty?

The legislation proposing changes to indexation of the Age Pension, which could see pensioners worse off by up to $80 per week, have struggled to gain support of crossbenchers and pass the Senate. In a move that would see the legislation scrapped, the Australian Council of Social Services (ACOSS) has put forward recommendations that would, instead, focus on eligibility for a part Age Pension.

The recommendations put forward by ACOSS could achieve savings of $20 billion over a decade and would pave the way for the current indexation on pensions to remain as is. The proposals are:

  1. Reduce the asset test for homeowners to $100,000 for singles and $150,000 for couples. An increase in the taper rate, where pensions are reduced by $1.50 for every $1000 over the threshold, to $2 for every $1000.
  2. Abolish the Seniors Supplement that is paid to holders of a Commonwealth Seniors Health Card. This is one of the original proposals from the 2014/15 Federal Budget.
  3. Implement several reforms to the superannuation system, which include increasing the preservation age to match the Age Pension eligibility age (67) by 2027, restructuring and simplifying the tax concessions for superannuation contributions and take measures to stem income tax avoidance by those who put money through superannuation.

By shifting the focus from the expectation that those with the least should do the heavy lifting to ending welfare and tax concessions for the rich, the proposals by ACOSS are likely to please crossbenchers and the opposition alike.

Find out more about the changes proposed by ACOSS





    COMMENTS

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    Davymac
    3rd Apr 2015
    8:39am
    $100,000, and respective $150,000 asset levels are too low. It would be more realistic to have the levels for home owners at $200,000 single and $250,000 for married home owners. Remember assets include furniture,car,boat, and caravan. The cost of these would set you back $100,000 these days. Retirement can include these items and then you need some cash reserves for replacements and repairs.
    Bonny
    3rd Apr 2015
    10:03am
    These levels could be raised higher if the family home is included in the assets test. That's where a lot of inequity exists as well. Should someone with a home worth millions get the full age pension and their heirs get a big windfall? I don't think so.
    Grumpy
    3rd Apr 2015
    10:17am
    Bonny see my later post as to why the value of a principal residence should not be a relevant issue. You consider only the simplest case. When you start looking in detail you will find a host of varying circumstances which create complex social/human issues other than mere greed.
    Davymac, when considering asset values for pension purposes, the asset value is its sale price, not purchase price. Have you tried to sell anything used lately. I have an 18 month old printer in excellent condition, cost $140. I cannot give it away. It is going to the tip. Current value of car, boat caravan? About one tenth of what you bought for, assuming you bought more than a year ago.
    Rose
    3rd Apr 2015
    11:23am
    Davymac - Household & Personal assets & vehicles/boats etc are assessed at the value of selling that item today - quite subjective as they are only worth the value that someone else is likely to pay & generally well below original or replacement cost. Most people overvalue their assets for Centrelink as they think it is like valuing for insurance replacement. Eg if you had a garage sale today - what would you get for all your assets - for most of us - probably not a lot - that is the figure you should be using for Centrelink asset values.

    Also as you replace assets you may be increasing those values but also reducing your bank account balances.
    heyyybob
    3rd Apr 2015
    7:57pm
    B. G. R. ---- Quite valid points.
    Nette
    4th Apr 2015
    7:56pm
    My jewellery alone could put me over the top, my ornaments and furniture alone would put me over the top, do they really have the right to enter our homes and value every item we have that we have spent a lifetime collecting or inheriting.
    Dee
    3rd Apr 2015
    8:47am
    This may become a disincentive to saving for many. This suggested rate seems too low to me and people may rip through their savings very quickly and then qualify for pension earlier than they would have. I would like to see some good projections.
    nena
    3rd Apr 2015
    11:52am
    Yes, Dee. That is what a Capitalist system does want, spend...spend...spend...
    They would win one way or other: a) if the well off oldies keep their assets they will miss up a part pension (good saving for government) or b) if they spend the money the government gets more taxes etc. which is also good for gov. A positive way for keeping exporting the goods of our land and in exchange it would be more exported items...and the big enterprises get richer and workers get poorer.
    The...is spend your money please
    andromeda143
    3rd Apr 2015
    9:24am
    This is an outrageous act. I own a house worth only $600000 and have about $400000 in super, which does not make me rich. However, I will lose about $10000 in age pension. Others may own a 2 million dollar home and have less super, but will lose much less.

    A fairer suggestion would be to make the first 1 million dollars of the home exempt from assessment but then include any excess over the 1 million as assets.
    mogo51
    3rd Apr 2015
    9:49am
    Your suggestion is certainly more sensible. I am a single pensioner with no home and only 140k in super - I rely on the extra income from my super to have an acceptable lifestyle. I am far from wealthy, but they will still peanilise me! What a joke.
    House prices in Sydney are out of the park again, friend just sold average home in outer west for 600k plus. He is not rich either. It will be difficult to find a fair base but family home should be considered if they are going to consider my lousy 40k as assessible.
    Bonny
    3rd Apr 2015
    10:07am
    I agree house should be included in the assets test.

    A fair base for the family home is easy just take the highest median price of the Australian cities and then index it to inflation.
    TREBOR
    3rd Apr 2015
    10:21am
    Hang on - you just entered the argument I launched elsewhere. your $400k at 5% interest should net you around $20k - which is about pension... like anyone who works to get extra (some of us have been ambushed for our super in any number of ways - WE're not rich at all) the pension cuts out at $0.50 per dollar over a certain amount, and runs out at around $50k (from memory).

    My issue in argument was which standard should be employed - an amount equivalent to pension being sufficient or the cutout point for pension, after which super should be treated as savings for tax etc. I went for the higher figure.

    Point is though - someone with a heap of super and getting more than pension from it can still get a part pension, which seems rather unjust. Pension should be for those who need it - not those who've already had a good enough run to not need it and still don't.
    Grumpy
    3rd Apr 2015
    10:43am
    Andromeda143, I have argued elsewhere in this discussion that inclusion of the principal residence in asset values will create more problems than it solves.
    I have cited an example where appreciation of an aged persons home for no reason other than real estate fashion could result in them having to leave the only home they have known.
    No one has yet hit on the issue of what valuation is to be used. The only true test of a home's value is what you sell it for, not what a real estate agent believes it can be sold for. What if a prospective pensioner is compelled to sell their home and the actual sale value is less than the asset test threshold. Let a pollie justify that to his constituents. From the pensioners point of view, too late his/her lifelong home is gone.
    nena
    3rd Apr 2015
    12:08pm
    I'm one of those whose the government, and every one else, will be better off if I die...Because I'm single on a full pension only income, that's right: I only own a modest home and a 2002 model car and my assets are about very modest also with a few dollars in the Bank. But I'm wealthy inside and very happy indeed. I'm vegan (please don't put GST on fruit and vegies!!!) I'm totally connected to Nature which I love. The vulnerable, Animals and Children around the planet are my concern but my conscience is at peace and I will live for a long time yet due to my simple and humane existence....buy the way, I'm childless...but I enjoy the company of Belinda, a beautiful four legged creature WHO adopted me years ago.
    OnlyGenuineRainey
    3rd Apr 2015
    5:09pm
    Trebor, you say the pension should be for those who need it - not ''those who've already had a good enough run to not need it'', but that's an incorrect judgement. Half those on pensions had a far better run than a vast number who don't qualify or who only get a small part pension. Those with a little nest-egg in many cases sacrificed a great deal during their working years, while many of those with nothing spent freely and enjoyed the high life. Also, many have manipulated the system to look like they have nothing. (Neighbors gave all their money to their kids before they turned 60, and now draw a full pension while their kids pay their bills for them!)
    The ACOSS proposal and the proposal to include the family home as an asset will render many who worked hard and sacrificed a lot to enjoy a slightly better living standard than pensioners actually worse off than full pensioners. Lots of people with modest superannuation and savings balances struggle to get by without the generous benefits pensioners enjoy and with the often quite high costs of maintaining and paying rates and insurance on the home they worked for 40+ years to pay off.
    Your assumptions are far too narrow and simplistic, and quite simply WRONG. I support a fair and equitable system, but retirees who struggled to save have taken a huge hit with interest rate falls - transferring wealth to younger folk who are borrowing money. Taking away all incentive to be responsible is not going to help the country in the long run. We should implement fair taxation of the rich, but let those who battled hard to earn a slightly more comfortable retirement enjoy their fair and modest reward. We should not be punishing frugality and responsible financial planning and management by average workers who didn't ''have a good run'' as you put it, but who MADE their way through hard work and extensive sacrifice.
    Chris B T
    3rd Apr 2015
    6:10pm
    The trouble with the valuing at a amount dosn't account for location .
    Example 1 bedroom apartment with car space at Bondi Beach if you can find one $1mil+ with water glimpes. Another area would be a parlatial home with all the
    fruit. (I don't live in NSW) This is just one of many problems with home costing.
    TREBOR
    4th Apr 2015
    5:22pm
    C'mon, Rainey - many of those on only pensions such as my good self were ambushed by every stupid idea that came along.. sometimes it's a matter of luck, such as not finding a crazy woman to share your wherewithal with,who wrecks the whole thing, or not being a man in the public service when affirmative action came in for everyone else and being dumped and sidelined after an exemplary contribution (an entire system of mine still used by the government thank you very much!), or kicked in the teeth by dismal 'management' in the porivate sector.

    I'd say my high ground of 100+ hour weeks to end up sidelined in my late forties as a nothing and a nobody etc is more than enough for me to suggest that those with a nice nest egg had a better run. Maybe you should read my books sometime.

    There is a point at which enough is enough - and if you read my other blurbs, I am very much of the view that every pensioner should be able to earn up to the cutoff point of pension - but those who actually work for it should get the same tax treatment as those who get it from super, and not be stung AGAIN for having to work in their retirement years just to have a little bit extra and some hope.

    I think that is eminently fair to all.

    Do NOT try this at home.... it is a very painful thing to endure.
    Nette
    4th Apr 2015
    8:00pm
    I agree I know women who live in the city whose homes are around 2 million in value but they still qualify for the full pension. Maybe they need to sell their home, but an apartment and bank the change then they will also be self funded
    Nette
    4th Apr 2015
    8:00pm
    I agree I know women who live in the city whose homes are around 2 million in value but they still qualify for the full pension. Maybe they need to sell their home, but an apartment and bank the change then they will also be self funded
    Ruby
    3rd Apr 2015
    9:28am
    A few years ago there was a suggestion for similar scheme to the one in the UK. It would mean That the pension is paid to everyone and the taxation system adjust through taxes. Plus at the present. Anyone who comes to this country with the permission of the government must be here for 10 years before being able to claim any welfare benefits, but if anyone comes here without going through the normal channels. They can claim welfare benefits immediately. This is unfair and definitely not the Australian way. Either everyone can claim benefits immediately or everyone has to wait 10 years. PS. I have lived and worked in Australia for well over 40 years before I retired.
    mogo51
    3rd Apr 2015
    9:50am
    Well said and agree totally.
    Paicey58
    3rd Apr 2015
    2:11pm
    Agree
    the white rat
    3rd Apr 2015
    9:44am
    as living expenses increase, the assets level should be raised not lowered, the dummy who suggested singles assets should be lowered to $100,000 and couples to $150,000, needs a reality check, what mental institution did that person escape from.

    jim
    particolor
    3rd Apr 2015
    10:00am
    They forget to take their Medication every SO OFTEN !! :-(
    Bonny
    3rd Apr 2015
    10:08am
    I agree with lowering the asset test levels. $150,000 is plenty before the pension is effected.
    TREBOR
    3rd Apr 2015
    10:23am
    Yes - it is only fair that the assets test be indexed at the same rate as pension. We all know by now how costs of living keep going up and up
    particolor
    3rd Apr 2015
    5:32pm
    TREBOR.. There is no end to the generosity in this Country ! :-) Telstra just gave Me 50 Free Gigabytes on my Computer account on top of the 50 I pay for ! I cant even use 20 GB of what I've already got monthly ??... 100 GB now ?? Will I thank them ? :-)
    TREBOR
    5th Apr 2015
    11:42am
    Hush - their generosity knows no bounds! Perhaps you could flog the extra gigs off on the open market??
    Travellersjoy
    3rd Apr 2015
    9:49am
    The Age pension was not designed to enable recipients to live in luxury. It has always aimed for adequacy, and usually not quite managed even that.

    Anyone who is stupid enough to blow a decent amount of super savings to live on the pension, deserves what they get - barely adequate.
    Anyone who decides not to save for retirement so they can have a lazy life on the pension, deserves what they get - a continuing struggle to keep their heads above water.
    How stupid does Dee think people are?

    The only people living solely on the pension are those who couldn't, for several reasons, save money. Most are women who never had continuous employment, got dudded by sneaky husbands in divorce proceedings, worked in industries that paid no super, or where wages were so low they spent it all on rearing their children. They deserve a better deal than they get.
    Some pensioners have low super balances, and get a small top up to the pension that makes their lives a little, very little, easier. They also need a bit of a hand up.

    The idea that people who work and save shouldn't pay tax is laughable. No civilised society would exist in Australia if we hadn't worked and paid tax. No roads, railways, schools, hospitals, universities, etc etc. Once I felt proud that my taxes supported our wonderful country with its universal health and education, free universities, infrastructure, arts and providing meaningful work for tens of thousands of people. Now, so much of our Common Wealth ends up lining the pockets of the 1%, disappearing in sordid corrupt deal-making, feeding a fleet of rent seeking corporations, and improving the bottom line in foreign countries, that it is harder than ever to feel proud of being a tax payer, while public service standards have gone down the tube.

    This is largely our fault for believing and voting for governments that promised to make some of us rich by running down and selling off our assets. If we ran our own lives like this, we would end up broke and on the pension for our old age.

    Any outcome that provides reasonable standards of living for retiring people, supported by the 'social wage' of public investment in health, welfare and infrastructure that makes life more liveable for all of us, is welcome. Tax subsidies to keep the well off in 5 star comfort, are inappropriate and unnecessary burdens on the public purse, and should be eliminated, so returning billions to the Common Wealth.

    When that is fixed, there is plenty more to do! The GST is outmoded and regressive. Some quality analysis and forward thinking is needed to get our national finances right into the future. The LNP/IPA are not the people for the job.
    OnlyGenuineRainey
    3rd Apr 2015
    9:59am
    Sorry, Travellersjoy, but the statement ''The only people living solely on the pension are those who couldn't, for several reasons, save money. Most are women who never had continuous employment, got dudded by sneaky husbands in divorce proceedings, worked in industries that paid no super, or where wages were so low they spent it all on rearing their children. They deserve a better deal than they get.'' is not accurate. Without exception, everyone I know on a full pension was far better off than me but spent freely during their working lives and either blew large sums on a cruise etc. on retirement or gave money to their kids before turning 60. Yes, there are genuinely needy, but there are plenty who are pensioners by choice or due to being irresponsible.

    I don't accept the ACOSS proposals as reasonable. I do strongly support reform in the superannuation tax system, but the ACOSS proposals will leave many moderately comfortable retirees, who saved responsibly and didn't abuse the system, actually worse off or no better off than full pensioners, and that's unfair.

    We need FAIR reform such as that proposed by the Greens, together with a merging of assets and income test to apply fair deeming rates to assets (preferably graded because higher wealth individuals earn higher returns investments) and then measure income only, making the tests fair and equitable across the board.
    Some pensioners have low super balances, and get a small top up to the pension that makes their lives a little, very little, easier. They also need a bit of a hand up.

    As for the design of the aged pension - yes it was designed for adequacy. And equally the system was designed to reward those who saved responsibly for old age, not to penalize them as the ACOSS proposal does.

    I agree wholeheartedly with your last paragraph. We need a total system overhaul to return to fair, progressive taxation and a sustainable welfare system that provides decent support for the needy but does not offer incentive for people to structure their affairs to qualify for pension benefits. The LNP are DEFINITELY not the people for the job!
    Grumpy
    3rd Apr 2015
    10:31am
    Travellersjoy, I agree with Rainey, you are way wide of the mark when describing the only people dependent on the pension.
    In my case retired at 55 in the wrong area. No chance of work (I did try), tidy nest egg which all got dissipated over next 10 years in providing accommodation for my wife and myself and paying the living expenses of a very frugal lifestyle, and being defrauded by the Wall St. "gurus". We now qualify for part pension, and will over time as our super runs down eventually qualify for full pension. How do we fit into your scheme of things.
    During my 30 years working life I paid tax at the top rate and my wife and I drew very little on the system. So I do now find highly objectionable the extent to which LNP governments during the last 20 years have been severely skewing the whole tax system in favour of their own at the expense of all the other hardworking "ordinary" Australians. In doing so they have also squandered money which should have been availabe for nation building projects. Had the y not squandered the money in this way all of our current welfare and education programmes would be sustainable.
    TREBOR
    3rd Apr 2015
    10:32am
    I see both sides here, and they are based on personal experience and observation.

    What I do not, and cannot see, is why there is not a cutoff point for stashing money into super with tax concessions and then receiving the proceeds later with tax concessions. People with that sort of money will save it in some way anyway - there is no need for them to receive a free handout for putting money into super when they will, or shouldn't, ever get a pension anyway.

    The room for change in super is at the top - not at the bottom and the lower middle etc... these are areas where simple figures can work out the limit on super without paying full tax on it.

    Concessional tax should only apply up to an amount that will provide an adequate living - not excessive luxury for free. After that amount, which can be reviewed and adjusted annually to cover costs of living, all money deposited is SAVINGS and should be treated as such for tax, i.e. taxed at full rate before deposit and taxed on earnings afterward.

    Simple to me. that way everyone is treated the same. We all know by now that a pensioner who works both loses pension and pays tax at full rate including on aged pension (FCS).

    Why should super hoarders be treated any differently? My job and pension ARE my super after a lifetime of very hard work for nothing, the way I see it I deserve to be treated fairly for once. Earning in retirement ARE super, and should be treated the same across the board.
    OnlyGenuineRainey
    3rd Apr 2015
    9:49am
    The ACOSS levels are too low. They ignore the current low - and reducing - returns on investments. They destroy all incentive to work and save and will reduce many with only modest savings to actually be worse off than pensioners. The low levels will encourage gifting and spending of large sums and drawing larger pensions to gradually get to a position of qualifying for the valuable pension benefits that those with very modest assets are often denied - making them worse off, in some cases, than pensioners. They have negative longer term impact as they encourage people to reduce their assets to qualify for valuable pension benefits. The Greens have put forward a much fairer proposal, based on changing the tax on superannuation. Also, the income and assets tests should be merged, with sensible deeming rates applied and fair exemptions for unusual situations where - through no fault of their own - people end up with ''assets'' that don't return and may actually be liabilities. (This happened to us for a time when a council planning error made a block of land unusable and unsalable. Thankfully, it was ultimately resolved, but took 14 months.)

    The Greens proposal to reform tax on super is much fairer and achieves good savings without penalizing those with modest means. (ACOSS leaves the rich untouched, hitting out only at those who - often through great struggle - have achieved modest savings).

    Reform is needed, but it should not totally destroy incentive and it should not target one group to the exclusion of others.
    crazy one
    3rd Apr 2015
    10:05am
    I would say that these changes will only cover the normal people out there and not these people like Abbott or others that retire from their so call hard jobs that they do when they retire with their pensions that they get.
    particolor
    3rd Apr 2015
    5:19pm
    :-) :-) < Tony & Joe !!
    TREBOR
    5th Apr 2015
    11:45am
    You are correct - Tones and co are in the sublime category of having a super fund that doesn't work on the market for its cash - but gets it direct from the organ grinders out there - you and me etc...

    If their super fund ever collapsed, it would simply be topped up out of consolidated revenue.

    A rort through and through if you ask me.
    Grumpy
    3rd Apr 2015
    10:10am
    Politicians and contributors to this site (including myself) have a penchant for half considered responses to the issues. There is never sufficiently broad a consideration of the breadth of issues. I will try and mend my ways.
    The proposition of excluding/limiting principal residence values from asset tests is a case in point. A senator has suggested including the home in the assets test, others are suggesting a cutoff of $1m (to which I was initially drawn).
    Hypothetical case history. Young couple buy inner Sydney terrace house much in need of renovation for a low value. Over the next 40 years they renovate and extend as they raise their family. They reach retirement age with little superannuation as they worked in the period before compulsory superannuation was significant. On income test they qualify for full pension. On assets test because Sydney's population has grown and their inner city suburb is now trendy, their little terrace house is worth $1.2m.
    All current proposed changes would deny them the pension. They therefore have no income. They will be forced at age say, 70 to leave the home in which they have lived for 40 years+, which holds all of their memories of raising their family and which is in the only area they have known and where their social network is established. Why? Only because real estate fashions and politicians' views have changed.
    The real question is what kind of Australian society do we want? One in which people's dignity is considered compassionately, or one governed only by the economy and dollars?
    Let us not forget we would not be in this bl**dy mess if politicians had not fed their big business and wealthy mates with a diet of tax holidays and tax breaks over the last 20 years out of the proceeds of the Commonwealth's natural resources, the property of all members of the Commonwealth. (I have done the figures myself which prove this beyond doubt.)
    The existing welfare system is affordable but for the profligacy of past and present LNP Coalition governments who have consistently, and knowingly squandered the benefits of the resources boom in tax cuts (most generously to the already wealthy) instead of investing part at least in building the nation.
    From the length of this comment you will readily understand why politicians do nopt go there. It will not fit neatly into a 90 second media grab.
    particolor
    3rd Apr 2015
    2:52pm
    None The Less It was good reading and should be front page on the Sydney Morning Herald !! :-)
    TREBOR
    5th Apr 2015
    11:47am
    Well said, Grumpy - and very factual.
    alinejordan
    3rd Apr 2015
    10:15am
    they're talking about subsidising people with 1million in cash.. i think that's a darned good idea, stop subsidising people who don't need it and pick on the people who do.
    Kactus
    3rd Apr 2015
    10:17am
    No mention of the income test?
    They only just finished changing the rules for people born after 1949.

    http://www.yourlifechoices.com.au/news/changes-to-deeming-rules

    Voters will only end up becoming more and more confused.
    Dee
    3rd Apr 2015
    11:10am
    Re the family home being counted as an asset. This would mean pretty much no-one in Sydney would qualify for the pension. So you would have to move away from family and supports. That's a great thing to do when you are elderly!"
    tactful
    3rd Apr 2015
    11:23am
    Davmac what really needs to be remembered is that the value of assets is what they could be sold for right now, not the amount paid or what they are insured for or what there replacement vale is.
    As an example if you have a caravan that you paid $65,000.00 for 12 months ago, what could you sell it for right now. You may find you'll only get around $25,000.00 for it. So the value of that asset would be the $25,000.00.
    Many people think the value of their assets is what they insure them for or what they paid for them or what it would cost to replace them. No, it is the market value or auction value of the assets if you had to sell them right now. The answer is your assets are not worth very much at all, with the exception of your home.
    andromeda143
    3rd Apr 2015
    11:49am
    After reading all the other comments on this page and thinking more about it, I agree that including the family home even at a threshold is fraught with difficulties. Certainly it would have to be locality specific, perhaps indexed according to average home values in the town or city. Account would also have to be taken of people whose home had appreciated in value only due to market circumstances and had nothing to do with their use of super investments.

    Perhaps it would be all too difficult. Perhaps the best solution would be to index every pensioner's age pension as , say, 70% of average politicians super pension. It would be simpler and fairer.
    TREBOR
    5th Apr 2015
    11:48am
    Perhaps it would be all too difficult. Perhaps the best solution would be to index every pensioner's age pension as , say, 70% of average politicians super pension. It would be simpler and fairer.

    I'll go for that...
    Young
    3rd Apr 2015
    11:52am
    Finally we have a government warming to the issue of looking at wealthy retirees who claim pensions.Pensions must not be for the needy.Too many wealthy people are ripping off the present system.We need bipartisan action immediately.
    OnlyGenuineRainey
    3rd Apr 2015
    5:19pm
    No, Browny, they are NOT warming to the issue of looking at WEALTHY retirees who claim pensions. They are looking at hitting the responsible, hard-working lower-middle class and working class who struggled and sacrificed for a lifetime to be just a little better off than full pensioners - while the many who manipulated their assets or spent freely living the high life continue to draw on the public purse, and the real wealthy continue to get the huge tax concessions on superannuation and negative gearing.

    Pensions were never intended just for the needy. We paid a levy to fund our retirement just as workers today put money into super. It's not our fault the Government took those funds and squandered them. And it's not any retiree's fault that falling investment returns have destroyed their careful retirement plans.

    That said, I agree with prioritizing the needy, but we also need to allow people to enjoy a fair reward for being responsible and hard working and making huge lifestyle sacrifices to accrue a nest-egg for old age. It isn't reasonable to push those with modest assets down to the same or lower standard of living as full pensioners. And it isn't sensible to punish responsible people and reward those who don't attempt to make provision for themselves. (Though I recognize that there are genuinely needy people out there and I 200% support ensuring they are properly looked after first and foremost, ahead of all other spending priorities.)
    TREBOR
    5th Apr 2015
    11:51am
    Lots of good points Rainey - especially the reality of the levy (or levies) from before I was born, for the upkeep of social security. there are many who deny that.. they are wrong and a pension IS a right, bounded by rules. At this time, some of those rules need to be tightened up to prevent people with way too much getting a freebie.

    You are correct that a person/couple who've worked hard to accumulate a little in retirement should not be punished for doing so. It is not that demographic that needs to be reviewed.
    Young
    3rd Apr 2015
    11:54am
    I meant pensions should only be for the needy.
    particolor
    3rd Apr 2015
    5:38pm
    Us Serfs Understood Browny !! :-)

    3rd Apr 2015
    11:54am
    Prior to "possible" approval of this new superannuation legislation, I believe the government should wait until all the old people die so they are not adversely affected by these changes.
    TREBOR
    5th Apr 2015
    11:53am
    Wow! Have they set a date? Is this Logan's Run?
    Mike
    3rd Apr 2015
    12:04pm
    I read an article in the SMH that our treasurer, Mr Hockey is claiming $288 for travelling expenses for every day that parliament sits, despite the fact that he only travels around the corner and stays in a $1.5 million mansion in Canberra that is in his wife"s name. Thus Mr Hockey, a multi millionair, is gouging every cent he can from the public purse for himself, but wants to hit the elderly and pensioners to save money. Disgusting.
    Polly Esther
    3rd Apr 2015
    12:44pm
    aka, Al Capone ?
    particolor
    3rd Apr 2015
    2:54pm
    Havana's Aint Cheap Sol !!
    Kato
    3rd Apr 2015
    3:10pm
    And they can claim rent as well .
    particolor
    3rd Apr 2015
    5:24pm
    Out of Pocket Expenses ?
    TREBOR
    5th Apr 2015
    11:57am
    They all do it - what is bizarre is that the same politicians are the first to rubbish those filthy unemployed out there - who have to survive a WEEK on that daily amount.... and pay rent etc doing it.

    This is an area of Entitlement™ that really needs to be changed and receipts expected as a matter of course. It is bizarre that a politician can reap AWE in expenses tax free when nobody else even gets close, and can then super hoard salary at a prolific rate, something nobody else even gets near out in the real world
    TREBOR
    5th Apr 2015
    11:58am
    Oh - that is precisely why they will never change the rules for super for the Big End - they themselves are right up there and hoarding into their super as fast as they can put it in, since they don't have to spend salary to get by.
    the white rat
    3rd Apr 2015
    12:40pm
    hold on, someone said ''you can get 5% on $200,000 what planet is that person from, must be la la land at the moment you can get at a maximum 3% and that will be reduced further when the official rate is educed next Tuesday and as for having your house included in your assets is just madness where would you get the money to live on for day to day expenses plus food, the only way to fix the system is to have a national aged pension scheme, where you pay a % of your wages in to it before tax, that way you would paying for your own pension when you retire, and the government would have use of all that money going into the government coffers .

    jim
    TREBOR
    5th Apr 2015
    12:14pm
    Invest wisely Jimbo - just a general figure I came out with - under normal circumstances - soon to return to us - 5% is a fairly reasonable rate for investing a lump sum over a certain amount.

    Not that long ago you could get 8% for an investment over $100k or so..

    http://www.infochoice.com.au/banking/savings-account/term-deposit-interest-rates.aspx

    Rates are low at the moment same as everything else - but expected to rise again. However there are returns of 'up to 7.4%' available if you want to invest in the loan sharking business.....
    TREBOR
    5th Apr 2015
    12:17pm
    We already pay levies for social security, but it has vanished into consolidated revenue instead of being quarantined from the grasping hands of politicians of all colours... who now seek to deny that those levies ever existed.

    Your idea is the same as mine (you little old socialist, you!) with the proviso that the funds be quarantined.

    I apply the same rule to all other funding, BTW - the time of 'consolidated revenue' to feed every politician's wet dreams of social equality, privatisation and so forth are long gone...

    Funding from fuel etc should be quarantined for use in roads etc.
    rtrish
    3rd Apr 2015
    1:17pm
    $100,000 and $150,000 are too low; what is ACOSS thinking? Not possible to live on the income from those. The savings would quickly deteriorate and put people back onto the full pension. Plus, the bank changes being considered by the Federal Gov't are going to add extra fees to savings and deposits, so that's another impost. When, oh when, is the Government going to get the picture that they need to target the RICH?
    particolor
    5th Apr 2015
    1:53pm
    In the Year 2525 ! If man is still alive !! :-)
    Gwenwiver
    3rd Apr 2015
    2:00pm
    At the same time as looking at looking at tightening the part-payment eligibility of this minority group of pensioners the government and the opposition could look at their own generous lifetime pensions and lead by example. One of the possibilities is that they wait until they turn 70 to touch their pensions. In other walks of life if you lose your job at an early age you are not allowed to dip into your pension. You have to apply for other jobs.

    http://www.dailytelegraph.com.au/news/nsw/politicans-enjoying-generous-lifetime-pensions-agree-other-australians-should-have-their-superannuation-taxed-more/story-fni0cx12-1227288460670
    TREBOR
    5th Apr 2015
    12:20pm
    Agreed - there is zero need or justification to feed an ex-employee for life, especially after he/she has been sacked for poor conduct of affairs of state.

    Nobody else gets that largesse, and besides - politicians are only short-term, casual, contracted employees with a possibility of renewal - not a guarantee of income for life.

    They can go on the dole same as everyone else, and any support they are given cuts out immediately when they get a job.....

    As for their super - it needs to be restricted to the same rules as everyone else and funded from investing in a private fund and not just the never-ending public purse fund.
    sunny boy
    3rd Apr 2015
    2:07pm
    Food for thought ... ?

    The Cricket World Cup Final attracted 93,013 attendance at the MCG the other day where the game was played in full view of that audience .... to all intents and purposes, in accordance with the Rules of the Game! ... and overseen by the referees!

    As a Nation we love our sport and are highly regarded World Wide - SO - how come we tolerate Governments (of all political colours and times) who shaped such "shoddy" sets of rules pertaining to our welfare ??!! ... and ... in this instance so skewed !!

    Fair comment ? ... anyone ? ... or is "fair" just another rubbishy "f" word ? ... :-) ...
    worker
    3rd Apr 2015
    2:18pm
    Still the MPs look to kick pensioners ,whereby savings to the Australian citizens can take place by NOT PAYING PENSIONS AND OTHER SO CALLED PERKS TO MPs at all levels of Goverments when they are no longer MPs.

    former MPs should be like all other workers and not receive pensions or other perks when they are no longer employed, they should when losing there job (MPs) line up at Centerlink like others
    particolor
    3rd Apr 2015
    3:00pm
    That's no way to treat former ROYALTY !! :-(
    particolor
    3rd Apr 2015
    3:03pm
    You'll have the Roth of Snobbery down on You !! :-)
    Chrissy L
    3rd Apr 2015
    2:37pm
    What planet does these people who come up with these type of asset levels live on? For a modest lifestyle these days an income of around $33,000 pa is required. This is often made up of an income stream from Super and a part pension. If you have around $300,000 in Super and you have to live on that for 20-25 years after retirement at say age 65, there is not going to be a whole lot left before we fall off the perch!

    Perhaps Mr Abbot and Hockey need to do some serious constructive work about getting more Tax from the Global Multi-Nationals and large mining companies, drawing huge profits from Oz before they look at the Pensioners.
    Radish
    3rd Apr 2015
    2:49pm
    I see where the Independent Senator Leyonhjelm wants the family home included in the assets test. He can kiss his .........goodbye at the next election.

    However, I agree entirely with the comments made by Jeff Kennett this morning on TV that a special body (apart from politicians) should be set up to do a review of the superannuation system and that there should be bi-partisan agreement by the politicians on the final outcome once the review is done and concensus reached.

    I also agree that there should be no retrospectivity for those who are currently retired whether they be on the aged pension, part pension, or fully self funded.

    From then on the superannuation rules should NOT be changed at all which will give certainty for those coming behind us. They will know things will stay the same and they can do their retirement planning.
    rtrish
    4th Apr 2015
    9:18am
    Radish, you have made a good point about no retrospectivity.
    TREBOR
    5th Apr 2015
    12:24pm
    Perhaps they could re-birth A Man Named Vanstone to tell us all how much we are getting for nothing.....

    Something wrong with the water in South Australia......
    Muggsey
    3rd Apr 2015
    3:34pm
    We too fall in the range of losing just on $10,000.00 per annum if Assets are lowered to $150,000.00 for a couple , just as we arrive at Pension age (thanks for nothing) been paying tax since we were 15 years old, ACOSS is obviously not able to some modelling to see the devastating effect these lower levels will have on couples like us, surely any proposals like this will need to be phased in like the increase in pension age. It is simply not fair to introduce a change in the rules to our disadvantage without warning to maybe enable a better strategy to be employed at a much younger age. In the event these changes take place I would suggest Pensioners get better organised to form a voting block to force a fairer system ,we would rather vote for an independant who can assist in preventing legislation passing rather than the majors, who may decide to agree to implement ACOSS's suggestions to our detriment.IN short leave the average pensioner alone and concentrate on the rich ,and maybe stop some of the overseas aid going to countries such as the ones who we all know have no regard whatsoever for us !! (Indonesia alone would account for over 6 Billion in the next ten years).
    Muggsey
    3rd Apr 2015
    4:07pm
    Agree with Radish re "no retrospectivity" ,any changes should not adversly affect anyone born prior to 1965, and gradually phased in after that,it is simply not fair to do other wise.
    Judy in the hills
    3rd Apr 2015
    5:08pm
    To start with we should be reducing pension type payments to those with houses and assets that can and should be sold to finance their retirement. If one has a big expensive house it can and should be sold and the money used to buy something more suitable for a single person or husband & wife or similar family arrangement. This holding onto an expensive mansion and expecting the government to fund one's lifestyle is not right. The younger generation have a life to lead and jobs to hunt for so they can fund their own lifestyle, whatever it is. They should not rely on an inheritance - not one subsidised by the general public. One just doesn't have to live in the same house all one's life - sell it and move to something more suitable for your age and income. The government should be looking to penalise those with huge incomes and huge superannuation funds - they do not NEED government assistance of any sort. In places other than Sydney where homes are obviously overpriced, most of us could live quite comfortably in something in the $400,000 to $500,000 range. If you home is worth more than that and you are running short of cash - sell it and buy something you can afford without losing sleep. BUT those at the top of the income levels you don't need added assistance of any sort. This especially includes ex politicians who are still dipping into the public purse for transport, travel and other assistance when they can well afford to pay their own way.
    OnlyGenuineRainey
    3rd Apr 2015
    5:36pm
    So, I worked 60 hours a week, never had holidays or nights out or nice clothes, sat up all night sewing for my kids, and helped hubby build a home and furniture on weekends and days off so we could enjoy the nice home we EARNED the hard way in our later years, but I should be forced to sacrifice that hard-earned comfort? Meanwhile X, who gave her kids $600,000 before turning 60 so she would get a full age pension (while her kids pay all her bills) and Y, who inherited $500,000 and spent it travelling around the world, and Z who put all the family wages through poker machines, live in public housing or get rent assistance and a full pension.

    NO, Judy! That's NOT fair or reasonable, and it's NOT in the country's interests to punish responsible people who work hard and are frugal. They DESERVE that higher level of comfort.

    Retirees have already sacrificed a lot for the younger generation. There has been a huge wealth transfer from the old to the young via interest rate falls and lower returns on investments (which have assisted those who are paying off loans). Those who battled hard to achieve a modest level of comfort in retirement should NOT be punished for their efforts. It would be socially and psychologically devastating to many to have to leave their family home and likely move to an area where they have no friends, are maybe far from family etc., and have none of the familiar conveniences they enjoy.

    I agree that changes need to be made, but they should target the wealthy - those at the top - and those evading tax - not those who worked and sacrificed for 40+ years to achieve a modest level of comfort in old age.

    If there is any consideration of including the family home, the allowed threshhold should be at least $1 million. Even that might be too low in capital cities where real estate is very valuable. And it should be indexed to real estate value growth. People who slogged their guts out for 40 years to own a home should be allowed to enjoy it, AND pass it on to their heirs. That is what they worked and sacrificed for, after all. Why should those who choose to live it up be permitted to enjoy their lifestyle of choice while those who choose to save and invest are not?

    I applaud and support measures to ensure the needy are priortised, but that can be achieved by taxing the rich fairly and tackling tax evasion. There is no need to punish responsible retirees who worked hard and sacrificed to achieve modest comfort in old age.
    MITZY
    7th Apr 2015
    3:22pm
    Judy....Those with multi-million dollar home(s) investments and super should not be on the age/part age pension. However, middle income and lower income individuals and families should not be denied a part pension or forced to sell the one and only home they have lived in and worked hard for all their lives.
    It's not just forcing people to sell their home to fund their retirement, you are taking away from them the neighbours and friends and their outdoor activities (i.e. golf, tennis, walking, etc.) They chose to live where they do many decades ago, they chose it for the lifestyle attributes to the area, they built up relationships with friends and neighbours, why would they want or should need to sell up and move to somewhere else that is "alien" to them.
    Let the accumulaters of wealth with much more than the home they live in and over generous tax concessions from trusts, super and tax concessions from negative gearing, cough up and pay their own way in retirement. After all these are the folks that have taken advantage of the current and past tax systems. The likes of middle and lower income taxpayers paying their taxes through the PAYE system should go "untouched" for their generosity.
    MITZY
    7th Apr 2015
    4:34pm
    I doubt the one and only home we own during a lifetime of hard effort to attain it, should be included in the assets. After all people have to live somewhere and you can't saw off a bedroom for instance and sell it off to pay for your food etc. When I leave this earth, I have no immediate family to leave my assets to (my home/contents and a 2000 Nissan Hatchbackj) but if I can't look after myself I will have to probably sell my home and use the funds to gain a place in a nursing home (heaven forbid). I retired early (age 55) in 1996 with $8,000 super. Only had it from when it was introduced in the Keating era at 3% of salary. My husband had to retire at the same time (age 55) due to Multiple Sclerosis (MS). Unable to continue working. He worked for himself (no super). Without going into a whole lot of catastrophies that befell him and myself he had 24 years with MS before his death. We had savings which only gave him and myself eligibility for a part disability and carer pension and with all the health/mobility items required we couldn't exist on those two half pensions and gradually our savings dwindled to the point where we were reassessed for the full pensions. Then of course I had to live on a single age pension instead of the married disability/carer payment and allowance. I own my own modest single level duplex unit in a country area in NSW and manage on my single pension to feed, clothe, pay all my utilities, insurances, strata fees, car/home maintenance, personal items etc. There is around $50 to $100 cash left each month and if I end up having to pay out a large amount (as I did middle of last year - $3,800 on a new head for the car) then it takes my meagre savings to pay it and half a year to recover the outlay to replenish that small amount for the next catastrophy. I am healthy and exercise and eat well, don't drink, never ever smoked, never ever put money into any forms of gambles. My next move, if it becomes necessary will be to take out a reverse mortgage to pay for these unforeseen items and keep living like I presently do.
    If the government makes life much more difficult for me to cope by moving the goal posts and reducing the way pensions are "increased" twice yearly, or puts legislation in place to include the home as an asset and reduce pensions accordingly, they will HEAR ME ROAR FROM THE FAR SOUTH COAST OF NEW SOUTH WALES TO THE BOWELS OF PARLIAMENT HOUSE IN CANBERRA!!!!!!
    Gwenwiver
    3rd Apr 2015
    5:34pm
    Do couples who have one person who worked and paid tax and one who stayed at home get the same pension as couples who both worked and both paid taxes?
    OnlyGenuineRainey
    3rd Apr 2015
    5:40pm
    Yes. And if a couple NEVER worked at all but lived on the dole or a pension for their whole life, or if they frittered away all their money gambling, drinking, or taking world cruises, they still get the same pension - in fact they typically get a lot more than those who worked hard, paid taxes, and made huge sacrifices to save a little for their old age. Not much incentive in the system, is there? And what incentive there is, some people want to totally remove.
    particolor
    3rd Apr 2015
    5:41pm
    Of Coarse ! Unless You are BOTH POLITICIANS !! When WOO HOOO !! :-)
    TREBOR
    5th Apr 2015
    12:38pm
    Tending the home fires is a job in itself... and was once considered a valuable and worthy career...

    I say again - I recall not one person in my day ever suggesting that grandma and grampa did not deserve a pension, and we were happy that our taxes paid for it.

    For those who criticise the unemployed etc - I take it you are offering jobs... enough offers and maybe we could get rid of the 800,000 unemployed into work, and then we can start on the partially employed and bring them up to scratch....

    Not many people actually choose to be unemployed and permanently poor.....

    All it takes is the will...
    Chris B T
    3rd Apr 2015
    6:39pm
    ACOSS repersentitives should explain how the changes would affect them in anyway when they draw down there superanuation, likewise politicans.
    The ones orchestating these changes will not be affectted.
    They may be caught out with super changes (Highly Unlikely).
    True Repersentation With Real Pensioner's, Self Funded Retiree's At Low and High Part Pension. Real Debate with an open mind not cloesd.
    The removal of Supplement we only hurt the least of us.
    OnlyGenuineRainey
    3rd Apr 2015
    7:44pm
    You can bet the changes are carefully designed not to hurt wealthy bureaucrats, politicians and senior executives (like ACOSS reps) at all. They also won't hurt the cheats who manipulate the system for unfair gain or the irresponsible who squandered their money knowing the taxpayer would look after them in later years. Just those of the hard workers and battlers who have struggled to achieve a modest nest-egg of savings in the hope of enjoying retirement. I suspect those who are genuinely needy through no fault of their own are a small minority, and I won't hold my breath waiting for them to reap the benefits of unfair policies.
    Chris B T
    4th Apr 2015
    1:18pm
    Rainey
    What is your point, you say one thing about the higherend earner's ,middle earner's
    low earner's and those who passed through without paying.
    At every level there is manipulation and cheats.
    There wasn't a level Starting Point. For social security (dole,disability,etc) but
    age pension had variants earlier than most can remember. Superannuation had
    many and varied starting points with advantages for higher income earners.
    I wouldn't say the genuinely are a small minority as you put it on the pension.
    Discretionary spend was the method and still is more so.
    I'm saying have those most effected by changes to be present and represented
    Not the ones, not affected by changes.
    gillygally
    3rd Apr 2015
    7:10pm
    It's about time the govt. looked at all religions earning huge profits from business interests and paying no tax. The rules for tax exemptions need to be changed. Leave pensioners alone and go after the real money.
    Young Simmo
    3rd Apr 2015
    7:26pm
    Wow there seems to be a lot of greedy people around. I reckon if you own your own home, boat and caravan, you shouldn't get any pension till your super and cash savings are down to $50,000.
    Pensions are for those that need it, not those that grab it.
    OK I have put my hard hat on, let it rip.
    Parti, I just know that you will back me up.
    OnlyGenuineRainey
    3rd Apr 2015
    8:11pm
    Great idea, Young Simmo! Make all the hard working savers who tried hard to provide for themselves but couldn't quite make it blow all their cash long before the end of their lives and live out their old age in poverty while we give generous handouts and public housing to irresponsible people who blew their healthy incomes on expensive holidays, clothes, nights out, gambling etc. or manipulated their wealth (e.g. gifting it to kids before they turned 60) so they could get maximum pension benefits.
    We need some incentive in the system, and people who work and sacrifice and pay hefty taxes SHOULD be better off than pensioners. They ought to be able to keep a reasonable amount of their hard-earned money without suffering disadvantage. After all, the big spenders got to have their fun in earlier life and now take taxpayer handouts. Why shouldn't those who went without in earlier years enjoy the fruit of their efforts?
    If the pension was only paid to people who are genuinely needy through no fault of their own, I'd agree with you. I certainly support measures to ensure the genuinely needy are looked after first and foremost. But half the pension recipients could be far better off than many self-funded retirees if they hadn't chosen to live the high life earlier. It's grossly unfair to reduce those who worked and sacrificed for 40 years to ensure their retirement would be a little more comfortable the reward they have genuinely earned, while indulging others who are, realistically, less deserving.
    Nevagiveup
    4th Apr 2015
    4:30pm
    I agree with you Young Simmo, the lucky rich pensioners are like politicians, all take , no give. I say lucky because a lot of us never really had the opportunity or encouragement to save for super.
    In another 30 or so years it will be different, as every body will have worked all through the compulsory super environment for all their working life. Having said that I wouldn't swap my life period from 1940 to 20 something. Overall I reckon we have probably had the most adventive, progressive and exciting time in history.
    particolor
    5th Apr 2015
    2:04pm
    Simmo I don't think anyone should get the pension until the heels are out of their last pair of socks and their Bum is showing through their trousers !! Well ! that's what Joe thinks anyhow !! :-)
    Young Simmo
    5th Apr 2015
    3:00pm
    Parti, with a bum the size of Hockey's, it is new bigger chairs that he needs.
    You could probably apply the same reasoning to his brain.
    Gee Whiz
    3rd Apr 2015
    8:51pm
    Constant political interference with superannuation is driving people away from what once was the ideal way to save for retirement. Not anymore.

    Over the last thirty years every budget ever delivered has made changes to super in some shape or form. Now they have even removed the safeguards that kept rogue financial planners away from retirees superannuation.

    Its as if they didn't want people to invest in super as every year it gets harder and harder to understand the rules and the incentives get less and less.

    This proposed new asset base will push people to divest themselves of their savings and go onto the full ,pension.

    Politicians " stupid is as stupid does".
    Paulodapotter
    3rd Apr 2015
    11:11pm
    Not if I can help it! I'd rather become lost at sea than try to live on the pension. I'd much rather be filthy rich and very unhappy.
    OnlyGenuineRainey
    4th Apr 2015
    8:41am
    I know of many who have done that already, Gee Whiz. They divest to the point of qualifying for at least a part pension so they get the benefits. Neighbors sunk $1.5 mil into a house and gave $1 mil to their kids before they turned 60 (so it's not counted in gifting provisions) on the condition that the kids pay all their rates, insurance, electricity, gas, yard care, cleaning, home maintenance, health insurance and car expenses for the rest of their lives. Now they draw a full pension and live it up, with only food, clothing and recreation to fund out of their pension.

    The proposed changes will only provide stronger incentives for people to plan this way, or to take out lump sums and spend to reduce their assets below pension limits. Meanwhile, I'm seeing no suggestions of changing income limits that allow couples to earn nearly $1500 a week before losing their pension entirely. Why? And how much support are the Greens getting for their very sound proposal to change superannuation taxes so that the very rich don't get such hefty concessions at the expense of battlers, who get virtually no benefit.
    particolor
    5th Apr 2015
    2:11pm
    Paulo.. A container Ship just rescued a Man lost at sea ! He lived on Fish and Pancakes for 2 Months ?? Sounds good to Me !! :-) Id love some Expensive Fish with My Pancakes !! :-)
    TREBOR
    5th Apr 2015
    3:17pm
    It may well be the ultra-socialist of either left or right's concept of reducing the majority under the despotism of poverty so they have little to no power and will eat a S#it sandwich to stay alive... perfect for the Big Boys!

    I live near Eden - you can't buy locally caught fish here - it is 'global economied' in bulk to Sydney, then we get to buy it back at value added for a fistful of dollars. The local club's restaurant can't access fresh caught fish 'off the boats' any more, which was one recommendation I offered them to improve.

    I'll be glad to see the overbearing centralised world government .. oops ... the kindly and beneficent global economy.... disappear over the horizon again and back to where it belongs.... on the scrapheap of history.

    Then we all might get a chance to prosper again. Never thought I'd side with them hippies protesting in Canada all those years ago.....
    OnlyGenuineRainey
    4th Apr 2015
    8:22am
    Here's some food for thought for those who work on assumptions and don't think carefully about the real numbers. If a couple retires at 65 with $780,000 in income-returning assets (and they would need at least another $100,000 on top for cashflow needs and in car and furniture assets etc.) and the income-returning assets are returning at 5.5% (much higher than bank interest, but a level of return that incurs fairly low risk), and CANNOT receive any pension benefits, their income in the first year of retirement would be $34,800. By age 69, that would drop to $29,489 and remain at that level until age 90, by which time they would have nothing left of their nest egg.

    Now, $34,800 is considerably LESS than the aged pension for a couple and when pension benefits are counted, it becomes quite a lot less. $29,489 would render the couple poverty-stricken, and force them to live on capital which would rapidly reduce their superannuation balance to the level where they did qualify for a pension, and thus quickly eliminate any savings the Government expected to make from changes to the asset test.

    For a retired couple with $780,000 in superannuation, earning 5.5% pa. return, to achieve a less than ''comfortable'' lifestyle income of $56,000 per annum, they would have to receive the currently payable part pension ($17,600) from the second year of retirement.
    This is based on a calculation done by ASIC, and it does not factor in adviser, management or accounting and audit costs (which can easily run to $6000 a year).

    It's easy to get carried away with envy or to look at a theoretical bank balance and think it's a lot because you have much less, but the reality is that many of those who have less are in their current situation because they chose to spend more freely in their working years. Now they claim others who chose to save more aggressively should live in poverty and erode every cent they saved, while those who chose to spend more freely live off the taxpayer.

    I'm sympathetic to both arguments. I believe the needy should be provided for first and foremost. But more than half our pensioners are needy because of the lifestyle choices they made. Is it reasonable that we reward poor lifestyle choices and punish wise ones? Is it fair that those who made wise choices should have their lifestyle - after years of saving and planning - reduced to the same level as those who didn't? Remember that many of today's retirees are retiring on their own savings from income they paid tax on - NOT on employer-funded or concession-taxed superannuation. If we are going to strip them of all that they've worked for, why shouldn't we also assess pre-retirement income and lifestyles and strip those who obviously spent freely or gifted money of their pension entitlements? (No, I'm not seriously suggesting that, but some here seem to think it's fine for the less responsible to have it both ways but the hard-working and frugal should be denied the right to enjoy the rewards of their efforts.)

    We need to find some level of balance that respects and encourages responsible financial planning and management, while still keeping the system affordable and ensuring the genuinely needy are properly looked after. That means, first and foremost, indexing the pension fairly - at least to the Pensioner and Beneficiary Cost of Living Index and not the CPI. But we currently DON'T spend a great deal on aged pensions in comparison to other nations and the aged pension IS currently affordable. As more people retire with superannuation and savings and most likely with more inherited wealth, the total cost of paying pensions will gradually reduce.

    Knee-jerk reactions now could well increase costs in the long term rather than reduce them. For example, if you support someone who is forced into early retirement due to ill-health for a couple of years so they don't have to touch their super until age 65, they might be able to self-fund their retirement. But if you force them to draw it out before age 65 to survive, that might make them reliant on a pension for the next 30 years.

    It's a very complex calculation to find a sensible balance, because you have to factor in changing investment climates, inflation, changing lifestyle needs, changing health requirements, changing life expectancy, and other factors that can't be accurately predicted. There needs to be a detailed review of retirement funding, but the starting point needs to be realistic and respectful of the true facts and the rights of those who have been hard-working and frugal to enjoy some reward, so that we retain incentives for people to at least try to provide for their own retirement.
    Muggsey
    4th Apr 2015
    3:52pm
    Thanks for your detailed example, I have just written to my Federal Member and encourage all who have responded here to do the same , it is only this type of pressure which will prevent Legislation such as the ACOSS proposals to pass ,after more than 50 years as a PAYG worker I will change my vote from Lib's to even the Green's if they promise to oppose the ACOSS recommendations, As we all know there are many other ways to make saving's without robbing Pensioners of their meagre existence .
    TREBOR
    5th Apr 2015
    12:48pm
    You are correct, Rainsey - it's one thing to have assets and another to have income-returning assets - and income-returning assets need to be sufficient to give the equivalent of the pension.

    If you read my blurbs - I've discussed the difference between the actual amount of pension and the cut-off point for receiving pension - for a couple pension is around $34k, but cut-off point is around $50k when they have income from work or assets.

    It is the upper point, in my view, of combined pension and income, that should be the baseline - and that - on the same reasoning - cannot include such assets as home. You can't eat a home.... (image of the stock in Gingerbread Housing Inc going up). i.e. pensioners/retirees should have nothing considered until they reach that cutoff.

    $50k these days is not much. I said to our newsagent some years ago that you'd need $2m in the bank earning interest to get by .. he laughed - now it is a stark reality.
    Cap
    6th Apr 2015
    10:47am
    If ACOSS think that a retired couple with $800,000 of assets of which probably $750,000 is in super are wealthy, living on $37,500 per year (750000* 5%), then ACOSS should then also suggest that all welfare payments (childcare, family payments A & B etc,) should be stopped when a household income reaches that amount. Why pay people who earn 2 or 3 times that amount welfare. Just doing that would put the budget back into the black real quick. Then there is the great tax avoidance of negative gearing, if that was stopped and people with investment properties could not claim for interest, rates, depreciation etc. but paid tax on the income they received, maybe there would be so much money rolling into the Government coffers that they may be able to increase the pittance they pay Newstart and Pensioners.
    But that would never happen as to many Politicians own investment properties and they could never disadvantage themselves.
    Gee Whiz
    4th Apr 2015
    9:40am
    Well put Rainey. A well written and researched letter.

    We saved all of our working lives and paid taxes. We succumbed to the governments push for everybody to pay into super believing they would honor their commitment to incentives for those who did. We converted most of our savings to Super.

    We had just enough in Super when we retired to get a small part pension. It gave us an income of just enough to live on without having to visit the soup kitchens.

    We followed all the government rules and regulations to fund our own retirement and avoid being too much of a burden the welfare system.

    Now they want to change the rules again and take away the incentives they promised for those who invested in super.

    I sometimes wonder if it was all worth it.

    I know people who have a little money stashed in the bank and a few share market investments. They get the full pension and live very nicely thank you.

    I just wonder how much longer Superannuation will be an alternative retirement plan when the government constantly puts up road blocks that removes the incentive to invest.
    Chris B T
    5th Apr 2015
    10:16am
    The earnings on money in Banks etc are income taxed. Treated by deeming rules, capital asset tested depending on where you are on differring retirement schemes and pension entilements (full or part). Tax file no connectted or withholding tax applies. Most of this money was earned at the full tax rate of the depositor.
    So how is the earnings on tax advantaged super schemes not taxed.
    Especially at the ridiculously high earnings at which some have in capital.
    Some of us where very restricted in placing extra funds in eairlier years of super the power of the compounding interest is time.
    Handyman
    4th Apr 2015
    10:30am
    I am dismayed that the finishing line might be moved after the race is almost run!!!

    Are we going to discuss politicians pensions next?
    Gee Whiz
    4th Apr 2015
    12:30pm
    I would dearly like that to happen Handyman, and watch as they tried to explain away their bare faced theft of taxpayers money.

    The only thing missing from a politicians greed is a pistol, a mask and the cry of "bail up this is a robbery".
    particolor
    4th Apr 2015
    1:29pm
    And Worse !! :-( They still want to Carry On like the Three Stooges after You Sack Them !! :-(
    WayneD
    4th Apr 2015
    2:27pm
    I worked most of my working life in a factory, and we had no superannuation, no one evwn talked about it. I was very happy when composary super came in. Then I had an accident and could not work and went on DSP. My car was lost in the Black Saturday fires, and I was able to use what super i had to buy another vehicle. Insurance didn't cover my car as it was an old one. I didn't have much super, enough to get a reasonable vehicle. I am now on the Age Pension, and own my home. Valued at around $250,000, it's an eighties house in the country. I had a stroke two years ago and had my licence taken because I lost some vision and Vicroad's said I could not drive.
    I now rely on Taxi's to get around. They are terrible. I have missed appointments and had to wait for over an hour for them. I even had to accept a lift from a worker at the community centre to get home once when the taxi did not turn up.

    If my home was included in the Age Pension accesment I would be very hard up indeed.I go out once a week for medicines and some shopping, the rest of the time I'm at home.
    I keep in touch with the world over the internet, and if I didn't need to go to the doctor and hospital visits now and then by community car, I would be house bound like my mother, who I look after.

    I am not rich, far from it, and the home should not be included for any accesments.
    Young Simmo
    4th Apr 2015
    4:41pm
    WayneD, I can relate to everything you have said and mate, I can say you are no orphan with you life circumstances. Unfortunately there are a lot of very narrow minded commenters in here that can only see one side of a story.
    I won't name names but they are easy to pick out. Maybe when they jump in here to shoot me down, they will name themselves.
    TREBOR
    5th Apr 2015
    2:56pm
    Fully relate - had much the same experience myself accompanied by asset stripping in my late forties via divorce etc... left with nothing and then booted out of a job and sidelined with illness, injury from age fifty or so.

    It's not always a bowl of cherries out there, and some should realise that instead of finger pointing at the 'bums' with no super. I've got a little now from my retirement years job... not much... but if compulsory super had been in all my life, I'd have a lot more - since I always worked hard and earned a lot.
    kentucky
    4th Apr 2015
    4:16pm
    Do you realize your super balance becomes an asset once it goes into an allocated pension.
    If you use the $250,000 figure for married home owners Davymac and your super balance is the same or more you already will not qualify for the age pension. So to add your car,boat caravan furniture etc:-you are going to be in deep poo when you may be able to get 3 - 3.5% interest on your $250000.Could you live on $8125.00 a year i think not.
    Handyman
    5th Apr 2015
    10:27am
    As was said in an earlier post

    " In another 30 or so years it will be different, as every body will have worked all through the compulsory super environment for all their working life."

    Do you really believe it will be any different...

    There will be another reason to raid taxpayers super savings by then.
    TREBOR
    5th Apr 2015
    3:01pm
    Trouble is that inflation will render the majority in still the same relative position in thirty years - part pension is the best that government could hope for, and unemployment is set to continue rising..... you can bet on that as the global economy turns turtle and petroleum vanishes and The Greatest Depression is upon us for true... (it forms part of my book series on WW IV - Fem War II).
    the white rat
    5th Apr 2015
    2:34pm
    so what if we all become pensioners at least in the uk every person gets an aged pension once they reach 65, they have paid for it through the national insurance scheme

    5th Apr 2015
    5:14pm
    ACOSS suggesting $750,000 cut down from $1.1 million. Sounds reasonable to me. Read of some wealthy folk manipulating their financials so can get just $1 pension in order to get concession. Sheer greed in action.
    Chris B T
    5th Apr 2015
    5:26pm
    Years ago we "had a recession we had to have" high home loan interest rates. If you relocated for work requirements your home became a invester loan, to meet bank requirements you would notify them. At this particular time it was 2% more. Without the ability to add funds to my restricted super account I opted to retain my home as an investment.
    Practically over a 3 month period it rose to 28% for a bank home loan investment.
    Bankruptcy was knocking, (just avoided) The Home IS SACRED & Never Included in Asset Testing.
    The reckless mismangement by Our Governments who extract funds by differing Taxes should not be a burden on us with depleted services and pensions (full or part).
    To lead by example would not hurt, instead of the untouchables.
    Tax the high end earners and business at higher rates.
    Bracket creep only punishes the lower end.
    LEAVE OUR HOMES ALONE and assets at the same level to CPI increases.
    Fready
    6th Apr 2015
    4:18pm
    Chris BT -depending on what you consider to be "rich" the rich (by income) are already doing all the heavy lifting. The top 2% of taxpayers already pay 26% of all the personal tax collected. Only the top 20% (incomes above $200,000) pay any tax. Google "No, the rich don't pay a fair share of tax. They pay it all".
    In addition, the rich (salary above $300,000) pay 30% contributions tax whilst the rest pay just 15%. These are generally the people who got the best education, moved to where the jobs are (leaving behind family support) risked their capital, chased higher paying jobs, and will pay in their retirement for Government services based on their ability to pay. Why do we want to drag them back to those who never made the effort.
    If you increase taxes on companies you will throw people out of work.
    Do you realise that a retiree couple with a $2 million house and $286,500 in assets gets a full pension whilst a retired couple with a modest house worth $350,000 and $1,200,000 in assets gets no pension. This is a scam that has to be corrected. The family home must be included in the assets test. The limit would then have to be adjusted upward by say $400,000.
    People need to take responsibility for their own circumstances.
    Chris B T
    6th Apr 2015
    9:28pm
    So the "recession we had to have and restrictive as well exclusive superannution was my responsibility" I'm not Keating or a supporter of these outcomes. You say its my responsibility. How fast the blame is sheded down just how educated are you. Whitlim Gov Free University no doubt. Should get a refund, sorry it was free.
    You make no sense at all.
    There are very basic homes around Sydney that are worth more than that, it is where people have lived. So to up root them would only benefit State Gov's.Stamp Duty.
    I worked around Wooloomooloo in 1970s these homes were mainly attached terraces. Nobody wanted them, consider a slum area. The finger wharf where Crowe lives now worth $Mills there would be hundreds of similar. So by good fortune you are saying the people have to relocate. Where to, what part of Greater Sydney Area you suggest. What about other States that had similar areas.
    No one has ever stated at what point of Income You Are Rich.
    Tell me one company paying the taxes you are stating.
    Homes no matter the value should be included $1 to $mills
    I belive in Health Before Wealth and I do not live in Sydney.
    I live at a pollution free beach area with a modest home. ( Not in $mils )
    Chris B T
    7th Apr 2015
    1:40pm
    PS
    Homes shouldn't be included
    Chris B T
    7th Apr 2015
    1:52pm
    Fready
    Care to make a comment about.
    I would like to read some accurate and constructive comment on this blog rather than whinging and personal attacks.
    Your words. Fready
    Spirit Level
    6th Apr 2015
    8:55pm
    The suggested lower limits would not be a long term solution as this would soon bring down peoples superannuation/ allocated pension to a level where in a very short time one's asset levels would reduce to a level whereby they would become eligible for a full Age Pension thus negating any long term benefit .
    bookwyrm
    7th Apr 2015
    2:12am
    ACOSS are a joke, a doormat to the Govt.
    Pass the Ductape
    7th Apr 2015
    8:02am
    Stuff it! Just take the bloody lot Joe and give me back what YOU think I can manage on. If I can't manage, I'll rob a bloody bank with a gun - capture a few hostages - fire a few shots into the ceiling and live the rest of my life out in comparative luxury - in jail! How's that for a plan - you overpaid m---n!
    ozzie
    7th Apr 2015
    2:11pm
    Perhaps a little off the prime matter of indexation of Pensions. But there is a a lot of "noise & talk" about forcing Super to be used to "buy an income" (annuity or pension fund) of late. Isn't it strange how a Conservative Government on the other side of the World - the UK which has been "Pension-centric" for as long as Aged Pensions have existed, will, from today, allow Retirees to "cash in their pensions" up to 100%.....there are certain taxation considerations, but a retiree can take a "Lump Sum" of up to 100%....and then, effectively spend it on whatever they like. They still have to - rationally - set aside some for a "regular income".....but they are going from a "Pension only system" to a choice of "Private Pension/annuity" to a "Lump Sum" system......unlike in Australia where the "noise & talk" is about forcing Retirees to use their Lump Sum to buy a Pension??!! I wonder how our Governments - both Conservative - reconcile this odd difference between the UK & Australia ?? Or are we witnessing a "convergence" of retirement income between 2 well connected, historically, countries with opposing views to "retirement incomes"? There is a comprehensive article, video & links to the changes announced in the UK's last Budget at http://www.bbc.com/news/business-32194158
    Not Senile Yet!
    8th Apr 2015
    1:51am
    Acoss has tried to please every party or political view....except the retiree!!!
    Obviously some are more asset rich than others.....however ALL have paid their tax prior to investing in Assets!!!
    Whilst it may appear to be fair....it is still a penalty system that has NO Rewards built in for anyone.....it only looks at reducing the Government Outlay by restricting access thru penalty!!!
    This is aimed at the very people who have worked hard and paid their taxes which built ALL the public infrastructure for Future Generations.......they deserve better!!!
    Restricting 2.4 Million people from adding to the Economy is the core Fault with this plan!!!
    However if they changed the amount allowed to be earned by the Pensioner to allow for 1-2days part-time whilst collecting the Pension....that 2.4 Million could well afford Private Health Care and reduce the dependency on Medicare....not to mention the added tax collected through fuel tax on trips and GST on other money spent!!! Let's not forget...most pensioners are no longer saving....but trying to enjoy retirement.....thus most earned money would go directly back into the economy!!!
    To restrict them is to restrict their ability to contribute to Economic Growth!!!
    Not all would choose to do so and certainly not all might be able to!
    But if only 45% did retain part-time work for an extra 5 years or so....it would equate to ONE million paying extra GST, fuel tax and possibly ONE million less relying on Medicare!!!!
    Restricting income once on the Pension is out of date thinking that restricts people's choices un-necessarily.....better to remove the Victorian idea of setting a $ amount and replacing it with a restriction of 2 days or 16 hrs work!!!
    This way the retired stay in touch with the working world and stay active whilst contributing!!!
    The extra GST and Fuel tax along will contribute to their own Pension!!!
    All Family Homes should be exempt from the Asset Test regardless of the Political desire to include it!!!
    A simple Average Price for the Capital City or Town you live in would be far more appropriate as a LIMIT rather than including it!
    There has to be a LIMIT...Million Dollar waterside properties should not be exempt from the LIMIT set with regard to Pension Payments.
    However...a reasonable time should be allowed for people to downsize in their old age WITHOUT penalty!!!!
    Perhaps an agreement to forgo Stamp Duty may encourage more to downsize!
    Policies need to be more pro-active in encouraging and rewarding people rather than just a Penalty Only method of thinking!


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