Superannuation: changes to appease Liberal Party dissent

Softening of the proposed superannuation changes may be on the cards

retiree examining is superannuation or retirement income

As Malcolm Turnbull prepares to unveil his new look ministry a week after claiming victory in the Federal Election, Treasurer Scott Morrison appears to be back-pedalling on the proposed superannuation changes.

Under the most fire from sections of the Liberal Party is the plan to implement a $500,000 lifetime cap on non-concessional contributions, for which the contribution period has been deemed to commence in 2007. This means that any non-concessional contributions made since 2007 will count towards the lifetime cap of $500,000.

The measure, which is designed to stop the wealthy from using superannuation as a means of estate planning, is thought by several within the Liberal Party to have cost votes at the recent election. In order to ensure that the proposed policy remains, while fending off a revolt from within the party, Mr Morrison is said to be considering exemptions. These exemptions are expected to be along the lines of a woman putting her payout from a divorce and relatives placing money from a deceased estate into super. It is believed that proceeds from the sale of farming assets placed in super may also be exempt.

It is estimated that the exemptions would effectively wipe out half to 90 per cent of the $550 million savings expected from this measure.

However, the measure that will return the greatest Budget savings, reducing the concessional contribution cap from $30,000 to $25,000 will remain.

Although the Treasury has refused to comment on the possible exemptions, Prime Minister Malcolm Turnbull does appear to be softening his previous hard line when discussing the proposed changes. Despite pledging that there would be no changes to his Government’s superannuation plans, Mr Turnbull has indicated that he is listening to the rumblings within his own party. "The reforms are important, but in the implementation and transition, there is work to be done. There always is with tax changes. They will go through the normal cabinet and party room process.

"We are listening very keenly, I am listening very keenly and carefully to concerns that have been raised by my colleagues, and of course by other people in the community as well," he said yesterday.

One of his most vocal colleagues may be former Defence Minister David Johnston, who believes the Government has paid a high price for breaching trust. Speaking to Sky News, Mr Johnston said, "Trust is something that politicians have very little of and we've burnt a lot of it in this campaign. Moving the goalposts and retrospectively adjudicating people's entitlements is something that I think is repugnant to the way, particularly people in Western Australia, relate to Canberra."

It’s not only those within his own party that believe the non-concessional cap is effectively a retrospective change to superannuation. Last week YourLifeChoices reported that Ian Silk, Chief Executive of Australian Super had seen first hand the effect the proposed change was having on those saving into superannuation, with a jump in inquiries to the superannuation fund on how the changes would affect their retirement plans. "Because there is that element of retrospectivity it just feeds into the fears some people have about putting money into super," he said.

Read more at Heraldsun.com.au
Read more at TheAge.com.au

Opinion: Retirees plans in disarray

Retirement is supposed to be your reward for working hard, a time to take things easier and being able to do what you really want to, after years of putting others’ needs first. The reality, largely thanks to a flawed retirement income system is very different.

There are many issues with the country’s current retirement income system but possibly the biggest is that it favours the wealthy who receive the most benefit from tax concessions on superannuation and have the wiles of very clever accountants at their disposal to ensure every investment loophole is utilised.

This creates a disparity with those who have simply worked and saved hard all their lives, dutifully paying into superannuation, trusting the planners their banks have recommended and perhaps hoping that an Age Pension might just make living in retirement affordable. These are the people that the Government has well and truly shafted with its tinkering of superannuation, changes to the Age Pension asset thresholds and its refusal to lay any effective punishment on the big banks who continue to not act in the best interests of individuals planning their retirement.

I note with interest that it's the $500,000 non-concessional cap that is the focus of Scott Morrison’s apparent face-saving tweaks. I wonder how many people are ever in a position to put more than $500,000 into superannuation full stop, never mind as non-concessional contributions. Yet the measure that could potentially have the greatest benefit to those approaching retirement, the concessional cap, will be reduced from $30,000 to $25,000. The reduction by $5000 may not seem much but for those who had planned to use salary sacrifice to increase concessional contributions in the years approaching retirement, it’s huge. That extra $5000 over 10 years is $50,000, and with associated earnings and compound interest could amount to a great deal more.

The changes to the asset thresholds that are applied to the Age Pension and the doubling of the associated taper rate from $1.50 to $3, has thrown into disarray the plans of 326,000 retirees who are already receiving the Age Pension. These retirees will see their part Age Pensions reduced or even lost altogether come 1 January 2017 when the changes are implemented. But what about those who had simply based their retirement plans on the previous thresholds and had factored in a part Age Pension to the retirement income? Making up the difference in retirement savings will be nigh on impossible.

And don't get me started on the lack of bite that ASIC has when it comes to dealing with the big banks and their ever-increasing gang of rogue planners. With the banks seemingly operating a ‘move them on and don't tell anyone’ policy, ASIC is unable to do anything other than shake its head in disbelief when it has been discovered that financial planning regulations have been breached. A slap on the wrist is about all it’s able to do and the big end of town is largely unaffected.

For all the talk of whether superannuation changes announced in Budget 2016/17 were retrospective or not, we seem to have missed the point. Any change to retirement income policy is retrospective when people have been planning their retirement based on a different set of rules. Sure, they may be able to change their plans or investment strategy, but for many who are staring down the barrel of retirement, there simply isn't the luxury of time, extra funds or much flexibility.

What about you? Do you think that the changes to superannuation are effectively retrospective? Is it in any way possible to plan for retirement knowing the goal posts could change at any moment? What do you think is the greatest challenge facing retirees or those planning their retirement?

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    wheels
    18th Jul 2016
    10:12am
    Bad enough about retrospective changes back to 2007. That may not affect as many as the huge numbers affected by Jan 2017 changes that alter asset limits and make your income reduce after retiring perhaps recently. Isn't that a form of retrospectivity?
    Old Geezer
    18th Jul 2016
    11:59am
    It will effect many more as it's not only effects people today retired but lots of those in the 40s and 50s who haven't had the chance to put enough money in.

    If you can have $1.6 million in super then you should be able to put in $1.6 million in one way or another. The lifetime cap of $500,000 is just stupid.
    Anonymous
    18th Jul 2016
    12:44pm
    Obviously if you put $1.6 million in, you are going to have a lot more than $1.6 million, unless returns collapse completely, and thus you will be quite well off (assuming the limits are indexed sensibly). While I don't necessarily agree with all the proposals in respect of super, I think it is very hypocritical to suggest that the well-to-do should be indulged while battlers who lose a part pension that, in many cases, is genuinely needed and justified, are accused of greed and their complaints dismissed.

    The bottom line is that if the economy is in a mess, we need sound policy to fix it. That means NOT destroying incentives to save, but drawing a line at a fair point to ensure that the wealthy can't rort the system and that support is targeted fairly and equitably.

    The assets test change is patently wrong in that it is highly discriminatory and retrospective, and for many will wipe out the benefits of years of hard work and saving, while at the same time yielding NO benefit whatsoever to the needy (despite lies to the contrary), indulging a select group who have a few hundred thousand in assets, and presenting a massive disincentive to future retirees to save for retirement. It's an appallingly irresponsible and ill-conceived change that is far more important to address than very minor possible flaws in planned superannuation changes.

    Ultimately, though, what is needed is a total overhaul of the entire retirement funding system to apply some rare common sense, logic, respect for both taxpayers and retirees, and plain human decency. Sadly, the greed and selfishness prevailing in our society at present make it unlikely that review will overhaul will ever happen.
    Old Geezer
    18th Jul 2016
    12:54pm
    Even if you put into $1.6 million you can only have a tax free income off $1.6 million. Any amount above this is taxed at 15%.

    Presently you can have many millions in super and it's all tax free in the pension phase after the age of 60. Even capping the tax free amount at $1.6 million is very limiting and doesn't equate to what people get in welfare with the age pension. 2.5% of $1.6 million is only $40,000 a year which isn't that much more than the age pension.

    If you save that sort of money then you should be given incentives as you are not draining the public purse by accessing the age pension.
    Anonymous
    18th Jul 2016
    3:14pm
    Whoa! And this from someone who supported changes to the aged pension assets test that disadvantage people with FAR LESS than $1.6 million!

    2.5% of $800,000 is only $20,000. If you have saved $800,000, why should you be worse off than a full pensioner who saved much less?

    Let's be consistent here. If retirees UNITE, dealing respectfully and sympathetically with the concerns of all groups. By uniting, we might have a hope of winning for everyone.
    Old Geezer
    18th Jul 2016
    3:44pm
    Someone with $800,000 is much better off than someone that gets the full pension. They have the interest plus $800,000 to spend. They will have to do what we all have to do when we don't make enough to live on each year spend their capital.

    I actually know the people who lobbied for the increase in the assets test in the Howard years. At the time I thought they were being greedy and my thoughts have not changed. A friend of mine said at the time that they were just all gimme gimme people who thought of no one but themselves. I had to agree with them.
    Rae
    18th Jul 2016
    4:59pm
    I'm not sure entirely how much of an asset the aged pension is but it must be quite substantial.

    It seems blatantly unfair that some hard workers don't have access to that aged pension asset while others do.

    In hindsight it would have been better to have been buying gold all these decades, collect the aged pension and the discounts instead of saving diligently, getting no tax payer funded asset base at all and paying full price for everything.

    It makes absolutely no sense at all.

    Just how big an asset is the aged pension over say 25 years? Must be around about what a self funded retiree saved up for themselves I suppose.

    Would have been more fun to go overseas on adventures every year instead of being prudent.
    Anonymous
    18th Jul 2016
    5:28pm
    Rae, the aged pension is LESS than the tax concessions to so-called ''self-funded'' retirees (who are actually ''tax-payer funded retirees'', same as pensioners, though they get a much better deal!).

    The most favoured in the community are obviously those who spent or gifted liberally or hid their assets to get a pension. The most discriminated against are those who saved well but, given economic downturn, couldn't make it to over the $1 million mark.

    It is disgusting that arrogant, self-opinionated egotists claim that they have a right to their huge tax concessions but those who have less should be forced to simply spend their savings. What a disgusting attitude!

    I find it terribly sad that Australian retirees don't have the decency and respect for one another to unite to demand a proper overhaul of the retirement funding system that is fair to all, logical, sensible, and sustainable. Of course, the rich would be hit hardest by such a review so why should we be surprised that the most privileged merely want to see those with less suffer?
    Old Geezer
    18th Jul 2016
    5:57pm
    As only a small proportion of my wealth in super I have had very little in the way of tax concessions. I saved and invested like everyone else and paid all my taxes along the way. I still pay tax and don't even qualify for a health care card.

    What I think is disgusting is for people to get the pension when they could provide for themselves before resorting to pension just because they can and not because they need it. That is far worse than any concessions self funded retirees may have got to save for their own retirement. They then keep their capital instead of spending it on their retirement and leave it for their heirs to spend of the luxuries of life. That is simply unfair to the taxpayers who have to pay for this indulgence.
    Anonymous
    18th Jul 2016
    6:28pm
    RAINEY - not sure where you pulled your figures out of, but they are wrong.

    The Age Pension welfare cost about $46 billion in 2014-15

    Super tax concessions cost about $16 billion

    Self-funded retirees saved the government about $7 billion in aged welfare payments.

    The rich pay most of the taxes that support anyone on a pension. In other words, if you are on a pension you get it because of a progressive tax system that ensures the rich pay enough to ensure a pensioner etc gets their fortnightly welfare benefit.

    If you are self-funded you are likely to have been one of those higher taxed individuals over your life - paid whatever taxes were due to support welfare at the time - and saved instead of spent all your life.

    It might surprise you and others, but if someone works hard and accumulates assets, it is not a crime to be able to use those assets how you see fit - under whatever tax rules are applied - and then leave as much as you choose to your kids as you see fit.
    MICK
    18th Jul 2016
    9:33pm
    Rainey: doesn't it always amaze that the rich expect rules for THEM to be totally different than for the rest of the population.
    Geezer (Frank?) is unbelievable. Your typical Liberal Party Party hypocrite. You should have heard Turnbull tonight. Whoaaa....
    Old Geezer
    18th Jul 2016
    9:55pm
    Sad but true Mick those on welfare now have become the favoured norm of society. We are heading down the same path as Greece now where judgement day is coming for the favoured ones.
    Anonymous
    19th Jul 2016
    10:55am
    Reasons, your figures are wrong, sorry. The cost of tax concessions to self-funded retirees in 2016-7 will be HIGHER than the total cost of the aged pension. That fact has been extensively publicized and validated.

    And your logic is seriously flawed, because you have no idea how much tax someone now on a pension may have paid BEFORE a crisis or trauma that stripped them of their savings. Many pensioners paid a huge amount of tax over their lifetime -especially part pensioners who are now being denied the benefit of their savings and harshly punished for being frugal. Many of my generation had NO superannuation, NEVER benefited from negative gearing or capital gains tax concessions, NEVER got first home buyer grants or child care subsidies or maternity leave... etc. etc. etc. etc. The well to do are FAR more likely to have enjoyed tax concessions and other major benefits that simply weren't available to battlers.

    No, it's NOT a crime to work hard and accumulate assets and be able to use them as you see fit, then leave as much as you choose to your kids. It IS A CRIME that many who worked hard and accumulated assets have suffered massive unfairness and are denied the right of enjoyment just because they didn't get QUITE AS RICH as the arrogant privileged whose greed is NEVER SATISFIED.
    Anonymous
    20th Jul 2016
    10:48am
    THE FACTS, Reason. These figures were released by Treasury in April 2014.

    '''The age pension currently costs $39 billion and superannuation tax concessions will cost the budget around $35 billion in 2013-14,'' the study found.

    It notes that the Commonwealth bill for these concessions is projected to rise at a staggering 12 per cent annually to be $50.7 billion in 2016-17.

    ''The overwhelming majority of this assistance flows to high-income earners,'' the report finds.

    ''Low-income earners receive virtually no benefit. The combined cost of these two policies will be $74 billion in 2014 alone.''


    FACT: High income earners are now costing the economy far more in retirement costs than pensioners. But when pensioners are attacked, the selfish high income earners cheer. And as we see here, when there is consideration of winding back the obscene handouts to greedy well-to-do, they belly-ache like there's no tomorrow!
    Radish
    22nd Jul 2016
    10:21pm
    The government is saying you can put no more than $500,000 of non-concessional contributions over your lifetime into your superannuation account, with the ticker starting in July 2007.

    If you’ve already put in more, you don’t have to withdraw it.

    If you’ve put in $400,000 since 2007 you can only put in $100,000 more.

    18th Jul 2016
    10:28am
    The problem is definitely multi-faceted as you have proposed.

    If you choose to use a financial adviser - especially at a bank - you have to assume you are being misled and ripped off.

    The RBA is repressing interest rates and savers are being extremely disadvantaged to the benefit of borrowers. This is forcing retirees and their advisers to invest way out on the risk curve to get a desired return - which will cause further GFC type grief through large capital losses should the markets correct badly in the future.

    The government is acting retrospectively with some of its Super and pension rules - forcing a rethink on how to invest and get a return -and this will be exacerbated should the economy, interest rates and global markets decline.

    Retirees are under attack on many fronts and having to adapt and pre-empt a range of forces working against them.
    JAID
    18th Jul 2016
    10:43am
    If the goal posts are ill-placed moving them is necessary. Nobody, rich, poor or in between could have overlooked massive tax reduction potential in Superannuation. The only support I can see for this is that the amount people believe it takes to live happily varies widely and secondly that some superannuation commitments are mandated yet contain risk. Signficant risk has not yet been realised but no doubt it will be evident in the future.

    Just the same, risk and inefficient happiness are part of any lives or any investment strategy so that I think the compensation for this should be minimal. Superannuation has been set in place for two primary reasons. To increase national savings, to decrease the public cost of providing for the aged and perhaps a third related one; to create a culture valuing forward planning and responsibilty.

    Avoidance of taxation through this method may not wipe out gains by these two aims but it does reduce them requiring rebalancing of the remaining field for tax gathering. As any tax is an exploitation of peoples time; their life and liberty, focus on other than keeping it as efficient and non-destructive as possible is inappropriate. Ease in one area limits enterprise in another.

    Some work hard, most do not. Some work smartly, most do not. Rewards are high by any international measure regardless. Reward needs no amplification by government edict except where aggregation will not meet a base level that as a people we may consider the minimum for a satisfactory Australian existence. That is, it is great to encourage people to save for rainy days, to take responsibility for their later costs but that should not be at other's cost. Where people cannot meet their costs then we do perceive ourselves as a wealthy enough and sufficiently caring society able to meet those costs.

    Though the government is considering measures and listening rather than setting the area in concrete, I strongly support the aim of minimising the capacity to use superannuation as a lavish repository for extra-necessary funds whatever that level may be.
    Mad as Hell
    18th Jul 2016
    11:02am
    The Jan 2017 assets changes are retrospective and is the reason I did not vote Liberal or Green (would never vote Green under any circumstance).

    These changes will cost me $200 a week why shouldn't I be as Mad as Hell?
    Cruiser
    18th Jul 2016
    11:38am
    Agree, am in the same position as you. We were told about a budget emergency by the duplicit Abbot, so pensions had to be cut to make a contribution to the budget savings. I was OK with that and assumed all sections of the population would contribute accordingly. This has not Happened, the wealthy at this stage has contributed a big fat zero and now when asked to do the same are fighting tooth and nail to escape any form of cuts ably supported by large sections of the liberal party. This is bizare, how much is enough, greed us not a good thing. I remain disillusioned.
    MICK
    18th Jul 2016
    11:42am
    Maybe because the system was a casino in the first instance. You need to be fair to taxpayers.
    Anonymous
    18th Jul 2016
    12:01pm
    The biggest negative of the assets test change is that it is UNFAIR to taxpayers, in that it presents a huge disincentive to saving for retirement and will thus drive the total cost of aged pensions UP UP UP. It is irresponsible in the extreme, as well as being grossly unfair, discriminatory, and most harmful to the disadvantaged - and sold on a massive lie that it would facilitate more help to the neediest, when in fact the ONLY increased pension is paid to people with a few hundred thousand in assets. The really needy get NOTHING from the policy change.
    Old Geezer
    18th Jul 2016
    1:16pm
    It saves the taxpayers money as they don't have to pay as many people the pension. If people spend their money so they get the pension this stimulates the economy and the government gets more revenue. I really can't see how that is a negative to taxpayers at all.

    If you don't save anything for your retirement why should you get more than enough just for the basics? That is why people will continue to save as they will more than just the basics when they retire.

    Anyway once your savings get above the asset limits then they give you more choices that you have by relying upon the pension for your retirement. Give me the savings and more choices any day to relying upon the pension.
    Anonymous
    18th Jul 2016
    3:20pm
    Why save if you are going to have a lower income than people who don't? It's absurd. The nation can't save money by paying people NOT to save.
    Old Geezer
    18th Jul 2016
    7:12pm
    So you can support yourself in retirement so that you are not a burden on the taxpayers of the country. It also gives you better life choices in that you don't have to lell Centrelink about every financial decision you make in case your pension is effected. Some days I'd be letting Centrelink know my assets had increased or decresed by $2000 many times a day normally it would only be once a day. It would drive me insane.
    MICK
    18th Jul 2016
    9:36pm
    Yeah Geezer....it saves the taxpayer money if you knock out those who should qualify for the pension and give it to greedy gold diggers like you. That is your solution. The typical LIberal Party solution to all issues involving money.
    Old Geezer
    18th Jul 2016
    9:58pm
    Good grief Mick those will be the days when we get something back from the government. However it will take a lot to come anywhere near what we have paid the government in taxes over the years. Even today I still pay income tax whereas the majority of retirees get their taxes back.
    Anonymous
    19th Jul 2016
    10:58am
    Mick, the greedy and selfish in this society are claiming taxpayers should sacrifice so those with $1.6 million can have more, but those with half or less that amount - get stuffed! You don't count. And this is what they call ''sound economic management'' and ''fairness''.

    Sick puppies. Greed has destroyed their brain cells.

    18th Jul 2016
    11:06am
    Good article, Debbie. Thanks.

    18th Jul 2016
    11:26am
    Changes for appeasing LNP dissent should be focused on the new thresholds effective 1/1/2017.
    DC
    18th Jul 2016
    12:03pm
    Excellent comment Debbie. Fast Eddie - Yes, that is what they should be concentrating on as no 1 issue!!
    GeorgeM
    18th Jul 2016
    9:45pm
    Agree, great article, Debbie. The No. 1 issue is the revised Assets Test and taper rates from Jan 2017. Turnbull is being fed lies by vested (rich) interests who are interested in changing other measures which affect them. Can you send your article and these supportive comments directly to Turnbull?
    Alternatively, they should also consider throwing out the whole Age Pension system and adopting a system (like in UK, USA) to pay everyone an Age Pension based on tax paying history, and then simply tax the overall actual income. Then, we don't need Centrelink for administering it, and ATO can handle it.
    Oldie84
    18th Jul 2016
    11:36am
    I won't voice an opinion as none of this affects me but it saddens me to see that good intentions have been misused over time. It was supposed to be the solution to the ever growing cost of the old age pension and look what it turned into. Another Tax avoidance scheme. I refer to the news how top Public Servants in SA are avoiding tax by shifting money into Super. Sad story.
    MICK
    18th Jul 2016
    11:40am
    Cracks already opening up as the rats keep talking about putting up the pre election budget as was. Don't they know voters did not approve? But then they are an arrogant disrespectful lot so what else is new.

    18th Jul 2016
    11:57am
    I note that the change to the taper rate was approved by agreement with the Greens, and that agreement was solely conditional on the Government consenting to a full review of the aged pension system. That review never happened. The Government is in breach of its agreement. Sadly, the gutless Greens are unlikely to pressure the Government on this issue, but retirees SHOULD be demanding that they do.
    Old Geezer
    18th Jul 2016
    12:05pm
    Self funded retirees need to be able to be compensated for the mere fact they are not a drain on the public purse by draining welfare in the form of the age pension. If they are not then why become a self funded retiree? Messing with super us sending the message to people to only put the bare minimum into super. Is this in everyone's interests. I think not.
    Anonymous
    18th Jul 2016
    12:50pm
    Likewise part pensioners should be rewarded for their efforts to reduce the burden on the taxpayer by striving for near-self-sufficiency despite economic conditions destroying their carefully laid retirement plans. Slashing their income by changing the taper rate sends a strong message to battlers that it's useless striving to save and they may as well put less aside and claim a full pension with benefits. Yet so many arrogant, hypocritical self-funded expressed support for attacking part pensioners. Now they complain about the better off being asked to make a sacrifice. How disgraceful!
    Old Geezer
    18th Jul 2016
    1:31pm
    It is disgraceful to be arranging your assets to get the pension when you don't need it. However I find that those who don't are being disadvantaged and so should be given incentives to be fully self funded as they are not a burden on the taxpayer.

    I agree with changing the taper rate and slashing the assets test because they people do not need the pension or it's benefits. They have more than ample capital to use and once they have drawn it down enough will once again qualify for the pension. It is disgraceful for these people to be even on the pension now.
    Wstaton
    18th Jul 2016
    2:54pm
    Got a bit of a problem here. Isn't the fact also that self funded retirees are a drain because of the tax they don't pay and the fact that income when they retire is also tax free.

    If I just invested to provide myself with a retirement income outside of the super system then I would have to pay tax on it at the same rate as any worker. Which I wouldn't mind as I consider all should contribute to society depending on their income.
    Old Geezer
    18th Jul 2016
    3:09pm
    Retirees over retirement age don't pay any tax until their income gets to nearly $60,000 if they don't have super. So you would need quite a bit of super to earn this sort of income in the current financial environment. So if they had their money outside super they wouldn't pay tax anyway. More reason to make super more attractive than just having money outside super.

    However I agree it does become a drain when they use their thresholds outside super and then use super as a tax effective vehicle so that they pay no tax at all. However to do this one would need to have quite a large capital base.
    Anonymous
    18th Jul 2016
    3:18pm
    Oh I see, Old Geezer. we should look after the rich and let them use tax avoidance to preserve their wealth to pass on to offspring, but screw those who struggle to be self-sufficient but don't quite make it. They can be victimized and abused.
    Old Geezer
    18th Jul 2016
    3:51pm
    It is not tax avoidance as that is illegal. It is tax minimisation which anyone can do. There is nothing wrong with using the tax rules to pay the minimum amount of tax in fact you would be a fool not to.

    If anyone is being victimised and abused it is those who don't burden the taxpayer with their retirement needs.
    Oldman Roo
    18th Jul 2016
    3:53pm
    Old Geezer , I can not help feeling that you really are not familiar with the situation a lot of aged part Pensioners will find themselves in come January 2017 . The cut off rate for a couple is 730 000 , which includes daily necessities like the bed you sleep in , the chair you sit on and the table you eat from , not to forget a car to mainly do your shopping and attending regular medical appointments . So reduce this figure to actual money say 680 000 . Now you can calculate the actual return of your money in a term deposit making fortnightly payouts of interest which are needed because your Pension will almost be zero and not worth the mention .
    Consequently this requires regular draw downs from your capital as the way interest rates are going the returns will also be not worth the mention .
    When Abbott - Morrison came up with these changes the explanation was , we have to reduce the welfare burden . What they are actually achieving is the opposite . Many part Pensioners will be like the wife and I that we must draw our money down at a fast rate to survive and the small Pension we are presently receiving would , no doubt , be the much smarter way to continue . Once the money is gone we will be on a higher Pension for the rest of our life and costing the taxpayer far more . Please do not come up with risky investment ideas , we are too old to ride out highs and lows and do not need the additional worry about how our money is travelling . Unless of course this Government is prepared to guarantee our capital and let them take the risk of losing it .
    Old Geezer
    18th Jul 2016
    4:20pm
    That is precisely what the government wants you to do spend down your money enough to qualify for the pension. I can't see any problem with that after all what use is the capital once you leave this mortal world.
    Oldman Roo
    18th Jul 2016
    5:05pm
    Old Geezer , It is of course exactly the kind of ignorant reply I was expecting from you . If you do not get the point I am making then you obviously do not want to and any discussion with you is not worth
    having .
    Old Geezer
    18th Jul 2016
    7:22pm
    I don't think you get it Oldman Roo. You saved your money for retirement so you need to simply spend it. If people had spent more instead of hording then the government would not of had to reign in the pensions system as people would have spent down their capital instead. Centrelink data would be telling the government that people are not spending their capital so their take on this would be that people were getting too much welfare and didn't need it.
    Oldman Roo
    18th Jul 2016
    8:34pm
    I will give it one more try by replying to you . Wrong Number one is : I did not save my money to spend it in retirement , I wanted to live from it,s earnings but the people you represent here were part of the Government mismanaging the economy and destroying a lot of hard work and sacrifices .
    Also familiarise yourself with what you are saying here . The reason your LNP friends gave us for reducing the assets limit and reducing part Pensions were that the welfare burden is too great and I still have an email on my computer from a welfare chief that part Pensioners will not lose any money if they invest it and live off the interest .
    If you can not see the mathematical reality that if you force people to spend their money , it will not take too long before Centrelink will have to pay them much more and are instead increasing the welfare burden . It has all been said in my earlier reply to you but the logics go out the window by listening to the LNP . Tell them to say what you say in Parliament so all of Australia will get to know the truth about them .
    Old Geezer
    18th Jul 2016
    8:52pm
    Unfortunately I am not a member of the LNP or have anything to do with the LNP at all. There fore I have no more influence on what happens in Parliament than you do. That's right stuff all.

    I do know the history of the increase in the asset test back in the Howard era and the lobbyists behind it. At the time I expressed my concerns about what they were doing and it's impact on future generations etc. I also knew it would only be a matter of time before it was reigned in so it came as no surprise that asset test was to be tightened. The government only has to look at Centrelink statistics to realise that people are not spending their capital which is what they should be doing in retirement. Obviously if this is not happening then people are being paid too much in welfare payments because after all welfare should only be for those who need it. That together with the increasing welfare burden as more people enter retirement the government needed to reign in the asset test so that only people who needed the pension got it. I also see further changes in the pipeline.
    MICK
    18th Jul 2016
    9:37pm
    Ha, ha, ha. Funny Geezer. And the pope is not a catholic either!
    Old Geezer
    18th Jul 2016
    10:00pm
    I have no idea what the Pope is Mick but I do know a lot about the background to this issue.
    Oldman Roo
    18th Jul 2016
    10:13pm
    Old Geezer , Enough said for me to know where you are coming from or where you should be .
    Anonymous
    19th Jul 2016
    11:37am
    Old Geezer, the change in the Howard years might have been ill-advised, but anyone with a brain can see that obviously the assets test has to be linked to returns or it serves as a reward for not saving and is economically unsustainable. Return rates are now low, so the assets test limit NEEDS to be higher to encourage saving.

    The common sense approach is to address income, either by means testing or taxation - NOT to punish people for planning and being hard working and frugal, just because economic collapse wiped out the value of their assets.
    Anonymous
    19th Jul 2016
    6:03pm
    Why do presumptuous ill-informed and arrogant ASSUMERS take it for granted that people who saved did so to fund their retirement and benefit OTHER PEOPLE.

    In many cases, today's retirees got little or NO assistance from the taxpayer to save. Many had no superannuation, no tax concessions whatsoever, no free education (or even at concessional cost). Many started work very young and paid taxes for decades. The fact that some went without holidays and nights out and new cars and nice clothes DOES NOT mean that they saved for SOMEONE ELSE'S RETIREMENT. They saved to ensure THEY had money to cover expenses that the pension doesn't cover and to enjoy a higher standard of living in old age than is provided from the public purse.

    They ABSOLUTELY SHOULD NOT be forced to spend those savings to benefit people who DID NOT go without lifestyle or who had the benefits of superannuation and tax savings, better educational opportunities, etc.

    This is where the Old Geezers and Bonny's are DEAD WRONG in their BS. It is patently unfair to take the benefit away from people who earned it and give it to others, while at the same time continuing benefits to the more privileged who have much more wealth, and denying a reasonable income to the genuinely needy.

    Changes to the assets test were UNFAIR in the extreme, and blatantly dishonest, because they gave NOTHING to the needy, but they took PERSONAL SAVINGS from people who have taken virtually nothing from the public purse until now to hand them to people who, in many cases, benefited far more from the taxpayer - on no other basis than that the latter saved less, probably by living better.

    SAVINGS are NOT money for retirement to save the taxpayer. They are money for the SAVER and the SAVER'S FAMILY. And given that the rich and corrupt have stuffed the economy and killed the incomes of battlers, they should be the first to make sacrifices to ensure those who have been hurt most are not treated as easy targets for cuts that benefit others.

    The blatant discrimination against those with modest assets is not just wrong, it's actually criminal under laws that purport to protect people from discrimination, not to mention that it is a total breach of trust and evidences the worst kind of dishonesty by the government. A company director acting in that manner would be in jail, and that's where everyone who supports the taper rate change belongs.
    ex PS
    23rd Jul 2016
    5:55am
    OldBon, I can't see why it is OK to minimize tax because the rules allow it but not OK to maximize pension benefits which is also allowed by the rules.
    Please explain.
    *Imagine*
    18th Jul 2016
    12:07pm
    Debbie you have my total support here. I believe that the whole area of aged pensions, superannuation and other retirement income is in desperate need of a total review.
    If you take any five age pensioner couples with the same assets and income, depending on where their wealth is held, or where their income comes from, some will gain and some will lose, under the present hotch potch Centrelink pensions “system”. I could give many examples. One obvious one is the millionaire couple with a two million dollar house, the latest 4WD and a yacht, registered in their child's name five years before they retired, and $300,00 in super. Come 2017 they will get an increase to their full aged pension. Their neighbour in a $500,000 house an old bomb of a car that he services himself, who have a river shack and a tinny, together worth $500,000 and like their rich neighbours, also have $300,000 in super will lose their pension altogether. This is supposed to be equitable.
    It is only the wealthy and those who can play the system who will win in this income/assets based system. Others who gain include the army of government employees who need to check pension recipients and the growing number of advisors who are paid to find a legitimate way of removing (hiding) assessable income and assets. If it wasn't so tragic, it would be funny.
    Old Geezer
    18th Jul 2016
    12:29pm
    Agree whole age pension system especially the house is grossly unfair.
    Old Geezer
    18th Jul 2016
    1:19pm
    Now you can't give away your money over a certain amount without effecting your pension. However you can spend your money on your family by taking them on an expensive holiday without it effecting your pension as it is deemed to be spending your money on yourself.
    Wstaton
    18th Jul 2016
    3:12pm
    The only equitable way to sort this out is to give everyone the pension paid the same way as the medicare levy. No other tax reducing ways given. The pension be tax free and no reduction for any other income earned because it has been paid for.

    Yes the millionaires get it but what the heck they have paid for it with the levy.

    If people want to invest to have more on top of their retirement so be it.

    If the original pensions scheme had been maintained in 1918 then we would not be in this pickle. Tax was raised at the time to cover it. This was wrong it should have been a levy put into a separate system outside the tax regime and made law (even constitutional) that it cannot be touched other than to pay for pensions. I believe if this was so from the start the total amount would by now be more than that needed to pay pensions. Any excess would cover those who could not pay the total levy and any left could be loaned out at current interest rates to federal or state governments to pay for infrastructure boosting the amount even more.

    But maybe this is all too simple.

    Unfortunately politicians see any money like this as a golden goose to be plucked to advance their agendas.
    Old Geezer
    18th Jul 2016
    4:26pm
    Another alternative is to give people the pension if they want it that is to be paid back from their estate when they die.
    Anonymous
    19th Jul 2016
    11:04am
    Here he goes again - the arrogant GREEDY OLD GEEZER. Gimme gimme gimme, and stuff anyone who has less than me. THEY should pay for my tax breaks.

    Old Geezer, NOBODY in this country got wealthy without minimizing tax. Legal, yes. Moral and fair. ABSOLUTELY NOT. But our system was designed to compensate the less privileged with pensions and benefits.

    What you want to do is SKEW ALL THE ADVANTAGE to the privileged exclusively - TAKE THE BLOODY LOT FOR THE RICH and bugger the poor battlers who slaved all their lives to build this nation and give the rich an environment in which they could prosper, but who end up with a modest little home and a tiny nest egg that they want to preserve for their offspring. You want to either deny them basic comfort in old age, or strip them of everything they worked and saved for, while we continue to give OBSCENE HANDOUTS to the greedy, self-serving bastards who stuffed this nation with their unadulterated selfishness.
    Wstaton
    18th Jul 2016
    12:16pm
    LNP up to their tricks again. Saying they are doing something during the lead up to the election then reversing it once they have got in.

    Apart from the fact that some people did not vote for them because what they say they are going to do during the leadup. What about the people who did vote for them because they were going to do something to stop the stop end of town rorting the system.
    KSS
    18th Jul 2016
    1:02pm
    Wstaton, what a typical statement.

    If the Government says they will do something get elected, and do it, they are accused of not listening and therefore 'out of touch'.

    If they say they will do something, and then change something because they 'listened'; they are accused of lying to the public.

    Damned if they do and damned if they don't eh?
    Wstaton
    18th Jul 2016
    3:27pm
    Something strange puzzling and illogical about your replying comment KSS.

    If a party says it is going to do something and people vote for them because of it. The then same party reverses it. Are you saying that that they are listening to the people.

    The fact that people voted for them and they then reversed seems to me that they are not listening to the people.

    The same in the reverse if they say they are not going to do something and people voted for them because of this then they reversed it means once again they are not listening to the people.

    This is exactly what Abbot did. He said here wasn't going to do certain things which was part of the reason people voted him in.

    He pretended he was listening to people before run up to the election and then reversed everything afterwards.

    Where is the dammed if you do or dammed if you don't there.
    MICK
    18th Jul 2016
    9:38pm
    KSS: have you forgotten one Tony Abbott...."we do what we say and say what we do". The lie of the century!
    The next troll comment from you?
    Crimmo
    18th Jul 2016
    12:32pm
    I and many others spent much time and effort responding to the governments White Paper of reform of our Retirement Incomes System, only to be ignored for political reasons. I do not appreciate people wasting my time. I spent two hours on the phone the other day to Telstra and Telstra Foxtel. Another waste of time. Pauline for Prime Minister. Cleanse the population and start with politicians.
    johnp
    18th Jul 2016
    12:35pm
    I agree with most of the comments. Its very unfortunate that those caught in the middle are those most affected. I think its between about $800K and $1.2M (and over) in assets. Whilst I agree that Super should not be allowed as a tax haven by the wealthy however there are those that have worked to have a reasonable nest egg for their retirement and they are being penalised as a result. I saw in the last election senate ballot paper there was a party called the "Mature Party" which I did put as number One. I am surprised they did not do better in the election considering the numbers of baby boomers. Maybe worth a look
    http://matureaustralia.com.au/map-policies/pensions/
    Old Geezer
    18th Jul 2016
    12:58pm
    If you have between $800K and $1.2 million in assets you simply don't need the pension. All that has happened is that they have redrawn the line in the sand.
    johnp
    18th Jul 2016
    2:05pm
    I agree you dont need the pension however I also agree where you said as follows !! :
    If you save that sort of money then you should be given incentives as you are not draining the public purse by accessing the age pension.
    Rae
    18th Jul 2016
    5:37pm
    Wasn't the 9% surcharge and the tax minimisation enough for you Old Geezer.

    It was more than defined benefit scheme members got.
    Old Geezer
    18th Jul 2016
    6:03pm
    I didn't get the 9% surcharge as I have worked for myself most of my working life. The little I did get is what is in my current super fund although I have grown it quite a bit in the decades since it was out in.
    Anonymous
    21st Jul 2016
    9:41am
    You didn't claim tax concessions on contributions to super, negative gearing tax benefits, or capital gains tax concessions, either, did you Old Geezer? You didn't claim grey-area business expenses for tax purposes. In fact, you didn't do anything to minimize your tax, did you?

    Of course you did, you leaning TAX-PAYER FUNDED RETIREE. What a hypocrite you are, slandering people who had none of those benefits and worked for far less than they are worth, probably gave a lot of time and effort to charity and the community (and still do), and potentially sacrificed their health in hard work, but because people like you got rich off the back of those underpaid workers and an unfair share of the nation's resources, they NEED a pension in old age.

    YOU ARE THE ONE BLEEDING THE WELFARE PURSE. YOU ARE THE PROBLEM FOR OUR ECONOMY.
    KSS
    18th Jul 2016
    12:57pm
    I would just like to point out that when Debbie says the reduction from $30,000 to $25,000 for the concessional contributions amounts to $50,000, she is forgetting that for those of us over 55, it is a reduction of $10,000 a year (meaning a reduction on $100,000+) at the very time when many are in the position to make those extra payments and had planned to do so.

    And again I will point out that the current tax 'savings' on concessional contributions are NOT just for the wealthy. I cannot be considered wealthy by any means (If I were to retire today I would more than likely qualify for an age pension with the assets I have), yet I currently sacrifice my salary to the full extent of $35,000 (which includes the employer contribution). And yes I maximise my tax deductions by doing so and also by utilising the transition to retirement facility as well in an attempt to NOT to have to rely on age pension in about 6 years or so. Now, I earn way under the average wage working for a NFP NGO, do not have a partner (or other family) who picks up half the outgoings on my unit and have worked very hard and sacrificed holidays, nights out even clothes and so on to be able to afford to do what I am doing with my financial plan for retirement. And yes that included buying my own small unit ALONE just over 4 years ago. Yet there are those here who would attempt to shame me and strip me of my current plan and force me onto a taxpayer funded pension purely on the grounds they THINK I am 'rorting' the system and must be very wealthy to be able to do what I do. Yes I pay half the tax on my concessional contributions but let me tell you; 15% of not very much is very little yet over time that dollar adds up and may hopefully mean I will not be in the welfare queue when I do eventually retire.
    Anonymous
    19th Jul 2016
    7:47am
    K S S good to see someone having a go and not wanting to rely on Government hand outs like so many of the others on this web sight.
    Anonymous
    20th Jul 2016
    7:50am
    Well done, KSS. But you are ignoring the other side of the equation. I have a good friend who was a ''forgotten Australian'', raised (hideously abused) in an orphanage after his father died in war and mother fell seriously ill (and died after he went into ''care''). He started menial work at 14. He struggled all his life with PTSD, lack of self-esteem, and mortal terror of authority. Work was a nightmare, but he kept at it. Then one of his children was born with a serious disability and he borrowed heavily to spend a hundred thousand on therapies and treatments. His wife never worked because the child needed full time care. Then he lost his home when interest rates skyrocketed, with the child's medical bills taking all his pay. He lived on the smell of an oily rag (literally) to put his kids through university, and then he was finally able to start saving, and he did save hard. He and his wife have never had holidays, drove an old bomb that he serviced himself, never ate out, hardly know what steak or roast tastes like - they eat fish he catches, mince and sausages and grow their own vegies. They don't know what it is to buy clothes in a shop. She buys clothes at St Vinnies and makes them over.

    All that sacrifice saw him retire with a very modest little home unit and $750,000 in savings (plus about $75,000 in non-returning assets), in very poor health, with a wife who suffers a chronic illness. Neither he nor his wife have ever had superannuation. They've never been able to afford an investment property or had any opportunity to save through capital gains tax concessions. They've paid tax at the full rate for their income group every year of their lives and taken NOTHING from the public purse, despite hideous hardship.

    And now they are being told they are GREEDY because they claim a very small part pension - and they are about to lose it. They are being told they saved that money so other people who had far better opportunity than they ever enjoyed can be better off, and they must live off their modest savings and risk not having enough in later retirement to afford essential medical care or home help or a decent standard of aged care. They saved out of fear of future hardship, so that they would have a reserve to cover costs the pension doesn't stretch to cover - NOT to give it to taxpayers who have everything they never had.

    You think they wouldn't have accumulated $1.6 million if it were possible? Most like them have saved virtually nothing. To have paid off a modest home and saved as they did given their struggles is a mammoth achievement. But people who were more fortunate condemn them and suggest that they don't NEED a small pension to top up their inadequate income. Their investment returns are about 3%, because his background makes him so risk averse and incapable of trusting that he can't access better investments). They will have to live on $22,500 a year, or eat away all their hard-won savings and sacrifice everything they worked so hard to achieve. And yes, they want to leave just a little to their kids, because after growing up the way he did, they are mortally terrified that their children might experience hardship that will result in THEIR kids being taken away by the State and subjected to a hideous childhood with no love or opportunity. I tell him it doesn't happen today, and their kids have professional incomes now so they will get by okay. Do you think he can believe that?

    I get really sick of the ''holier than though'' judgmental people here who have absolutely no concept what life is like for others. I've risen above horrendous hardship and disadvantages and weathered huge storms, but that doesn't mean everyone can. We don't have the insight to understand why some people can and others can't, and unless we presume to be God, we shouldn't presume to sit in judgment.

    Yes, KSS, good for you. You are to be admired. But your challenges are not the WORST that anyone can face. And not everyone is blessed with your intelligence, strength or resilience. There are a million factors determining a person's capacity to achieve, and it only takes one minor advantage to position someone far better than a struggling neighbour.

    I am well aware that many pensioners simply didn't try. Many manipulated their affairs. Many rort the system. That's why the system is so bad - and the assets test is the WORST part of it. It makes it hideously and appallingly unfair. But let's not fall into the trap of condemning everyone who believes they should be entitled to a little taxpayer help in their old age. Many of them morally SHOULD get a great deal more than they do. I would be delighted to see every Australian who was abused in an institution in childhood given a full pension, non-means-tested in any way, as compensation for the neglect they suffered. And I think every person who stood by - knowingly or otherwise - and let that abuse happen should contribute to such a pension. Those people DESERVE some compensation for the suffering a cruel society inflicted on them. And they are not the only ones. We have retirees who suffered terrible hardship and deprivation because a parent was killed or injured in war, or they or a parent suffered severe injury in policing or rescue work, or in dangerous jobs where regulation was inadequate to protect workers - but bosses were getting filthy rich cheating on safety, AND using tax minimization that the poor worker couldn't access. There are victims of hideous injustice. People have suffered all kinds of hardship and wrongs, and nobody has the knowledge or insight to judge whether or not those wrongs or hardships were bad enough to prevent them saving to be independent in old age. But in a decent society, we look after our old folk. We don't judge them or condemn them or blame them or punish them. We respect them and respect their right to enjoy the rewards of whatever work they have done to contribute to society.

    There's a lot more to relying on a government pension than not having a go, Robbo, and referring to aged pensions ''handouts'' is demeaning - and I mean it demeans YOU, not the good people you insult.

    A little compassion and humanity wouldn't go astray here, instead of the ''holier than though'' arrogance and pretend superiority that is so sickening.
    Lark Force
    18th Jul 2016
    1:29pm
    When Joe Hockey(now living it up in the USA) introduced the budget that will cut Age Pensions in Jan 2017, he said it would only effect 95,000 pensioners.
    This article suggests 326,000 will be effected. More would have been made of the decision had the then treasurer mentioned that.
    This decision certainly affected my vote in the election.
    Old Geezer
    18th Jul 2016
    1:33pm
    It effected my vote too.
    FM
    18th Jul 2016
    2:11pm
    This is a very good article Debbie. Any changes that are in dispute are those that affect high income earners who are currently working and not retirees. There was no backlash from LNP MPs when the thresholds and taper rate were changed for retirees who had modest to low lump sums that will be quickly eroded. Nobody in any party has any concept of what it is like to be retired and have to rely on savings that dwindle as the cost of living rises. The failure to pay pensions in Australia and the persecution of aged pensioners will always leave the majority of old people vulnerable in retirement.
    Rae
    18th Jul 2016
    5:45pm
    Those changes will permanently lower GDP as well but the government advisors haven't worked that out yet.

    National assets are based on household savings and attacking that base will always effect the economy poorly.

    They were penny wise and pound foolish as far as I can see.
    FM
    18th Jul 2016
    2:17pm
    Rainey, with the current attitude to retirees and retirement a review of superannuation by politicians would alas most likely leave retirees worse off. Now is the time to let representatives of the main parties know that we carried through on our threat and did not vote for them because they singled out retirees and aged care for brutal cuts to pay for tax cuts for wealthier people. We could also let Independent Senators know that we voted for them because we believe they will support the aged and vulnerable against attacks from the major parties. The Independents can speak up on issues loudly and at length. They are not bound by party rulings, but can only block measures in conjunction with the opposition. We know Jacqui Lambie is onside but we should thank her for her support. She is working closely with Andrew Wilkie. We could also approach him. We should contact Bob Katter and Pauline to ask for their representation. Derryn Hinch would be a particularly good spokesman if he were onside. People can also contact Nick Xenophon with concerns about the adequacy of superannuation and the impact and short shortsightedness of the 2015 cuts. He usually votes with Labor as he did when he voted to cut part pensions and the super supplement for people with defined benefits superannuation. People can decide who they will contact in the major parties apart from the leaders; perhaps Arthur Sinodinos in the LNP or a local member; Barnaby or a local member in the National Party; Sam Dastyari in Labor may be more pro active than some others. It is open to suggestion but we cannot rest on our laurels just yet. We need to keep up the pressure on politicians as there is still a lot of pressure on to significantly increase the taxes retirees pay on their already taxed super. We could probably organize the basis of a letter to politicians through this website.
    Rosret
    18th Jul 2016
    2:38pm
    I would love an retirement income comparison on those lucky enough to have retired with the old super fund systems and the new self funded system. My neighbour, one year older than me retireed on the old system. He can guarantee himself an income til death. He also didn't need to but away large portions of his salary to increase his superannuation portfolio. Effective he was earning 10% more than me every year. They can go on holidays, plan house maintenance etc etc. I, on the other hand am future projecting every cost and large payment against interest gains, fees and inflation and now Malcolm Turnbull. No politician has any idea how difficult this has become. I have mathematically calculated the compound interest over the life of super contributions with all the ups and downs and it averages 5%. You need a lot of money in super to live comfortably in retirement if you are going to offset bad times, inflation and super fees with no concessional rates, rego or health. Mr Costello sold us the idea of being self reliant and we have tried very hard to be that. I am so disappointed in the government. My savings could have been used by businesses to build our nation. Now it appears I need to pull my money to invest in real estate - and that won't serve anyone but me.
    Rae
    18th Jul 2016
    6:02pm
    I think if you asked you'll find he did put away very large amounts of after tax contributions to pay for the units he accumulated. It was based on salary so as salary rose so did the non concessional amounts being contributed.

    By the last years workers were paying up to 30% of after tax income into the funds. He probably learned to budget really well during those years. Most had to.

    You would have received the 9% superannuation guarantee so I cannot see how he earned 10% more than you did. In fact he was earning less if you had a similar job.

    Your lump sum is probably twice what his was if he had taken it.

    Nothing is guaranteed either as all financial institutions can fail.

    I Know people who chose to transfer out of the old schemes back in 1992 so they could receive that extra 9% and accumulate profits using tax minimisation unavailable within the old schemes.

    You may very well be better off but worrying more.

    A good start would be to ask your neighbour how he budgets for those holidays and maintenance as it could be as simple as a few lifestyle changes to allow for the same spend.
    Rosret
    18th Jul 2016
    6:25pm
    Rae - it was a metaphoric example, I have no idea about my neighbours finances. However the 10% extra I needed to pay was the top up I needed to get to a retirement bench mark deposit to manage the 30 year retirement lifespan.

    I am sure my cash payment is much higher than those being paid on a regular basis. Many of the people on the old system chose cash payments instead of regular payments. They lived a long life ...and ran out of money.
    Rae
    19th Jul 2016
    8:20am
    Okay Rosret. If they ran out of money they would get the aged pension though.

    I know a retired teacher did just that. Took the $300 000 or so lump sum and spent it all. She happily gets an aged pension now.

    I don't believe you can rely on past benchmarks though as we are in uncharted waters.

    The Germans actually offered NEW gilts at negative yields last week. Never ever happened before.

    It means saving is basically pointless.

    That was why I pondered the actual asset worth of an aged pension and benefits before. How much would you need to save to buy an annuity equal to the aged pension and the discount benefits?

    Rainey may very well be correct that it is not worth trying to save for retirement at all until the markets and central banks stop fighting each other.

    I do know the propaganda about the fantastic defined benefit thing is a myth though.

    I ran a spreadsheet and the amount of non concessional payments into a fund, for a nursing assistant from 1970 to 2010 would have purchased 8 rental properties and produced a profit 700% higher than the super fund and a current income 400% higher.

    Provided they put that same amount of forced savings away which is doubtful as most people spend every cent they get each fortnight and don't even think about the future implications.

    Any long term payments received from those funds are entirely justified by the very large contributions made over very long time frames.

    I do get the problem of spending capital though because actually preserving capital is the aim of investing.

    Not return on capital but return of capital and that is the very problem we are facing right now.

    Perhaps those non savers living a grand lifestyle really do have the right attitude.
    Anonymous
    19th Jul 2016
    12:07pm
    The smart one, Rae, are those who gifted everything to the kids before turning 60, with agreements that the kids would pay their bills for the rest of their lives. Then they bought a nice house and a new car and furniture and settled back in total comfort to receive a full pension for life, with all benefits.

    We should ALL follow that example. Maybe if we stopped striving to do the right thing for the nation, the IDIOTS running the country and the SELFISH driving the agenda would wake up to their STUPIDITY and act in the national interest instead of the interests of a selfish, greedy minority.
    Rae
    20th Jul 2016
    12:44pm
    Yes Rainey I have a friend who just got very tired of paying the fund$5000 a year and then managing her own funds. She did just that.

    Gave her kids money, built a new home, out a little aside for future travel and now gets the full aged pension.

    As she always was a frugal saver she thinks it wonderful. And it is.

    That was why I wondered about the approximate asset value of the aged pension if you had to buy it.

    All we self funded are literally giving up that amount by saving for our own retirement and it may not make sense unless you are wealthy or earning high incomes or are a business person with the lurks and perks they enjoy.
    Alex
    18th Jul 2016
    2:44pm
    I agree that we need to keep up the pressure on politicians to give some consideration to retirees. They completely discounted us in the election though perhaps the fact that there was an election coming up saved us from harsher measures such as higher taxes on our homes and retirement incomes as was again being pushed aggressively last week by John Daley of the Grattan Institute for vested interests and 'journalists' like Jessica Irvine of the smh. We are all worn out by our long discussion of the issues before the election but we need to pull together and 'maintain the rage' until both parties stop the attacks on older Australians and their superannuation, pensions and retirement incomes. We need to let them know that we are not so much angry about the changes proposed in the 2016 Budget as about those put forward in the 2014 and 2015 Budgets and that it was these changes that influenced out vote. It is not just about whether or not changes are retrospective. We do not need a system where in the future some people have retirement entitlements that other people do not. It is about leaving a good retirement system to the next generation who are currently not far seeing enough to demand one, especially for those who will not earn enough to accumulate significant super savings. Australia needs a pension system that applies to everyone and superannuation for those who can afford additional savings. It does not need to be the country that has the highest retirement age in the world and no aged pension.
    ex PS
    20th Jul 2016
    6:07am
    M.T needs to be constantly reminded that the seniors are watching, they are measuring him up, and they will not hesitate to give him a kick mout the door if he fails to take us seriously.
    Last election was a warning, the next one will decide his fate.
    andromeda143
    18th Jul 2016
    3:43pm
    The greatest challenge facing retirees at present is having to put up with this non-caring set of politicians for another three years. They screamed about not wanting to dismantle Medicare, but still removed subsidies on blood test strips and bilk billing on pathology. They continually look for ways of attacking the less well of members of our community, with health, aged care and pension assets test cuts, yet they cannot agree on curbing the excesses of the banks, the wealthy superannuation rorts and the huge amounts of tax avoidance by large companies. They always hit soft targets like pensioners and the unemployed and youth, while making sure their fat subsidies for being in parliament and their retirement packages are always protected.
    The great pity is that not enough people saw it coming to want to push them out of office. Now we have to put up with the government we have elected. Turnbull is only marginally better than Abbott was. If he was true to his earlier statements he would be standing up to the crazy right and the wacky left and negotiating with Shorten to form a middle of the road coalition so that the ordinary voters could be listened to and their needs catered for.
    Alex
    18th Jul 2016
    3:53pm
    Absolutely Andromeda143
    Old Geezer
    18th Jul 2016
    4:11pm
    If you read the press release on those blood strips you will see that those who need them will still get them at the old rate. It is like a lot of other things if they are needed then they are available at the subsidised rate but if they are not then you have to pay a lot more for them. Some people just have to measure their blood pressure, check their blood sugar just in case without any medical need. These people should not be subsidised.

    With pathology it is unclear what the outcome will eventually be but I have been told that if blood tests are necessary for people like chemo patients then they will continue to be fully subsidised. I can't see why people should not have to pay extra for routine blood tests done just In case something may be wrong.
    Rodent
    18th Jul 2016
    3:47pm
    Dear Old Geezer

    Its clear from what you write that you have a specific view on how things should be . That's fine we all are entitled to express these views. Personally however I am getting a little annoyed that your views are not based any real understanding of how the Assets Test /Pension System actually works. You make all sorts of assumptions, and statements but offer little in facts to support you views, such as these you made --
    .................................................................................................................
    If you have between $800K and $1.2 million in assets you simply don't need the pension. All that has happened is that they have redrawn the line in the sand.
    .................................................................................................................

    In reality that's not what they did at all- If you don't understand what the Govt actually did, then that just convinces me even more about your lack of understanding of these changes.
    If I was to use your statement literally above then many more Pensioners would lose the Pension as from Jan 2017- Specifically ALL the Couple Non Home Owners that would normally still continue to receive a significant pension, and where their assets are greater than $800k

    But wait all the other Pensioners at your same $800k Min figure will already LOSE their Pension COMPLETELY (except for Home Owner Couples) who will receive a Grand Total Pension of $1102 pa.

    So Old Geezer -- how about drawing your line /Cut off point even Lower, why not make it $500K , or lower/ and then say that NOBODY above this point gets a Pension, does that sound fair?

    I don't object to the Pension system being revised, (what I and many others) not just posters here know is that the Govt/Morrison could have and should have better understood the impacts more.
    In case you have forgotten, or don't know, the original ACOSS proposal had LOWER thresholds and a $2.00 taper rate.

    Another Point - a percentage of the value of the Home is actually included in the Asset Test Threshold settings, when as from 1 Jan 2017 there is a $200,000 difference between Couple HO and Couple NHO

    In private talks with several important people the current Minister, Christian Porter acknowledges that these changes have not been well thought through!!
    Alex
    18th Jul 2016
    4:02pm
    Thank you Rodent. The changes that took place really affected retirees with lower incomes whether from lump sums or defined benefit pensions. The net effect is that they will run down people's savings quickly and then many more people will be on a full pension than would otherwise be the case if they left things as they were. They will argue the cost of pensions is too great and attempt to reduce them even further. People will not be able to fund their aged care or contribute towards it or afford the medical care they may need.
    Old Geezer
    18th Jul 2016
    4:04pm
    OK they have redrawn two lines in the sand. One for home owners and one for non-home owners.

    My history goes back to the Howard era when the assets test was increased. I even personally know the people who lobbied behind it and made it happen. It was nothing but political and should not have happened. All I see is that this new asset test is just undoing the wrong doings of the past.

    Let's face it the whole pension system is grossly unfair where no one with same assets including their house gets the same pension. Some families even use Grannies mansion as a store of tax exempt family wealth.

    As a taxpayer some of what goes on in the pension world has me shaking my head in disgust. For example younger partners locking lots of money up in super so that they as a couple get full pension.
    Anonymous
    19th Jul 2016
    6:13pm
    As a taxpayer for 40 years, who got NOTHING from the public purse, what goes on in the world of the greedy self-serving who claim tax concessions for everything conceivable, and then whinge and want more, has me shaking my head.

    I still work, but I am disgusted at the way aged pensioners in this country are treated. After 4 decades of service, often with ZERO superannuation or taxpayer funded benefits, they are now at an age where they DESERVE to get their long overdue and well earned share, and greedy, selfish people who support tax ''minimisation'' to build their massive wealth want to deny them. What a disgrace!
    Oldman Roo
    18th Jul 2016
    4:13pm
    I can really only call it for what it is this Government is doing - the rich man,s club is back in power and the ordinary person can go to hell . It is unfortunate that they scraped back into power but there was valid fear just what Labors Left will get up to again when they hold the reigns and cheque book . We can only hope the Senate will protect the low income people and resist rubber stamping the LNP selfish rule .
    Grateful
    18th Jul 2016
    4:13pm
    Cut the "tweaking", the whole system is fundamentally flawed and just another part of the casino mentality that has corrupted out financial structures.
    Superannuation needs a total re-vamp but no one's got the guts to do that because the major banks and finance institutions would be the only losers. Bugger the people!!!
    Rodent
    18th Jul 2016
    4:37pm
    Dear Old Geezer

    Your words-
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
    All I see is that this new asset test is just undoing the wrong doings of the past.
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
    Which translated BY YOU must mean too many Pensioners getting too much in Pension.

    Sorry but if that's all you can see, then open your eyes a bit more please, and explain this inequity/unfairness re the Single Home owner, why should that Specific Group of Pensioners be so harshly treated? makes no sense to me

    At $500k a Single Home owner now receives $11,372pa after Jan 2017 that will be $3221
    At $500k a Single Non Home Owner now receives $17,280pa after Jan 2017 that will be $18,281
    At $500k a Couple Home Owner now receives $26,315pa after Jan 2017 that will be $24,502
    At $500k a Couple Non Home Owner receives $30,468 and after Jan 2017 the same $30,468
    Old Geezer
    18th Jul 2016
    4:58pm
    Seems fair to me as all they have to do is use their capital until their assets get to a level where they qualify for the pension again.

    I know of one old lady that was in a retirement home for 5 years and the pension paid her fees and she died with $100,000 more than when she went into the retirement home. That tells me the single pension asset test is too high.
    Rosret
    18th Jul 2016
    6:33pm
    Where do these pensioners live? Rent is $400-500 a week. How does a pensioner live on $11372 let alone $3221. I seriously don't understand this reality.
    So what is the idea - spend the $500K first?
    Old Geezer
    18th Jul 2016
    7:06pm
    Yes spend the $500k until their asset level qualifies them for the pension. You can spend your capital as well as the income to live in retirement. That is what the calculators calculate when they work out how long your money will last. What do you want to bury your money with you? Let me know and I'll exchange it for a cheque to bury with you instead.
    *Imagine*
    18th Jul 2016
    7:56pm
    The assumption here is that the 500k asset is fluid capital. What about the owner of a cheap holiday shack, similarly the owner of a scrub block or collection of three vintage vehicles, all of which have increased in value over the years? These people have enjoyed years of interest in their hobbies and are now being told to sell their interests, ignore their hobbies and sit at home doing nothing, in order to qualify for a part pension. Nowhere else in the developed world would a Government be so mean and shortsighted as to require active older people to give up, and cash out, interests and hobbies in order feed themselves.
    Old Geezer
    18th Jul 2016
    8:05pm
    Unfortunately that is the price you have to pay to be on welfare. You have assets so if they are not liquid they only have fire sale value. If you have that much in fire sale value assets then you have more than enough to support yourself.
    Anonymous
    19th Jul 2016
    11:10am
    Only the lowest kind of animal would want a society in which the only determinant of a quality life is MONEY. What a sick society we have become when some people think that the underprivileged should work their guts out to make a nation in which the selfish privileged can prosper, and there should be NOTHING given back to the slaves at the end of their lives.

    Old Geezer, you would have done well in the South of the USA before the civil war. You are as vile as the slave traders who made their fortunes selling black people. The fact that you don't discriminate on race or colour does NOT make you better than them.
    Old Geezer
    19th Jul 2016
    7:39pm
    Rainey I do very well here and now thankyou.
    Anonymous
    20th Jul 2016
    7:51am
    Yes Old Geezer, by being the lowest kind of narcissistic self-serving MONSTER on earth and devouring others. Congratulations!
    mike
    18th Jul 2016
    4:55pm
    Lets get one thing straight, Blasted Turnbull was warned that the forced council amalgamations would impact on the Federal elections, and some marginal seats , such as Barnaby Joyce, for example, were taken out, (shows what a scam the whole idea was), However, 19 councils were sacked, others are still fighting in courts. People were very very angry. Andrew Gee, in the safe seat of Calare was asked to intervene, but the very stupid, arrogant twerp felt he was in a safe seat and didn't need the extra votes, well the very ignorant arrogant twerp had an 9% swing against him, and whilst the arrogant twerp still won his seat, where the hell did he think those votes would go to in the senate. To the small parties of course, and multiply that by a million votes nation wide, and you can see what a mess of the election that very ignorant arrogant twerp accomplished.
    Fready
    18th Jul 2016
    4:58pm
    What is not appreciated by many who contribute to this blog is that there needs to be significant reward for those who choose to participate in super because many lock access to their funds away for 40 years or more (50 in my case). On the risk/reward principle the reward needs to be significant because the risk increases each time politicians change the goalposts. Re comment from Wstaton above that self-funded retirees are a drag on the Nation he/she conveniently forgets these things and the fact that contributions tax has been paid upfront on non-concessional contributions. Everyone had the same option to participate in super.!! If it were not for self-funded retirees the pension would have to be less. All retirees should support the idea that superannuation is there to minimise the number of people who NEED a pension.
    All retirees
    Alex
    18th Jul 2016
    5:56pm
    Fready how do you work out that everyone had the same opportunity to participate in super? The present scheme of everyone paying a percentage of income into a fund and the employer making a contribution only come into being in the 1990s. Not much use to people who started work in the 1960s. Before that it depended on what industry you worked in and what your job description was whether you had super or not. For example if you worked as a casual employee as a teacher or public servant for example you were not allowed to contribute to super even though teachers and public servants had super funds. Old schemes, where they existed, were based on after tax contributions. People on lower incomes who worked hard all their lives did not have much money left over to contribute to super and very often did not have industry funds that allowed them to make a contribution
    Old Geezer
    18th Jul 2016
    7:17pm
    Super bonds have been around since the 70s so there is no excuse in not contributing to super. I remember buying super bonds back in the 70s myself. That's getting close to 50 years ago so most people retiring today would of had the opportunity to participate in super but didn't bother.
    Alex
    18th Jul 2016
    8:10pm
    Old Geezer that is very judgemental from you armchair. I am sure you did not rely on your super bonds for your retirement. They have not shown a great return over the years. People invested in many things to try to secure savings for retirement but people on low incomes, and there are many of them, have not been able to accumulate significant savings. They will not be able to do so in the future either which is why we need a proper contributory pension. Sometimes we need to see past ourselves.
    Old Geezer
    18th Jul 2016
    8:25pm
    Yes I do see past myself and I know many people who have been on relatively low incomes who today are fully self funded retirees. I know of one person who has only worked 18 years in their life and today is a multimillionaire fully funding their own retirement and having a ball doing so. Another wealthy low income self funded retiree has just asked me to take them to the airport as they are off to Canada for a few months. It is not a matter of what you earn it is a matter of what you do with what you earn. A low income is just another excuse of why you haven't what you should have done,

    The returns on my super bonds were OK but I knew I could do better so started by own SMSF and transferred them into it.

    I certainly don't want a proper contributory pension as all it does is prop up those who fail to help themselves at the expenses of those who do what it takes to secure a comfortable retirement. In other words it promotes laziness in people.
    Anonymous
    19th Jul 2016
    11:07am
    Old Geezer, one can only hope that disaster strikes you and you learn what life is like in the real world, you arrogant presumptuous, nasty person.

    Sure, SOME folk have good fortune, are capable, smart, well-connected, strong, healthy... etc. SOME PEOPLE. NOT ALL PEOPLE.

    You have no idea what challenges others face, so get off your soap box and stop being such a nasty self-centered prick and show some humanity.
    Old Geezer
    19th Jul 2016
    3:57pm
    Rainey I have been through more disasters that others do in 3 lifetimes so one more won't hurt me. Unfortuantely I do know the challengers others face after having faced many challengers myself.

    You have no idea of my life at all but yet feel the need to bring out your own frustrations on me. Good I have broad shoulders and can have a good laugh at your expense.

    I'm not stupid as I know what really happens. I also know that no matter how much people got in welfare they would want me but really need much less.

    I tell it like I see it not like others want ti o hear. The gig is up people you have had it too good now fo too long.
    Anonymous
    20th Jul 2016
    6:37am
    Old Geezer/Bonny, your narcissism is showing, and it's not a good look. You may be bordering on being a sociopath, actually. Only a very mentally ill person is incapable of comprehending that everyone isn't you or that other guy you admire for his money-grubbing. Sure SOME people can rise above certain types of disadvantage - though you have absolutely no concept of the kinds of challenges others face and to presume you have faced anything like as bad is to confess total arrogance and extreme stupidity.

    You are an ASS. You ASS - U -ME everything about everything, and then sit on a judgment throne pretending to be God Almighty and dictating that people who haven't been as fortunate as you should suffer misery. YES FORTUNATE. Not smart. Not capable. Not skilled. Not strong. Not resilient. You are NONE of those things. Because if you were, you would understand the struggles of others and have empathy. YOU ARE PRIVILEGED. In what way, specifically? I don't know. Maybe privileged to be born with a different kind of brain or to have different childhood influences to many others. There are all kinds of privilege. The point is that those who DON'T enjoy privilege, often CANNOT - no matter how hard they try - rise above disadvantage or crisis. And disadvantage and crisis comes in very different forms. It depends on the specific form and type just how hard it may be to rise above it.

    I'm lucky. I rose above hideous disadvantage. But I did so with my eyes open and with empathy for and understanding of those who can't.

    In a DECENT society, EVERYONE acknowledges that we need to support the less advantaged and not condemn people who haven't been as successful as us. That's what makes humans a superior species to animals. Except we are not any longer. Greed and selfishness has destroyed that superiority. Now, some among us are far worse than the nastiest, most destructive animals and should be caged or destroyed for the protection of the rest of society.

    I repeat, get off your soap box and stop being such a NASTY PRICK and show some humanity. Stop bullying with your vile, self-serving nastiness, condemning people who are far, far, far better than you, and who gave far more to this society than any self-obsessed money-grubbing egotist who clearly focused solely on accumulating wealth for selfish purposes and is so self-absorbed he/she can't comprehend the value of unpaid or low-paid services and the moral rights of those who provide them.

    MONEY IS EVIL. Those who focus on accumulating it are evil. Those who seek to deny fairness and kindness to people who don't accumulate are EVIL. We need balance in our world. In a capitalist society, money plays a role. But when it becomes the sole determinant of the right of every being to a decent lifestyle, terrorism and revolt takes over. It is beginning. It will continue. I fear for the future of this country, because too many people are engaging in the vile behaviour that leads to terrorism. And they are too dense to see that THEY are the problem.
    Rae
    20th Jul 2016
    12:59pm
    Rainey all it would actually take is for all over 65s to just stop spending for a fortnight.

    Just one week or two of not going out and eating out the home pantry.

    There would be such a screaming from the business community as you couldn't imagine.

    We are our own enemies by playing by their stupid rules and not using our quite convincing demographic power.

    I'd say most aged pensioners are quite happy as Bonny states.

    It is the frugal savers being hit and they hate us because we won't give them our money.

    Give it to your kids, save just enough to last the 5 years and go on the pension as being this upset is simply not good for you and it won't change much.

    There could very well be a backlash come Feb next year when the cheques stop but as many will get more even that may not affect anything.
    flowerpot
    18th Jul 2016
    8:07pm
    How about making the Age Pension available to all and on a sliding scale according to how many years you worked and paid in? This is the UK system and seems to work well. The Age Pension there is seen as a reward for services rendered, and not a benefit, but if you don't pay in you don't get it. That is how a society works - everyone benefits from their labour. I have a few rich friends over there who don't claim it -but they could if they wished.
    Alex
    18th Jul 2016
    8:14pm
    Yes flowerpot. There needs to be a universal system that takes the confusion out of retirement and that covers everyone. Thirty years of contributions used to be the requirement for the aged pension. The system was able to make allowances for people who could not make that for health or other reasons.
    GeorgeM
    18th Jul 2016
    9:48pm
    Agree, flowerpot. They could get Centrelink out of the picture as well, as ATO can administer it.
    Rosret
    19th Jul 2016
    8:37am
    I agree totally. Then maybe people will stop "hiding the money under the mattress" and we wouldn't need a huge infrastructure of government employees treating the aged like criminals.
    Bonny
    19th Jul 2016
    7:29am
    On reading most of these comments it is clear that we have a lot of people who ignored the need to provide for their retirement and were prepared to rely upon welfare instead. It is also evident that people are being stupid and are not prepared to spend their capital to enjoy thier retirement. Reality is that if you don't spend it someone else will like it was a lottery win. I have no problem in spending the kids inheritance while I can. Just ordered a new caravan with all those things on my wish list. Booked another cruise and looking at further trips.

    Those who managed to save enough to be fully self funded retireees save the country heaps by not accessing the pension so why should they be given some of those savings in the form of tax free income. You need quite a nest egg today to earn enough interest just to ma ke it through the couple's tax free threshold of about $58,000.

    As for pensioners losing out due to assets changes I think OG is right about the government using Centrelink records which show pensioners are not spending the capital they saved for retirement. It says to the givernment that they are getting too much which could be better spent elsewhere. As for those expensive homes then that is simply very unfair.
    *Imagine*
    19th Jul 2016
    8:49am
    Like you said earlier Bonny, oh sorry, your avatar, Old Geezer. Retired people do not pay taxes until an income of about $60 000 or $58 000. Well I have a PAYG summary here from 2015/16, I am 71 and receive an SA Government pension of $41 000, the tax free component is $1300 and tax offset $4124. I have paid $1632 in tax. Because my wife and I receive $14000 from an overseas pension I get a bill for another $3000+ tax each year.

    Therefore I pay $4 600 tax on $55 000. So please get your facts right.
    The FACT is that the system is stuffed and needs to be scrapped in favour of a fairer more equitable and understandable approach to retirement income.
    Anonymous
    19th Jul 2016
    10:47am
    Why do the arrogant privileged always assume that someone who can't fund their own retirement simply ''ignored the need to provide for their retirement and were prepared to rely on welfare instead''. I'm sure there are many for whom that is true, but equally there are hundreds of thousands who simply never had the opportunity to accumulate assets to fund their own retirement, and it's a sick puppy who denigrates or disadvantages others based on wild assumptions, made with a complete lack of empathy and a total absence of understanding of the challenges the real world presents to many underprivileged.

    It makes me ill to see how self-serving some people in our society are.

    Bonny, pull your arrogant bullying head in and show some respect. We've seen a massive downturn in the economy which has wiped out the savings of many. Lots of people simply never get the chance to acquire any savings. Low earnings mean they struggle from day to day just to cover the cost of food and shelter. Others face a major health crisis or natural disaster that wipes out their savings. Some spend decades caring for loved ones, earning next to nothing and just scraping by, or spend everything they have trying to help a loved on facing health challenges of disability. I know women who were left widowed with children, had little education, and struggled just to keep their children fed and clothed. They had no hope of saving for old age.

    You really are nasty to suggest that these people were negligent or careless.

    As for being ''stupid'' not spending capital, it depends entirely on how much one has, age, and what future needs are envisaged. It may well be very, very, very STUPID to spend capital in the present environment - particularly if to do so one has to cash in investments at a huge loss that show potential to recover.

    The government is WRONG WRONG WRONG on every count in regard to retirement funding, as SO ARE YOU. Yes, to a point, giving owners of expensive homes pensions is wrong. There should be some limits. But care must be taken not to destroy the lifestyle of people who have worked hard and saved well and DESERVE the right to enjoy what they acquired. While we are funding massive tax concessions on superannuation, negative gearing, capital gains tax, and tolerating tax dodging by big corporations and the very rich, we should NOT be persecuting battlers who NEVER HAD THE OPPORTUNITY of any of those benefits, but managed to put aside some PERSONAL saving through sacrificing lifestyle.

    The government is sending the WRONG message to younger Australians by denying retirees fair reward for hard work and saving. Our future is in grave danger if we continue to discourage enterprise and punish savings.
    Old Geezer
    19th Jul 2016
    4:11pm
    Bonny is right it is $57948 before a couple over pension age pays any tax.

    https://thesmartmoney.com.au/how-much-can-a-retiree-earn-before-paying-tax/

    So it sounds to be like if you are over pension age "Imagine" you are paying too much tax.
    *Imagine*
    19th Jul 2016
    6:46pm
    Thanks Old Geezer but you might note the first sentence of your link:
    "If you’re aged 60 or over, any withdrawals from a taxed super fund are completely tax-free. If you have an untaxed fund such as a government super fund, different rates may apply."
    In fact different rates do apply - I paid 6% 0f my wages into the SA Govt., rising to 9%. However it was a giant Ponzi scheme and was untaxed so I now do pay tax. As I said the system is too complex and we are all treated differently depending on where our income is sourced or our assets are based. It is a mess and needs sorting.
    Anonymous
    22nd Jul 2016
    7:10am
    Anyone pick up on Bonny's LIES? In other posts, she claims to live on a tiny income - less than the pension - and now she's raving about buying a caravan and taking cruises. Bonny, liars need good memories. Obviously, your memory isn't up to the requirement, so you'd be wise to stop telling whoppers. Your nose must be very, very long indeed!
    Abby
    31st Jul 2016
    1:33pm
    Well said Bonny
    Good for you enjoying your retirement :)
    4b2
    19th Jul 2016
    9:35am
    I think the government should introduce a tax levy on interest earned on retirement funds for individuals who have more than $.16 million in their fund. The interest should be at the same rate as they received I.E %15, treat this interest as dividends.
    Rodent
    19th Jul 2016
    10:01am
    Dear Old Geezer, or are you really Bonny?
    Your comments in reply to what I posted about Pension comparisons etc
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
    Seems fair to me as all they have to do is use their capital until their assets get to a level where they qualify for the pension again.
    >>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
    If that's you view about a Single Home Owner Pensioner with $500k in assets receiving a pittance COMPARED with the other Pensioner Types at the same $500k Assets then you are clearly seriously out of touch with reality. I don't think I will waste any more of my time in responding to some of the BS you write, because you have a narrow, blinkered view of reality.
    Anonymous
    19th Jul 2016
    10:49am
    I agree Rodent. Sad that there are people in this world who are so arrogant, uninformed, out of touch, self-serving, and nasty.
    Anonymous
    19th Jul 2016
    11:40am
    Unfortunately, Rodent, Greed blinds fools so that all they can see is ''money I can take - gimme gimme''. I sometimes wish the policies Old Geezer and Bonny support would be implemented. We'd certainly have chaos, and I suspect people like them wouldn't survive it for long!
    Old Geezer
    19th Jul 2016
    3:45pm
    These single home owner pensioners have $500K to live on which is far from a pittance. I'm not stupid but I don't know about others at times. That is the reality of it all.
    Anonymous
    19th Jul 2016
    4:48pm
    Old Geezer, $500,000 might be far from a pittance for some, but it depends on future needs and inflation. It could end up being very little for someone who might live 30 years if inflation continues as it did over the last 30 years. There's also the issue of falling asset values. We are in a changing economy. Not all pensioners are old.

    The reality of it is that the likes of you are short-sighted, selfish, and arrogant in the extreme and don't recognize the realities of life.

    As for claiming people saved it for retirement - BULLSHIT! I DIDN'T. I certainly DID NOT go without restaurant dinners and holidays and nice clothes so I could save TAXPAYERS in my later years. I saved it to meet future needs I KNOW will arise that can't be met from a miserable pension. Lots of us had no superannuation. Savings are PERSONAL and NOT intended to benefit other citizens - most of whom lived more lavish lifestyles and could have been far better off than I am if they hadn't.
    Anonymous
    21st Jul 2016
    6:24am
    And YES, Rodent, Old Geezer is Bonny. Exact same comments and quoting the same nonsense. The claim about old ladies with less than $500,000 growing their wealth in nursing homes was a classic. What utter rot! Possible in past years maybe, but not now. First, they pay close to that amount for a tiny room - yes, as much as the cost of a decent family home just for a tiny room! That money is returned months after death - AFTER a costly process of obtaining Probate and having a lawyer make a claim for the estate - but without any interest or earnings, so it shrinks in value. Then they pay 85% of their pension for daily care PLUS costs of medicines (which are outrageous because doctors prescribe something, it's bought, they change the dosage, it's discarded and replaced at patient cost. I believe there are also dishonest ripoffs. There's no checking system in place to allow verification that what was charged for was actually supplied!)

    On top of the 85% of pension, they pay for outings, clothes and creature comforts - IF there's anything left after the medicine ripoffs.

    If they happen to have any income above the aged pension, they lose a great whack out of that as well as the 85%. And of course their pension is reduced as well.

    It would be extremely rare for any pensioner with less than $500,000 to grow their wealth in a nursing home. But in Bonny/Old Geezer's world, one swallow makes a summer. They find, or lie about, one person and then claim the whole world should be changed based on the assumption that EVERYONE is in that same situation.
    Radish
    23rd Jul 2016
    4:26pm
    Whenever there is a new Apple phone on the market...is it our age group who are lined up to buy the "latest" ????even though the $1000 phone bought last year is perfectly good....not it is not...

    No wonder so many younger people (NO I am not talking about all of them) cannot afford a deposit on a home.

    If people wish to live that way...that is fine...go for it...but don't expect people to feel sorry for you.

    19th Jul 2016
    11:19am
    Greed really does addle the brain, doesn't it? Or maybe many of the rich and privileged are just born STUPID. What an idiotic proposal to suggest that anyone who was privileged enough to enjoy huge tax minimization benefits to accrue well over $1.5 million should continue to be indulged, while those who worked their guts out for 40+years for minimal income, and had no superannuation or tax minimization opportunities and none of the taxpayer-funded benefits (like free tertiary education and business grants) should have to give back everything they worked their whole life to acquire just to survive old age!

    We'd really have a wonderful country if this IDIOTIC approach were taken. Why would anyone bother to work? Just go steal and plunder from the greedy bastards who exploit and demand handouts. There would be NO INCENTIVE for anyone who can't get very rich to be bothered working at all. We'd have total anarchy.

    I say, bring it on Old Geezer and Bonny. Let's implement your STUPID GREEDY proposal of making aged pensions a loan against assets, and let's see what happens to the nation as a consequence. Good luck! You'll need it!
    Old Geezer
    19th Jul 2016
    3:42pm
    Yes bring it on so our young taxpayers can get a break from the ever increasing taxes they will have to pay as more and more baby boomers access the pension and hoard their assets for others to spend like a lottery win when they die.

    No these pensioners are the greedy ones. They saved for their retirement and now don't want to spend it. When single old ladies with less than $500K can go into nursing homes and accumulate more money while the government pays them a pension there is something very wrong.
    Anonymous
    19th Jul 2016
    4:36pm
    Wish I could find some of these over-burdened young taxpayers. Every young taxpayer I know is living in a mansion and wasting money like there's no tomorrow, living a life I couldn't dream of when I was struggling to feed and cloth kids and pay off a massive mortgage. Families claiming to be struggling are taking their kids overseas for holidays!

    I seriously doubt that anyone could go into a nursing home with less than $500K and accumulate more while drawing a pension. That's just CRAP! Have a look at what nursing homes are charging. They charge 85% of the pension for someone who has nothing else PLUS costs for medicines and extras. Anyone with more income than the pension gets whacked very hard indeed. And then there's the huge accommodation cost. Someone with less than $500,000 would now be paying most of that as accommodation bond and getting $0 return on it until 6 months AFTER their death.

    But that's entirely irrelevant to the issues for a 65-year-old who might need to make hard-won savings last for 30 years.

    The problems are far more complex than your nonsense suggests, Old Geezer. As usual, when IDIOTS oversimplify everything out of greed and self-interest, they get it all wrong.

    I am in favour of sensible reform of the pension system, but demolishing the income of someone who might have been forced into early retirement with modest savings, health challenges or disability, and potentially high future needs is STUPID, and it won't help the nation at all. It will come back to bite hard in future years. Meanwhile, demolishing the rewards of saving is going to see many more young folk taking overseas holidays and dining out instead of saving for old age, because there's just no reward now for being frugal and responsible.

    Meanwhile, the stinking greedy well-to-do are whining that they want MORE MORE MORE and not prepared to give up their obscene tax concessions on their millions, but they LIE about concerns for young taxpayers.

    Like I said... bring it on, Old Geezer. Take the little that battlers have managed to accumulate over a lifetime of being exploited and abused, and you WILL have rebellion.
    ex PS
    20th Jul 2016
    6:32am
    I really do gag when I hear about the poor young workers and gredy baby boomers. What a stupid. lazy comparison.
    We all had and have our own problems, the difference is I have seldom heard a boomer blame the generation that went before them for all of their problems.
    Oh, the oldies had a war and spent all our money, Oh, they went through a depression and did not leave us an inheritance, Oh, they did not earn enough to buy a house that we could inherit.
    These statements were never made but if they were they would have been just as fekless as:
    Oh woe is me I can't afford to buy my first home in the centre of the CBD, Oh, I buy a new car every three years but can't afford the deposit for a home, Oh, I buy a new $1,500 smart phone every time a new model comes out but need assistance to pay for child care.
    My son never complains about what I may have and what he hasn't got yet, he will work hard improve his education in order to get better jobs and he will make it with a bit of help from his family, because that is what family is for.
    Old Geezer, you claim that you have done well financially, why don't you help the poor young workers in your family out, why do you expect the government to do it with other peoples money? Why should we be expected to provide welfare to other peoples children?
    Anonymous
    20th Jul 2016
    6:52am
    Well said, ex PS! And I agree. My neighbours are whinging about being hard up because they pay so much tax. They take 3 kids overseas every year for holidays - 6 weeks minimum per year. They eat out twice a week - with the whole family. They live in a luxurious 5-bedroom mansion, near new, in an up-market suburb, with a swimming pool in the yard and landscaped with fancy fountains. they have three new cars (bought one for the daughter for her 16th birthday - brand new and expensive!) They hire a cleaner and a gardener and they send their kids to private schools. But, poor creatures, they pay so much tax that they can't afford to pay their council rates bill. And it's all the fault of the greedy baby boomers!

    Sadly, they are TYPICAL of all the young taxpayers I have met. There are very few paying more than minimal tax who come even remotely close to understanding the struggle I had to raise my kids and pay off a home at 18% interest.

    I'm heartily sick of the BS. I am not one of the part-pensioners who will lose out in January, but if I were I would be furious, because I don't believe ANY of them sacrificed lifestyle to save so that:
    (1) people who lived more lavish lifestyles and only saved half as much can get more
    (2) well-to-do younger folk with huge superannuation accounts can retain huge tax concessions
    (3) companies that already minimize tax can get fat handouts to give more to overpaid CEOs and directors while sacking staff
    (4) foreign companies can pay less to the ATO and more tax in their own country ($11 billion to the US IRS)

    I suspect every last one of those who are losing a massive whack of income in January 2017 would happily take a modest cut in income to facilitate increased disability and sickness benefits and an increase in the basic aged pension for people who have nothing. They may even happily take a modest cut in income to facilitate an increase in unemployment benefits - as long as diligent policing is in place to try to ensure recipients are genuine. They would probably take a modest cut in income to create a pool of money to employ a few thousand people in new infrastructure projects.

    NONE OF THAT IS HAPPENING. These people are being ROBBED of their life savings to give it to give it to people who live far better than they ever dreamed of, who didn't work as hard, who didn't go without to save, and who have NO MORAL RIGHT AT ALL to steal from hard working Australians who deserve to retain what they worked for and who earned their part pensions.

    And what is really sick is that much wealthier SCUM are so selfish as to endorse this theft - but listen to them SCREAM when someone threatens to reduce their obscene superannuation tax concessions!
    Anonymous
    20th Jul 2016
    7:04am
    Of course everyone with a brain knows what's really happening is an exercise in social engineering. Wipe out the middle class. Stop people rising above their station. We've been through a period when people who were born poor could rise to middle class status - become professionals or company directors or CEOs or start lucrative businesses. Some who were born very poor and disadvantaged are, in the twilight of their lives, living in lovely new homes in upmarket suburbs, next to silver-spooners. They are enjoying a comfortable lifestyle. They are holidaying occasionally and eating out sometimes. And some of them remained working class all their lives, yet can live next to silvertails and enjoy a good life. Goodness, how appalling! And now the poor poor rich can't have 6 servants at their beck and call - servants who are so desperate they will tolerate hideous abuse just to be sure of a daily meal.

    What's really happening is that the rich are fed up with this situation and want to return to feudalism and having serfs. So they are actively working to destroy opportunity (make education accessible only to the rich), to ensure saving yields no benefit unless you can get VERY rich, to grind the better off retirees who are not wealthy down to the same level as those who didn't rise above their station, and to make sure all the benefits of the nation's wealth accrue only to the silver spoon brigade, and the rest of the nation struggles.

    Let's end penalty rates, push low wages down, make the sick and disadvantaged poverty stricken, strip older savers of all their assets, deter battlers from saving (demonstrating that it is futile)... all part of a grand plan of social re-engineering. And unfortunately too many blind fools supported the party that is most enthusiastic about progressing the re-engineering (not that Labor aren't also helping it along, but they are not quite so blatant about it!)
    Rodent
    19th Jul 2016
    4:02pm
    Dear all
    This was in AFR, by John Daley, some agree with his views others don't, I am putting this he to challenge some views, and promote discussion. Apologies to those who have already read it

    Coalition members meet today in Canberra to consider proposed changes to superannuation A few facts may help them decide.
    The proposed $25,000 cap on pre-tax super contributions will have most effect on older men with higher incomes. Nearly four in five of those making pre-tax contributions of more than $25,000 a year are aged 50 or over. Of these, more than half have already accumulated super balances of more than $500,000. Few of these people will ever qualify for an age pension.
    Some argue the $25,000 cap will make it harder for those with broken work histories – including women and carers – to make catch-up super contributions. But in fact it's hard to find many people on even middle incomes who make large voluntary contributions to super.
    Tax planning
    Instead, high annual caps mainly create tax-planning opportunities for people who already have enough resources to fund their own retirement. Just 51,000 women earning less than $79,000 a year make pre-tax contributions of more than $25,000, compared to 153,000 men earning more than $79,000 a year.

    Indeed, the proposed $25,000 cap doesn't target super hard enough. Our Super Tax Targeting report shows that people contributing "just" $11,000 a year to super, together with other savings, are likely to enjoy a comfortable retirement without an age pension. The report also shows that very few will ever come close to breaching the new $25,000 cap.
    A $500,000 lifetime cap on post-tax contributions would also help to align super tax breaks with the Government's stated objective for superannuation: to supplement or substitute for the age pension. In reality, after-tax contributions do little to increase retirement savings. Instead, most people who make them already have large balances and typically contribute from existing pools of savings in order to minimise their tax.
    Of all post-tax contributions, about half are made by just 200,000 people who already have at least $500,000 in their superannuation. Only 1.2 per cent of taxpayers have total super account balances of more than $1 million, yet this tiny cohort accounts for a quarter of all post-tax contributions. By contrast, the 70 per cent of taxpayers with super balances of less than $100,000 make just 9 per cent of total post-tax contributions.
    The lifetime cap
    Critics who say the $500,000 lifetime cap is too low usually neglect to mention that someone who has already made post-tax contributions of more than $500,000, are so well off they are very unlikely to qualify for an age pension. $500,000 is more than 95 per cent of taxpayers have in super right now. Even in a mature super system, where workers contribute at least 9 per cent for their working lives, most people will retire with less than $500,000 in super.
    Accounting for post-tax contributions made in the past – in this case since 2007 when reliable records are available – helps to target the reforms. The alternative of grandfathering the $500,000 cap so it applies only to new contributions would lock in the excessive generosity of the former Howard Government's 2006 super changes. Younger generations, on the wrong side of the drawbridge , would lose out having paid higher taxes to fund benefits for older generations .
    Coalition MPs opposing parts of the Government's super package have few alternatives.
    One option would be to further lower the $1.6 million cap on tax-free super earnings in retirement. For example, the Association of Superannuation Funds of Australia suggests that single retirees need super assets of only $545,000, or $640,000 for a couple, in order to achieve a comfortable retirement. Taxing all earnings in retirement at 15 per cent (rather than just earnings on balances over $1.6 million) could save a further $2 billion a year.
    Alternatively, taxing contributions at 30 per cent for everyone earning more than $180,000, rather than $250,000 as proposed in the Budget, could save an extra $1 billion a year.
    Yet these options are unlikely to mollify unhappy Coalition MPs, or their donors.
    The government could make alternative cuts. Not proceeding with the "carry forward" measure would save $250 million a year by 2019-20 and more in future years. Abandoning the Low Income Superannuation Tax Offset for low-income earners would save $700 million a year, but is unlikely to be popular with the broader electorate.
    It is hard to see how the Coalition party room can oppose the proposed reforms if it accepts that the purpose of superannuation is to supplement or substitute the age pension, and that the country must live within its means.
    John Daley is chief executive of the Grattan Institute
    Old Geezer
    19th Jul 2016
    5:32pm
    Why wold you invest more than you had to into super with all those restrictions? I certainly would not. There has to be some incentives otherwise it's just plain stupid having money in super.
    Anonymous
    20th Jul 2016
    7:55am
    And this stupid comment from someone who claims there should NOT be incentives for those who can only save about $800,000 and can't secure enough investment return to live without a tiny part pension. Selfish hypocrites demand ''incentives for me and my mate - but rip it off others who have less and destroy their incentives''. Got to give it all to the greedy rich. Can't have battlers claiming a share of the booty!
    Rae
    20th Jul 2016
    1:08pm
    You got it in one Old Geezer. Just plain stupid. But compulsory for some .

    I had to pay it in my position as a PAYG worker but not as an owner of businesses.

    Needless to say I made more out of my savings than the fund did.

    It should not be compulsory for some and not others.

    Either everyone pays in or no one has to.

    Another example of one rule for them and another quite different for us.

    20th Jul 2016
    10:30am
    I think those who are ranting about reducing tax for younger folk are missing the critical point of the aged pension argument.

    The most important legacy we MUST leave the next generation is the security of knowing they will be respected and comfortably provided for when they are too old to earn their own way - regardless of what trauma, crisis or disadvantage might reduce their capacity to save to be self-supporting.

    If the younger folk are looking at baby boomers with envy, they need to be reminded that many of us did it far, far tougher than they could ever imagine - and we EARNED our present status. It WILL come to them in time - IF they don't allow their inheritance impatience and general greed and selfishness to wipe out the promise of a comfortable retirement for all.

    Do they really want to create a world where they get to 70 and find all their efforts to that point were in vain? Where the government takes their house on death? Where they are compelled to eke out an uncomfortable existence on ''welfare'' after draining their savings just to qualify for sustenance. Is this the world they want? Is it the world we want to bequeath to them?

    Intelligent younger Australians will be delighted to pay tax to continue funding a generous retirement system that is inclusive and respectful, knowing that their time will come and when it does, they will reap huge rewards for their common sense.
    Rae
    20th Jul 2016
    1:15pm
    They also need to be reminded of time in the market.

    Of course some older savers will be wealthier than younger people.

    I'll bet there are a lot of younger people out there wealthier than many of the pensioners but we won't talk about them.

    They are secret and have to be protected. They might be kidnapped so keep their secrets secret.

    Yes I suspect the next move might include a grab for the house as the nursing home owners got away with it without any fuss at all.

    We just paid it right like good little sheep.

    Buy a very small farm Rainey under a family trust structure.
    Near a larger regional centre with a hospital.
    With permanent water and wood.

    Then you can pass it on, land taxes probably won't apply and it isn't counted in the same way as a house.
    Rodent
    20th Jul 2016
    2:49pm
    All it was 'interesting to read the Janet Albrechtsen article in today's Australian- Turnball Tax Reform ---- perhaps some here might find it interesting, not the use of the word grandfathering as applied to super, pity when Pensioners complained about the Jan 2017 changes not being Grandfathered, the reason was it was all to difficult.
    Any way its an interesting article.

    I notice that Welfare is getting a mention again in these posts. For those that want to understand it better go to this link
    www.aph.gov.au/About_Parliament/Parliamentary_Departments/.../WelfareSpend
    You will find an interesting Govt Doc Dec 2015 that is all about -What counts as Welfare Spending- this could provoke some discussion between posters
    Spitfire
    20th Jul 2016
    10:56pm
    Next step will be to abolish all pensions and superannuation, and to establish the Mandatory Euthanasia Act.
    Anonymous
    21st Jul 2016
    6:12am
    Shhhh! Goodness, Spitfire,... don't publish ideas like that. Old Geezer and Bonny will run to the Government suggesting anyone who isn't wealthy enough to be totally self-supporting should be euthanized the day they stop work, and the LNP will embrace the idea enthusiastically. They are already screaming that battlers who need a little support in old age should have their houses, and any other assets they've accumulated over decades of hard work taken from them to fund continuation of OBSCENE tax concessions to the rich. They would love the idea of euthanizing anyone who isn't in their elite privileged class.
    Spitfire
    22nd Jul 2016
    5:52pm
    As long as they commence the process with politicians, it will take a while to get around to us mere mortals.
    ex PS
    23rd Jul 2016
    6:15am
    Spitfire, don't you see the governments clever plan, they want to make life so miserable for retirees that they will propose Mandatory Euthanasia for themselves.
    They are just working out how much they can charge for the required drugs and how they can confiscate the property of those who take advantage of the "End it all policy".


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles
    you might also be interested in...

    Retirement Planning

    When retirement planning becomes life planning it is a challenging, fun and fulfilling task.

    Age pension explained

    Anne explains whether you will qualify for an Age Pension and simplifies some of the more complex scenarios you may encounter dealing with Centrelink.

    Cruising

    Got the travel bug or need a break? Take a look at our latest Seniors travel discounts and deals.

    Meal Ideas

    Be inspired by our easy meal ideas. Search through hundreds of recipes to find the perfect one for any occasion.

    Trivia

    Have some fun and keep your mind active with our Daily Crossword, Trivia, Word Search and Sudoku Games.