3rd Dec 2015
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Family home safe from assets test
Family home safe from assets test

The Productivity Commission claims that by including the family home in the Age Pension assets test, it would save the Federal Government up to $6 billion a year.

The report Housing Decisions of Older Australians states that around 360,000 pensioners would lose their entitlements if the family home were included in the assets test.

However, Federal Treasurer Scott Morrison has confirmed that the Government will not include the family home in the Age Pension assets test.

“The Government's policy on this issue is well-known,” Mr Morrison said in Parliament on Tuesday. “There is no change to the Government's policy.”

Around three in every four Age Pensioners own their home. In fact, older Australians hold around $926 billion worth of home equity. According to the report, this is an untapped source of retirement income.

The report claims that including the family home in the pension assets test may make Australia’s tax system fairer. It also states that retirees, especially those who are asset rich and cash poor, could live a better quality of life in retirement if they were to draw on the equity of their assets instead of claiming a pension.

The Commission believes that “there is a strong case on equity grounds for setting limits on the value of the principal residence that is exempt from the Age Pension means test” but acknowledged that it couldn’t happen in the immediate future.

And, according to Mr Morrison, the Government wasn’t considering means testing the family home before and it won’t be now.

"The idea that this Government would put the family home in the assets test for the pension is just not under consideration," Mr Morrison said earlier this year. "Under no plan is there any idea to include the family home in the asset test."

Read the Productivity Commission research paper
Read more at The Guardian

How do you feel about Mr Morrison’s stance on this issue? Is this good news for pensioners? How do you think it will bode for retirement income sustainability in the future?





    COMMENTS

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    3rd Dec 2015
    9:54am
    Seem to recall a promise of ''no changes to pensions'' too, and ''no changes to health or education'' and ''no new taxes'' and..... Can't trust any of them for five minutes. Morrison's promise is meaningless and will only inspire confidence in gullible fools.
    Anonymous
    3rd Dec 2015
    9:56am
    Then again, maybe they've finally realized they've gone too far attacking retirees, considering the numbers and voting power. They've certainly convinced a lot of older Australians that the government hates them and considers them an unwelcome burden on the taxpayer.
    MICK
    3rd Dec 2015
    11:49am
    Which lie are we talking about Rainey. This government has had so many that many people are not sure.
    Anonymous
    3rd Dec 2015
    4:00pm
    Rainey, I was going to comment, but you have said it all above.
    Peterrj
    4th Dec 2015
    11:11pm
    Ditto to all of the above!
    PlanB
    3rd Dec 2015
    10:01am
    I should think NOT -- there would be hell to pay if he had made it any different !!!!!!!!!
    Do I trust Morrison NO I do NOT, he has to prove himself, as does Turnbull and Turnbull has to give up on the policies of Abbott for a start!

    Dead right Rainey, I wouldn't trust any of the ones in power now Lab or Lib
    MICK
    3rd Dec 2015
    11:50am
    The real danger in voting this bunch of big business owned misfits back in is that they will do this dirty deed at the start of their new term, if they have the upper house. Voters and do-gooders take note!
    bartpcb
    3rd Dec 2015
    10:14am
    The family home should not be included in the means test, everyone except the envious know this. When those people (mostly younger ones) have busted their arses and gone without all their lives, in order to make a 'home' they will also resent any government that chooses to regard their 'home' as temporary rental accommodation. Any government that decides to treat pensioners this way will likely turn the whole body of Retirees to vote against them. As for government 'promises', nobody over the age of three falls for that one!!
    PlanB
    3rd Dec 2015
    10:17am
    Darn right there Bart.

    A person work long and hard to own their family home and does without a hell of a lot as well
    Anonymous
    3rd Dec 2015
    10:45am
    But why should a couple with a $1 million home and $400,000 in the bank get a generous pension while a poorer couple with a $400,000 home and $850,000 in the bank cannot?

    It's not a simple issue at all. I totally oppose forcing retirees out of their home, but the assets test is grossly unfair - and was made very much more unfair by the recent changes. It rewards spendthrifts, those who gift large amounts before age 60, and those who over-invest in the family home, while harshly punishing the frugal and honest who try to save for retirement, then find that investment returns have crashed and a changed means test leaves them with an income of half what pensioners get.

    The Government should stop fiddling around the edges and overhaul the system completely to eliminate the assets test and test only income, while assigning a deeming rate to total assets above a given generous limit. A low interest loan scheme could be used to assist those few who have very valuable homes that they wish to continue to live in for their remaining years, with the capital and interest to be paid out of their estate.
    MICK
    3rd Dec 2015
    11:52am
    Some very big assumptions there Rainey. There are 2 tests. I am assuming that deeming rules apply as well.
    Fliss
    3rd Dec 2015
    12:46pm
    Great points made Rainey! Your first statement sums it up simply & well why the current system is unfair.
    I hadn't really thought it all through - I simply disagreed with ever including the home in the assets test, but you are right. Eliminate assets test & test only income makes so much sense, especially now when returns are so low.
    Anonymous
    3rd Dec 2015
    1:14pm
    No assumptions, Mick. Just facts and suggestions for reform. There are currently two tests, but the assets test is grossly unfair and discriminatory.

    What I'm suggesting is that it be abolished in favour of an income test only, but to ensure people don't lock assets up in non-returning investments, a deeming rate be applied over a given threshold. The threshold should not differentiate between the family home and furnishings, collectibles, etc., thus giving people freedom of choice as to how they spend on personal and household items - but should apply reasonable limits to the total unassessed assets one can hold. Above that limit, apply a realistic deeming rate so that there's no benefit in accruing non-returning assets, then means-test total income (including the deemed income). To the extent that someone wants to retain certain types of valuable non-returning assets over the threshold (the family home, for example), offer a loan repayable from the estate to make up any loss of pension benefits, so everyone has fair choices and adequate living income, nobody is punished for saving or being honest, and the incentive to over-invest in the family home to increase pension benefits is removed.

    Seems to me to be a common-sense solution that really is fair, unlike the recent changes that were seriously UNFAIR. And it could probably be structured to reduce pension costs without causing any hardship.
    MICK
    3rd Dec 2015
    8:32pm
    You can bet your house Rainey that wealthy people will find a way around almost any system. Of course having only an income test might work as long as a suitable deeming rule were brought in with no outs for creative accountants to manipulate the system for their wealthy clients.
    There is always a way but sadly the rich normally have their outs. ANybody familiar with contracts and bylaws would understand that this is normal legal procedure. It shouldn't be.
    Steff
    3rd Dec 2015
    10:52am
    Morrison was responsible for the last taper rate changes and leaned on De Natale to make sure it got throug the senate
    Wouldnt trust him as far as i could kick him
    MICK
    3rd Dec 2015
    11:52am
    Morrison does come across as a head kicker and reminds me more of a used car salesman than a politician.
    PlanB
    4th Dec 2015
    7:51am
    I agree about Morrison do not like him one bit
    Lacemaker
    3rd Dec 2015
    10:59am
    Morrison - 'Methinks he doth protest too much ........ '
    Trevine
    3rd Dec 2015
    11:03am
    Cannot trust bloody Morrison and Turnbull
    MICK
    3rd Dec 2015
    11:53am
    Cannot trust the Liberal Party. Owned by big business and doing the bidding of the rich.
    PlanB
    4th Dec 2015
    7:53am
    I agree can not trust Morrison / Turnbull/ Bishop / Pyne / and quite a few others.
    casper dude
    3rd Dec 2015
    11:17am
    Who do you trust then Trevine. Tell us. I certainly trust them more than Abbott and Hockey.
    MICK
    3rd Dec 2015
    11:55am
    INDEPENDENTS because they for the most part do not have a political master. This is why so few are elected. Those who are mostly are free agents and will make a conscience call, something you will rarely get from either side of politics as they are out if they rock the boat.
    Rosscoe
    3rd Dec 2015
    12:25pm
    Certainly don't trust the Greens as proven by the deal with Turnbull today. The only Independent I trust (on most occasions) is Nick X from SA.
    Sundays
    3rd Dec 2015
    2:18pm
    Clive Palmer is an independent. Can he be trusted?
    MICK
    3rd Dec 2015
    8:52pm
    Palmer has a MINOR PARTY. He is not an Independent.
    Sundays
    3rd Dec 2015
    9:00pm
    Of course he has. I forgot because he's such a one man band!
    PlanB
    4th Dec 2015
    7:54am
    I also would vote Independent as well after I asked their policies
    Phil1943
    3rd Dec 2015
    11:22am
    How generous of the man. Just imagine leaving things as they are instead of messing up people's lives with money-grasping changes whenever Treasury runs out of money.
    Of course it's good news for pensioners, but it shouldn't have to be 'news' at all. Homes are the investments we have that don't go broke. The savings banks that still pay reasonable interest. The piggy banks we can access for the inevitable 'rainy day' in our futures. And no government would dare make them part of the assets test when considering pension eligibility, or create a big new tax on all property without excluding seniors...would it?
    Stay watchful and protest unfairness as often and loud as you can. From what's happening now I expect the attacks on seniors and their assets will not only continue but intensify. The next 'news' from Morrison may not be so good for us.
    MICK
    3rd Dec 2015
    11:57am
    Agree. The hide of this misfit to make out that he is doing us a favour. The electorate does Morrison a favour by electing him to prey on us all.
    Kato
    3rd Dec 2015
    5:28pm
    Do you think they will try and flatter the elderly in the short term.
    Smoking Joe's seat looks like it will be lost. To the liberals. Look out for softening on there stance against pensioner's. But just until they see which way the electoral wind blows.
    phantom
    3rd Dec 2015
    11:32am
    It's amazing that us "baby boomers" saved, missed out, had multiple jobs to get ahead and a house so these spoilt brats now a days can have everything handed to them. Two story houses, flat screens and new bloody furniture. When did we get all of that, no, we settled for second hand stuff and saved for it. Now the Government can't afford to pay for them so now they want us pay. If I save, go without, and get a flash car are they going to make me count that as well.
    Anonymous
    3rd Dec 2015
    1:20pm
    Yes phantom, I agree. I am sick of hearing how hard it is for the young to get a home. What would we have given for the interest rates they pay? And if they didn't demand new, 4 bed/2bath/double garage/professionally landscaped with a pool, plus restaurant dinners weekly and overseas holidays each year, there would be plenty to pay off the mortgage comfortably. We paid a lot more (as a portion of wages) for linen, furniture, electrical appliances, cars, and clothing, as well as paying hideous interest rates. And now the government wants to take everything we've worked for away and call us ''leaners'' because we expect to receive the modest retirement pension that we were promised from the day we began work, and that we funded (without complaint) for our parents and grandparents.
    Peterrj
    5th Dec 2015
    12:09am
    Rainey, I tend to agree with most of what you have said. I left school with just $25 in the bank. Everything I bought for many years was second hand, TV, lounge, washing machine, fridge. When married our first curtains were purple hessian ... Purple was flash in those days!!! Had two children and the baby furniture was bought from StVinnies and the Salvos. My father worked and the accepted position was that when he retired he would have paid off his humble house and my parents would then received the Aged Pension ... didn't everyone get the Aged Pespnsion when you retire???

    I don't think that we were' actually promised the Aged Pension upon retirement but it was simply an assumed step in life!!!

    Now, having worked all my life as so many others, I find myself like an Enemy of the State .... I have a house and cash in Super and therefore I am 'rich' for so working and the Govt now wants to take some of it from me as I am a new source of tax revenue for Govt coffers. They want to deny me growing old as a pensioner with some modest financial breaks that pensioners get. I now represent the new underclass to be despised and hated as I have a five bedroom house that I have lived in for the last 40 years. They will soon toss me into a horse drawn cart and I will be paraded through the streets to the place of execution to the chopping block. My crime: I worked, paid taxes, saved money, bought clean skin wine and drank at home to save money. I got ahead, and that is My crime.

    I don't speak only of myself but I feel the financial pain of many disillusioned contributors to YLC. We thought that we were doing the right thing and saved for our retirement only to slowly realise that we are to become the new source of untouched taxation revenue for a cash strapped Government.

    The big battle for retirees is still ahead. And it's a battle that we can't win! We will be skinned like a rabbit and plucked like a chook!

    Just watch: Super will be taxed more than it is currently taxed, lump sum withdrawals from Super will be stopped or taxed, income from Super will be taxed and our homes will be included in the asset test. And fewer and fewer will be eligible to collect the Aged Pension.

    A financial winter storm is brewing. Rug up, get warm, batten down the hatches and do your maths. But don't think that you will retain your assets as you get older as they are going to be donated to the Govt under the guise of a 'fairer system for everyone'!!!!
    SGW
    3rd Dec 2015
    11:42am
    Tell me, Do you Trust a politician
    Linda
    3rd Dec 2015
    3:54pm
    No
    PlanB
    4th Dec 2015
    7:55am
    NO
    MICK
    3rd Dec 2015
    11:47am
    So here we have the next bit of propaganda put out by this government.

    "The Productivity Commission claims........". So who made the appointments to this "commission" and who controls it? Correct! So this is more lies on top of the rest!

    Australians apparently have $1 trillion in housing value and it is claimed that "this is an untapped source of retirement income." So is the $75 billion a year in tax which multinationals are avoiding.

    I am tiring of this governments corrupt behaviour. It needs to go asap!
    Emps
    3rd Dec 2015
    12:11pm
    It is difficult to believe people here posting negative comments about Morrison stating homes will not be asset tested.

    Any other good news to protest against,lol.

    Oh! btw any tax initiatives that collectively impose on freedom of individuals are strictly in the realm of socialist/labour enforcers.
    Travellersjoy
    3rd Dec 2015
    12:28pm
    And did you notice there was not a single reference to the multiple houses and properties owned by those self same "Honourable" members of our Parliaments - thanks to the laws they made so tax payers would subsidise their acquisitions.

    Hypocrisy run rampant.

    There is an illuminating article by Richard Denniss, "Spreadsheets of Power", in the April edition of The Monthly, that spells out how government uses economic modelling to lie and bamboozle us into agreeing to the most outrageous proposals - the ones that have turned our economy into a basket case and allowed the 1% to rake in the moullah. Anyone interested in being well governed should read it.
    Chris B T
    3rd Dec 2015
    1:05pm
    Politicans rules governing there entiltements/pensions are non means tested.
    So it would make no difference to them about assets, No. of Homes etc.
    Ability to access pension at an earlier age, still draw income from another Government Dept, as well as any Directorship/whatever job.
    HYPOCRISY DOSEN'T COME CLOSE TO IT.
    MICK
    3rd Dec 2015
    11:48am
    Leon: you stated that including the family home in the assets test would save about "$6 million a year". I think you meant $6 billion!
    Cheers.
    leonYLC
    3rd Dec 2015
    5:52pm
    Spot on Mick! Thanks for pointing that out.
    Annie
    3rd Dec 2015
    12:03pm
    Agreed Rainey. People who have downsized through choice or necessity should not be penalized by then having money as an asset rather than a home as an asset. In fact the family home due to size can become a burden for the aged and urban planning. The level of the asset test needs to be considerably raised to accommodate this type of discrimination. Whether you have the money or the house your net worth is the same and therefore both should be treated equally and both be entitled to the same pension and health care benefits. It is hardly fair to say that one is rich if they have the money in an investment account and therefore no pension and told to spend it to survive and pay their way in our society, while the other members of our society have exactly the same financial means but tied up in the family home and therefore are able to collect pension and keep it to hand onto the next generation etc. The tax system needs to also consider that we have paid taxes on our earnings, often not being able to salary sacrifice like you can in recent times, and then paid taxes on the income that we have in superannuation when transferred to a pension scheme, and therefore a tax on those pensions would be a third level from my understanding. Equality to all those of pension age should be the focus and not discriminate in the way that individuals have the freedom to invest their monies including the family home which has most likely increased in value considerably and taxes have not been paid on this increase unlike monies in investments. An over haul of the tax system is what is needed with a focus on equity with consideration being given to those that have made the effort to provide for themselves in some way in older age so that monies can be given to those far less fortunate e.g. those with severe disability or illness that have been unable to work.
    Fliss
    3rd Dec 2015
    12:55pm
    Totally agree Annie. Either count all assets including family home, or as Rainey suggested - no assets test, just income test.
    Wrong that someone in a million dollar house with $250,000 in cash gets no pension, while someone with $500,000 home & $750,000 gets pension.
    Bonny
    3rd Dec 2015
    3:06pm
    Including the house in the assets test would allow people to downsize without penalty as their asset value would not change.
    Disco Diver
    3rd Dec 2015
    12:06pm
    Not all aged pensioners have million dollar homes, just a low percentage.
    How would the government do an asset test on the house, not all houses in areas are the same?
    If a normal aged pension couple have $25,000 in the bank and a $400,000 house and draw an aged pension do they lose the pension?
    Emps
    3rd Dec 2015
    12:13pm
    NO
    Fliss
    3rd Dec 2015
    12:56pm
    Nope
    Kato
    3rd Dec 2015
    9:51pm
    Does a pensioner couple who have sold there modest family home. Purchased a retirement unit and ends up with a hundred and twenty thousand in the bank get penalised. It seems so because We have just had our pension reduced as the government seems to think we earn five percent interest on it.
    So we earn some income.gotta make ya smile or you would go mad. Oh and by the way the unit cost under two hundred thousand.
    Peterrj
    5th Dec 2015
    1:41am
    Kato, You say that you sold your house and bought into a retirement village and now have an extra $120,000 cash after selling your house. But you have now,lost some of your Pesnion because of the extra $120,000. BUT I'm lost how 5% interest gets into this equation??? You can have $291,000 In assets before you lose some Pension. If you now have over $291,000 in cash then your Pesnion would be reduced. But you say that thenGovt seems to think that you earn 5% on this $120,000???

    5% is not the deeming rate??

    Can you double check with Centelink why your pension was reduced and report back to this posting?? Was it because your assets were too high or that your income was too much when you sold your house??? I'm sure many would want to know exactly why your pension was reduced???
    Golden
    3rd Dec 2015
    12:17pm
    If the rules get changed in the future and the family home is included in the assets test, products like reverse mortgages will have to be vastly improved. The rate at which your asset disappears with their high interest rates would leave someone with a modest valued home with no asset and years to live in poverty if they defy the government and dare to live a long life. I am one of the baby boomers who worked hard and raised kids and put any extra cash into paying off the mortgage. My super is the super guarantee from the early 90's with a bit of top up in the last few years of working. I want to keep my equity in my home as this is my passport into decent aged care when the time comes as I don't want or expect my kids to look after me.
    Travellersjoy
    3rd Dec 2015
    12:18pm
    I think it should be my choice to decide what is important for my quality of life. I suspect there are some banksters who have Turnbull's ear who want us to spend our money where they can profit i.e. buying and selling our homes, building 'suitable' homes for seniors, selling us expensive holidays, etc.

    The fact is most older people grew up when frugality was valued, and we still practice it. Because I own my home I can grow food, exercise in the garden instead of a gym, prioritise expenditure, have control over housing costs except for rates, stay connected to my neighbours, friends, GP, and community groups, etc. What a pity I don't manufacture more profit for the banksters.

    I am tired of "them" over there deciding what is in MY best interests. They could not go more than a few metres in my shoes, let alone a mile. Let them increase the age pension to a decent standard of living, you know, something like the $50,000 those lucky enough to have lots of super expect as a minimum, then they can talk to me about my lifestyle choices.

    Do I trust them to keep their word? Nope, nope, nope. Trusting this government would make me a dope, dope, dope. I have been around way too long to be taken in by their manipulation/spin.
    Fliss
    3rd Dec 2015
    1:10pm
    Agree with much of what you say - except "something like the $50,000 those lucky enough to have lots of super expect as a minimum". Majority of those with lots of super are not 'lucky' - they worked & went without in order to accumulate funds in super. And to receive $50000 pa in today's market they would need around 1.7 million.
    Anonymous
    3rd Dec 2015
    1:33pm
    You are right, Fliss. The current assets test is patently unfair. It leaves those with modest homes and enough savings to generate maybe $25,000 a year with NO pension, forced to drain their savings, while those with multi-million dollar homes collect a full pension and leave the house to their kids.

    I don't support forcing people out of their homes, but there needs to be fairness in the system - and incentive. As it stands, a couple with a modest home and $850,000 in the bank is way better off selling their house and buying one worth $1 million. Anyone under 60 has a powerful incentive to gift to their kids (with an unwritten agreement that the kids pay a lot of their bills going forward). Those with savings have a powerful incentive to squander them on expensive travel etc. because otherwise only the taxpayer benefits from their savings. They lose all benefit from their endeavour. That is UNFAIR.

    FYI, Travellersjoy: Many you call ''lucky'' are getting far less income than any pensioner and ZERO benefits. They are being told to spend their savings, but really, is that fair? Consider this comparison:

    Couples X,Y and Z could all start retirement with a $400,000 house and $850,000.
    X spends $300,000 on world travel and gives $200,000 to his kids before he turns 60, and gets a full pension.
    Y keeps all of his $850,000 in the bank to sure up his old age, and is denied a pension.
    And Z sells his house and buys one worth $1 million and gets a full pension.
    HOW THE HELL IS THAT FAIR OR ''ECONOMICALLY SUSTAINABLE''?
    Sundays
    3rd Dec 2015
    3:02pm
    Rainey, I don't agree with the changes and can't believe they had Greens support. However, X is the 5 minute millionaire and Z is the starving millionaire. Both don't have a comfortable old age if only reliant on the full age pension The smart one is still Y. He can reduce his $850k to just below the income threshold and still has a substantial sum to shore up his old age.
    Bonny
    3rd Dec 2015
    3:08pm
    I agree Rainey that is why the house is the most unfair part of the age pension.
    Peterrj
    5th Dec 2015
    12:57am
    There is a lot to ne considered in this particular post:

    Fliss I don't necessarily agree with your maths but if true and it takes $1.7m to generate an income of $50,000 that means that you would need a Super balance of about $1,260,00 to draw a pension of $35,000 .... Which is the same as drawing the Aged Pension for a couple. So being paid the full Aged Pension for a couple is like getting a free Super balance from the Govt of $1,269,000!!! This is free Govt money, why would you even try and save in Super as you can't beat the Aged Pension on these figures!!!!

    Rainey, you claim that those with investments only pull in $25,000 per year and such investments deny them any Pension Money. So no assets allow the Full Aged Pension payment of $35,000 for a couple. The Aged Pension for doing nothing except getting old sounds an unbeatable deal!

    Further, you don't have to dispose of assets prior to reaching 60, you can do that at any time but the gift will still be deemed to be in your possession for the next 5 years.

    And selling your house and buying one worth $1m??? The Sydney market is crazy and grossly over valued. Many Sydney homes are valued at well over the $1m mark. I saw today that units at Asquith on the highway are on sale for $1m! If you bought a Sydney house for $1m you could easily be downsizing!!!! The elephant in the room for retirees is the value of the family home and will it be or not be included in the eligibility criteria to get the Aged Pension. Don't forget, you can't eat a house!
    don
    3rd Dec 2015
    12:20pm
    In West. Oz , older people have fibro homes , that they bought forty years ago in working class suburbs. Now those suburbs are the THE upmarket places , so their homes are worth a million dollars, eg big blocks. We had a labor gvt. who wanted to up the taxes because of the value of the land. There was a major out cry as , the people would have had to sell their houses, so it was dropped. If they sold their houses for this bull dust where would they go ? , there are housing shortages.We need new political parties who represent their constituents and not themselves. If they down size they are still vulnerable.What are you supposed to do. ? One minute they want you to be self sufficient to save money, then they want your money and asset's.!!
    Radish
    3rd Dec 2015
    3:09pm
    How do people on pensions afford to pay rates in these old affluent suburbs?
    Pamiea
    3rd Dec 2015
    1:20pm
    I think its ridiculous to make people eat into the equity in their homes. People have worked hard to get a home. But if the Libs decide to do this down the track I wondet if they would be happy to eat into their own wealth upon retirement and not claim from the public purse.
    Anonymous
    3rd Dec 2015
    1:36pm
    Don't ever expect pollies to give up their rorts, Pamiea. Won't happen. Yes, it's ridiculous to make people eat into the equity in their homes, but equally it's ridiculous and blatantly unfair to deny the owner of a modest home, drawing only $25,000 or less in income, any pension or benefit just because they settled for a modest home and saved. It's not a simple question, but unfortunately neither politicians nor their advisers are capable of dealing with complex issues. They focus entirely on winning votes and directing money to themselves and their buddies.
    Patriot
    3rd Dec 2015
    1:55pm
    Is this promise an "Iron Cast guarantee" for the LNP or is this until we "Re-Elect" them (heaven forbid) at the next election and this promise then becomes "Just One more" broken undertaking?

    3rd Dec 2015
    2:21pm
    ALL RETIREES SHOULD READ THIS:

    I just called Robert Di Natale's office about the proposal to make big companies disclose their earnings and the claim that the Greens have rolled over and supported secrecy. His assistant claims that they have actually INCREASED disclosure requirements, despite being unable, due to Labor's stance, to go as far as they wanted to go. They say Newscorp and several big mining companies now have to disclose. Some 300 more companies have to disclose than before. They are also working to address tax evasion and tax rorts by the wealthy, including superannuation concessions. (Maybe! Forgive me if I'm sceptical!)

    What was of great interest to me, though, is that during the next 12 months there will be a comprehensive review of retirement income which the Greens actually hope will reverse the negative impact of the recent asset test changes and implement genuine fairness across the board.

    Now, I don't have much faith in any political party, and certainly not the Greens. But given that a retirement income review is to take place, we retirees have a golden opportunity to lobby ALL politicians and their advisers, together with lobby groups. Our letters telling them what is wrong with the system now and how it hurts us and those close to us, and making constructive suggestions for change, just MIGHT help drive some sensible and fair reform.

    What we need to do now is to join forces and take action. Stop whining. Resist the urge to be green-eyed or selfish. Look objectively at the landscape and consider what is fair and equitable and good for the nation. Aged pensions ARE an entitlement, and we CAN, as a nation, afford to support our retirees at a reasonable level of comfort. We should not be forcing older people out of homes they have lived in and loved for decades or out of the communities in which their friends reside and the services they use are accessible. We SHOULD, however, be respectful of those who went without a lot or worked very hard to save with specific objectives in mind - and acknowledge their right to benefit from their endeavors. We also SHOULD be ensuring there are strong incentives in the system for people to work, save, invest, and be honest. Currently, the pension system encourages precisely the reverse!

    Your letter might not be responded to or acted on. But then again, it might. The only certainty is that if you don't speak out, nobody will hear you. Reforms happen when governments are clearly told that the public demands them.
    Patriot
    3rd Dec 2015
    2:28pm
    I'm in!
    I - for one - am happy to be part of the development of a strategy to achieve such!
    Bonny
    3rd Dec 2015
    3:11pm
    The asset changes due to come in in 2017 are very positive and they should be cut further.
    Linda
    3rd Dec 2015
    3:13pm
    Well said Rainey.
    Facts are, for many, they purchased their homes when the values were a small fraction of current worth. Did these people do anything personally as a group to cause the values to increase? Probably, mostly they did not.

    The home is more than an asset for some, it is the safe haven, the known quantity, the comfortable, safe, least expensive and least likely to hold unknown and possibly expensive problems.
    I like your advise and will be taking it.

    Thank you.
    Adrianus
    3rd Dec 2015
    10:56pm
    It doesn't surprise me that Labor wouldn't support the government in cracking down on the tax avoidance of the multinationals, after all it was Keating who created the cloak of secrecy for Labor mates in big business. The government was forced to do an eleventh hour deal with the Greens, who are gradually regaining some credibility as a second option.
    Peterrj
    6th Dec 2015
    7:58am
    Rainey, 'We also SHOULD be ensuring there are strong incentives in the system for people to work, save, invest, and be honest. Currently, the pension system encourages precisely the reverse!'

    I totally agree with this observation!!!!

    But how does one achieve this goal is the problem. As I read YLC comments I don't see any unifying comments except that all Politicians are ripping of the system, the rich should be taxed, those with Super have rorted the tax system and they don't deserve their savings and that the Aged Pension payments should be increased!

    These types of arguments will not preserve or protect what retirees currently have. Green eyed and selfish attitudes will guarantee disunity and retirees are then ripe for polly plucking through ever changing Pension and Superannuation rules which will be detrimental to ALL retirees!!!!
    Linda
    3rd Dec 2015
    2:59pm
    "Around three in every four Age Pensioners own their home. In fact, older Australians hold around $926 billion worth of home equity. According to the report, this is an untapped source of retirement income."

    May I add it is also an untapped source of money for rip off artists who wish to prey on old and vulnerable people. Nursing homes, Home Care Services,Retirement villages, Banks, Insurance advisers, Financial advisers. Even the builders can get in on it with building rabbit hutch accommodation for the oldies. That really would get the economy pumping.

    I do think these articles are put out with an agenda of some kind behind them. Who stands to gain? Because of lies, outright every day lies, plus now the soft sell of ideas via articles such as this one leave me feeling that there is a manipulation game in action. And now, what was initially seen as tax payer funded old age pension is now WELFARE. Talk about spin!

    I agree that if this government gets in at the next election we retired folks are sure to face some new arrangements not to our liking. What about all the money they have squandered since being in government?

    If we managed to elect an overwhelming number of independents, then the meaning of party politics will change. The spin wants to see Australians divided. Will it work? Will you or I let it work? Let us try to not fight over the crumbs.

    To achieve this, all the government has to do is keep it up. Lets talk changes to pension arrangements, changes to health care arrangements, impoverishing low wage families, failing to lead in terms of a set of new industries that raise revenue, protecting mining and subsidising that with our money, demonising unions, removing weekend penalty rates, favoring banks and the big end of town and wealthy people, and mistreating people with disabilities, the old, the sick the infirm and ....single mothers. Allowing farmers to go under during drought, likely caused by gobal warming, caused by emissions from fossil fuels, pretending climate change does not exist. Removing a reasonable carbon price to replace it with a huge GST increase and applying it to everything. All this while ensuring their own benefits, salaries, expense accounts and entitlements on steroids.

    Our good future belongs to changing to renewable energy and the industry that can do that, a sound, vibrant education system, a good spread of wealth for all Austrlians instead of a few. Also, being able to see inventions of worth and find ways to foster development here.

    Australia will speak at the voting booth just you wait and see.

    Basically all of their ideas express the ineptitude displayed everyday in terms of a future for this country. They expect we will believe them.

    Well, I don't, and I can't feel like I trust what they will be doing in future.
    Bonny
    3rd Dec 2015
    2:59pm
    The house should be included in the assets test. This is the most unfair aspect of the age pension. Someone can have a $2 million dollar house and get the full pension while someone with $500,000 house and $1.5million in other assets get nothing. No wonder people size up not down. This is utterly stupid.
    Linda
    3rd Dec 2015
    3:38pm
    I wonder how a person can look after a 2 million dollar house on the old aged pension. It may be that rates would take half of it and then of course things break and must be fixed, and then there is food, the car maintenance and rego. chemist expenses, health care costs, electricity and so on. If they have no bills to pay then obviously they are cheating.

    Certainly anyone who has to take a dramatic cut in the existing arrangements will likely suffer.

    At our place, it was time to think about retirement, we went to a financial adviser, who told us what to do to maximise our situation. It was sound financial advice.

    We and thousands of people never schemed and arranged things to rip off the government. We took the advice of the experts. The advice was given based on our circumstances at the time. Expecting the oldies to suddenly cope with a massive cut in their incomes seems a terrible idea. Or, to threaten to take away their home which has provided stability and comfort and safety for them. Why is there not any dollar value on stability, safety, comfort? Where is that kind of housing that would cost less and suit older people?

    Especially troubling, when revenue raising is not even seen as a goal. Just because they say it is so, don't mean it is true. We already know about the ideology and the lies.

    If these folks that are so well paid put the same amount of energy into building up a future for Australia then we can talk about these reforms.
    Sundays
    3rd Dec 2015
    3:57pm
    I can't agree with you Bonny and I doubt that there are many living in $2m homes on the full aged pension in any case. The fact that the changes to the asset test have brought up anomalies is no reason to include the family home in any tests. It is the one thing (regardless of its worth) that people worked hard to pay off, so that they would have a stress free retirement knowing where they would live. Im on a part pension and think we are entitled. I missed out on baby bonus, child care rebate, maternity leave, big family allowance payments, school kids bonus, first home owner grants, reduced stamp duties etc. Should I also have to sell my home to fully fund my retirement? Dont believe the rhetoric that we can't afford the age pension when you see what the politicians spend the taxes on!
    Bonny
    3rd Dec 2015
    7:24pm
    It's easy for one person I know to look after their $2 million dollar house. Their kids pay all the expenses because it will be theirs one day. Meanwhile they collect the pension for their spending money for holidays, eating out etc. They have quite a few friends that do the same thing.
    PlanB
    4th Dec 2015
    8:12am
    Bonny when you have owned your home for 40 years plus and in a good area you may have paid X amount for it BUT in that time it has gone up --as it should -- you should not have to change homes because of that and you do not feel like upping stakes at an older age -- LEAVE the family home alone!!!!!!!!!!!!!!!!!!!!!!!!
    Bonny
    5th Dec 2015
    4:45pm
    Yes you can stay in your home and get the pension but it has to be paid back after you die.
    PlanB
    6th Dec 2015
    9:23am
    Like bloody hell it should Bonny --you must be a NON home owner?

    My Son and step Daughter are paying off their own homes and could not afford to pay my expenses, I also would not expect them to.

    Who said it has to be paid back when you die?
    cdbstock
    3rd Dec 2015
    3:22pm
    Good point Rainey - another option:
    Home not included as an asset if land valuation (determined every year) is less than or equal to the land valuation median in the relevant local gov't area . For homes on land that exceeds the median value - if the home owner (remembering that the owner must reside in a home on that land) wishes to claim the value of the home (incl the land) is less than twice the land valuation & therefore is deemed to have a nil asset - he/she must submit a valuation determined by a reg'd valuer - at his/her cost - otherwise the home valuation will be deemed to be four times the land valuation
    Linda
    3rd Dec 2015
    3:52pm
    I can almost see the kinds of unfairness folks are experiencing, via these discussions, however all I really have to go on is our own experience. I have no idea how things stand for other people. I only know costs are up, they are up across many things and taking funds away from retired people seems very scary. My question is, can I pay our bills?

    This thing about a valuer leaves me feeling a little spooky, as you know, our rates are set by valuation by the local council.
    There would and could be room to cheat there, both ways.

    I know it is a cynical comment but of late it does seem there are a lot of folks out there looking for ways to gain and others willing to look at things a certain way, etc.

    We were the unknowing victims of a home care package service provider that was misleading us and in a manner cheating us. This experience has left me very frightened about what is happening here in Australia.

    We already know about the banksters and what they have done.
    Why not really clean that kind of thing up? Then we talk.
    Circum
    3rd Dec 2015
    4:46pm
    A simpler option is to include the annual council rate as the asset value.The assets means test would need to be increased to compensate.The asset value could be set at the average council rate plus 50% to allow for anomalies.As an example a person whose assets go up by $600000 (council value of property)would be allowed to have total assets of$900000 more before their pension is affected.
    Unfortunately we know that in time politicians will want to reduce the 50% and not index the $900000.
    Not Senile Yet!
    3rd Dec 2015
    9:09pm
    The pension was funded and provided for ever since it was legislated in Parliament prior to the second World War!!!
    It is has only been labelled as Welfare in the Last ten years because the Government decided to combine everything into one Dept.... Not because tit ever was or is Welfare!!!!
    Welfare came under the umbrella of Benefits paid for Unemployment, Disability and Single Mothers (To support the Children).
    The current label that a Pension is Welfare is a Lie!!!!
    It is not...never was....was never intended to be seen as same!!!!
    It was a reward for Citizens who obeyed the Law and contributed to our Societies Infrastructure through paying their taxes for 40-45years.
    The Twiddling of Past Governments to save money caused the introduction of the Asset tests......they were never there originally!
    You might ask why???
    Because when the Original Legislation was passed...they also agreed that it would be too discriminating to not pay a Pension to someone who was financially successful when by being so they would have paid more tax and probably provide others with employment!!!
    So it was intended to be for ALL retirees....not just the Poor!!!
    The modern Era has seen the Parties and their Puppet Ministers pass Discriminatory Legislation in the form of Asset Tests to SAVE Money.....because they keep Blowing the Budget.....not for any other reason!!!!
    Why should the Tax Payer be penalised because they can't Manage the Budget?????
    The Asset Test is a Blatant Form of Discrimination...nothing More and Nothing Less....and a direct copy of American Policy!!!!
    As for not being able to afford to pay it????? What a load of Tommy Rot!!!!....
    Simply make all Corporate Companies pay 10% Tax for the issue of their ABN Numbers and affordability would like be an issue!!!!!
    Also they need to stop lying about the Pension being Welfare...it is NOT!!!
    Not Senile Yet!
    3rd Dec 2015
    9:14pm
    Sorry...should have read....
    And affordability would not be an issue!!!!
    So sick of the parties and their Propaganda Lies to benefit themselves and their selfish aims......vote the lot of them out.....stop voting for Party Puppets you lot!!!
    Start Voting More Independants into Parliament....at least that way Both Parties will have to negotiate everything with larger numbers who will oppose their American Copy Cat Policies!!!!
    Annie
    3rd Dec 2015
    9:49pm
    If as some people say the increase in value of the family home over a life time should not be considered an asset then should blue chip shares bought 40-50 years ago be treated in the same way, yet they have had to be declared over a life time. All assets should be considered as the gross value is the same whether it is cash, shares, family home, investment property etc. I agree with Rainey and Phantom. We did save, have small houses, second hand furniture and chose not to run up massive credit debt. People should be free to make choices on how they invest but there should be no discrimination over pensions, health care cards and services based on the type of investments one has chosen.
    Patriot
    4th Dec 2015
    7:21am
    Annie
    There is a difference between the family home and shares etc.
    One is "Non-Income" producing "Life-Line" and essential to live a reasonable quality life whilst the other investments are "income producing" and should be treated accordingly.
    Not withstanding the above, once a home "Stands Out a mile" in Opulence compared with others in the suburb it is located, consideration should - indeed - be given to include at least part (the value above the average pricing of the home compared with it's surroundings) to be considered as an asset.
    This is the part that should be included in the "Asset Test.

    4th Dec 2015
    8:01am
    I'm more worried about the countries situation and what we owe than a bunch of pensioners who for one can't obviously provide for themselves and have to rely on Government handouts to survive.
    if you have a million dollar plus house you clearly shouldn't need the pension so it needs to be included in the asset test and if you still want welfare you are just plain greedy and not a real Australian.
    As far as having an effect by voting for someone else you would have to be kidding most welfare recipients have low IQ s and bugger up the voting form anyway.
    The quicker we cut down all types of welfare the better this country will be.
    Patriot
    4th Dec 2015
    8:05am
    robbo
    What a Rude, Crude, Objectionable, Stupid, ShortSighted & Inconsiderable Bas**rd you are.
    PlanB
    4th Dec 2015
    8:20am
    Robbo spoken like a true Bastard
    Anonymous
    4th Dec 2015
    8:53am
    Patriot and PlanB when you line up for your welfare cheques you obviously don't care what position you put this country in.
    This is the trouble with freeloaders they are all have woe is me and give me more attitudes
    PlanB
    4th Dec 2015
    9:18am
    Robby I am not a free loader I worked long and hard and also looked after Family members in terminal sickness saving the Government a heap of money.

    Do not make such statements that "welfare people have low IQs" get down off you high horse and wake up to your self!
    RonC
    4th Dec 2015
    1:12pm
    Thank goodness sanity has prevailed.
    There are far too many envious ones who cant bear to see hard working people that have lived within their means and saved and purchased a nice place to live (and not get rental assistance and all the perks that some non home owners get).
    But that aside, it is commonsense not to include the family home, because there are many older people who bought a modest home many years ago in a then "outer' suburb and now that the cities have closed around them, they have a property worth $750,000+. That is their home and it is only worth money to them if they have to sell it and move away from their friends and the locality that they have shopped in for many years.
    There are also people who have a big house needed to raise their families. Why should they have to relocate (sell their home) and move to a smaller place away from the environment that has been most of their life.
    If the government stays true to their word and not include the family home, I am wondering when they will go down the estate duties path.
    If you work hard and save, the government and a lot of other people think that you should be penalised because of your success or your prudence.
    Rodent
    4th Dec 2015
    8:13pm
    This is my first post to this site. I have been reading all the "interchanges" of views on the subject of Age Pension, and related matters. As a person who has read all the 200+ pages of the recent productivity report I can say that while it attempts to put several positions, some of its not based on recent data. Specifically some of its data is 2010, and some through to not later than 2013.
    Its just not about saying that the Home should be included in the Assets Test, it has much more about other relevant info, Age Care options, The Pensioner Loans scheme , VS other Reverse type mortgages, including the Home Safe Equity Release option.
    The Doc has 20 pages of References, yes 20 whole pages, and a LOT of what is says is directly taken from the Documents/Reports by other people or organisations.
    One of those Reports is called The Age Old Problem of Old Age-fixing the pension by Simon Cowan and Matthew Taylor from the Centre for Independent Studies, just another group of wheelbarrow pushers, like other so called ill informed think tanks.

    Like Rainey, and several others I am particularly concerned about the lack of Fairness and Equity in the Pension Changes due in Jan 2017, especially for Specific Asset Values across ALL pensioner Types. For example at $550k asset value a Single Home Owner today receives an annual pension of $8970 an in Jan 2017 this will be ZERO pension.

    For the same $550k figure a Couple Non Home Owner today receives an Annual Pension of $29333, and in Jan 2017 will still receive the same amount!!

    The higher $ figures in Asset Values provide much more Pension to Couples as NON HOME OWNERS compared to any home owner. One might even conclude this is deliberate as the Lower Threshold was raised from$433k to $575k in the case of Couple Non Homeowners.

    I am really concerned that many existing Pensioners may not realise how these changes will affect them until it actually happens
    Peterrj
    6th Dec 2015
    9:37pm
    Rodent, looks like you have ratted through a whole lot of reading and came up with a horrible conclusion: 'That many existing Pensioners may not realise how these changes will affect them till it happens.'

    I could not agree more with you. There is going to be a 'hue and cry' like no other come the New Year.

    Many will correctly curse the Libs .... But I can't see Labor being the saviours of those Retirees with some modest assets!!

    The proverbial is about to hit the fan big time!!!!

    I predict that Eventually the family home will be factored into the assets formula and income from Super will also be taxed,

    After all that reading can you share your views of future changes???
    Katie
    5th Dec 2015
    11:37am
    A family home has already been paid 10 times over - they paid 30-48% tax on the money that got the home, They paid 5-17% interest to the bank over a 30-50 year depending on how many times they moved in their life cycle; plus stamp duty for every move. A house is just a representation of a lifetime of saving, taxes and bank interest fees. Then when a person is most vulnerable; elderly, needing their community they have lived in, the Govt wants to oust them and punish them for their efforts. Nothing short of disgusting! lLeave the family home alone.
    Patriot
    5th Dec 2015
    11:55am
    Katie
    Point(s) well made!
    PlanB
    6th Dec 2015
    7:19am
    Good post Katie and so true
    PlanB
    7th Dec 2015
    7:03am
    I went on line to see what changes take place in 2017 compared with 2015 and this is what I found please info me if I am wrong



    http://customisedfinancialplanning.com.au/2015/07/29/centrelink-age-pension-changes-to-commence-1-1-2017/


    https://thesmartmoney.com.au/changes-to-pension-assets-test/


    https://thesmartmoney.com.au/how-much-can-a-pensioner-have-in-assets/
    Rodent
    7th Dec 2015
    8:39am
    These comments are primarily for Plan B and Peterrj

    Plan B you have only some of the information, there is a lot more available in the Form of Govt Docs, , Senate Committe minutes/submissions, all sorts of Graphs, Tables, it just depends on what you want, perhaps send me a private message? PS the Pension changes take effect JAN 2017 not 2016

    Plan B you ask my views where all this may go, short answer I dont know, but like some others views one day the Family Home may get included in the Asset Test- somehow-

    For anybody interested there is an first class piece of Software made by Plansoft -it has an Age Pension Calc as PART of its software, also has tax ,and a whole heap of other features. I use a Production version, but you can use it for a FREE trial and plug your OWN numbers in to see the Pension Result as at NOW or for 2016 - 2019
    PlanB
    7th Dec 2015
    9:21am
    Thank you Rodent -- I can not seem to PM you as seems it will only work IF the name is in blue ? Maybe you can PM me and I can answer you ?


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