Asset thresholds to be lowered

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According to several news reports, senior government sources have confirmed that next week’s budget will see changes to the pension assets test. These changes could see an estimated 200,000 part-pensioners’ entitlements trimmed under new figures. Several news sources are reporting this morning that the expected changes relate specifically to homeowners, who will see a lowering of the $1.15 million threshold, for assets excluding the family home, down to $820,000 for couples, and the $775,000 threshold reduced to around $550,000 for singles.

The assets test changes are expected to save the budget up to $2 billion, and, as a result, it is possible that the government may scrap the proposed changes to indexation of the pension put forward in the last budget. It has also been reported that the government is expected to adjust the tapering rate to protect pensioners with fewer financial assets.

Read more from www.theaustralian.com.au

Read more from www.dailytelegraph.com.au

Read more from www.9news.com.au

Read more from www.heraldsun.com.au

Opinion: Small steps to victory

It seems that the Federal Government has learned a lot in the past six months in power. A month after last year’s horror budget, the Abbott Government was hanging by a thread due to four controversial policies. Three of these policies have been thrown in the bin over the past six months, with just the changes to pension indexation remaining – but even that is expected to be cut this week.

The move to implement a small change to the assets test targeting the wealthiest of those on the part Age Pension who own a home and have assets of over $820,000 for a couple or $550,000 is hard for anyone to argue against. This may be the government’s first tightening of pension payments, but you can be assured that it won’t be the last. 

What do you think? Has the government gone about the changes to the assets test in the right way? Are you concerned that the rules may be tightened more significantly in the future? Do you have more faith in the Abbott government than you did 12 months ago? 

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Written by Drew

Starting out as a week of work experience in 2005 while studying his Bachelor of Business at Swinburne University, Drew has never left his post and has been with the company ever since, working on the websites digital needs. Drew has a passion for all things technology which is only rivalled for his love of all things sport (watching, not playing).
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201 Comments

Total Comments: 201
  1. 0
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    Sound policy and fair to all.

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      Not really!!!! They are STILL not touching the real WEALTHY and are giving away OUR tax money to the likes of:

      Paying Glencore Xstrata $109 million to pollute.
      Paying BHP Billiton $93 million to pollute.
      Paying Peabody $58 million to pollute.
      Paying Rio Tinto $57 million to pollute.
      Paying Anglo American $49 million to pollute.

      Five really bad ways to spend public money in the Federal Budget… mainly FOREIGN mining companies that earn BILLIONS annually out of OUR resources! They:

      -cadge OUR tax money and put it in their pockets
      -take their humongous profits overseas
      -pay very little in taxes
      -pay very little in royalties
      -pay next to nothing in mining lease fees (even I could afford some of them)
      -employ less and less Australians, since Abbott’s carte blanche on 457visas
      -utilise overseas contractors to supply most of their mining needs

      So…. tell me again how this government is finally getting it [email protected]#$%***&^?????

      Agree with removing excesses and those rules that allow the rorting of the system BUT it seems their new budget cuts are merely window dressing and just hurt some of those that are okay but need a little help, just like the rest of us!

      Why not just STOP GIVING OUR TAX MONEY to FOREIGN MINING GIANTS who give absolutely NOTHING to Australia and are here simply to EXTRACT as much profits from this country as possible WITHOUT putting ANYTHING BACK.

      Sorry Drew but you seem desperate to squeeze SOMETHING from the hypocrisy of this abjectly substandard and (in my opinion) grossly (criminally so) inept government, just because you are a Liberal voter. This lot stink all the way through, no salvage possible. The beginning of the rot started with Howard bending over for the USA and Howard’s need to keep idiots around him….. those same idiots are now running around under the control of a headless chook called Abbott.

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      Right on Dancer.
      Personal entitlements are tightly means tested. How about applying the same principle to corporate welfare? e.g. Does BHP and Rio Tinto really need the tax break designed for small farmers i.e. diesel fuel rebate. Are they entitled to tax deductibility of interest originally intended to assist development of small business? Individuals do not have this benefit at all. Do private health insurance funds really need the $15Bn annual donation received as a premium subsidy for an industry which otherwise would probably have otherwise have gone out of business?
      When will this government learn to look for all the dots to be joined rather thabn only those they want to see?

  2. 0
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    Don’t know why you included a “Read More” link to those wankers “The Australian”, the scumbags won’t let you read the article without subscribing ! AS IF !!!

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      So Fearlessfly, you think that everything should be supplied to you free?

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      Yes Sceptic… unfortunately our society is now one of “entitlement”…The “forever needy” are now encouraged by a confederacy of high moral ground crusaders to blame their circumstances on those who have got an education or trade, got a job, stuck at it over many decades and made something of their lives.

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      I expect a link from a FREE website to an item featured on that FREE website to also be FREE to read. Fortunately the other 3 links go to freely readable articles.

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      I guess that it is another Murdoch conspiracy against the left then, as when I click on The Australian link, it opens.

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      Nope, still comes up with the “You’ve reached a Subscriber Only article” page. Using latest Chrome browser with cookies enabled.

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      My browser is Explorer 11

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      It seems that Microsoft owns The Australian !!!

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      Well, that is interesting, I’ve just tried the link using IE 11 and get the same result – no access ! It would seem that Sceptic may be a preferred partner of The Australian website 🙂 Oh well, never mind, as an IT guru I was intrigued as to why the difference in access.

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      Well, that is interesting, I’ve just tried the link using IE 11 and get the same result – no access ! It would seem that Sceptic may be a preferred partner of The Australian website 🙂 Oh well, never mind, as an IT guru I was intrigued as to why the difference in access.

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      fearlessfly
      Sceptic is what you surmised, part of the propaganda machinations.

      I agree that all corporate media should be free, as enough money is made from advertising PLUS why should be PAY to get news and information that is CORPORATE (foreign) points of VIEW of what is happening in Australia and the world. Most of the content comes from the USA and reflects PURELY their country and their corporations point of view, even if it means supporting vicious dictatorships, such as Saudi Arabia who have had USA funding, training and weapons supplied to create ISIS who were used to ‘create’ false uprisings in Libya and Syria and are now STILL doing Saudi Arabia’s bidding without much SERIOUS counterattack by the USA.

      Australia and Australians hear NOTHING of the DIRTY, MURDEROUS stuff that the USA and its allies are into. One example only – we are not told a lot about the USA’s OFFICIAL Presidentially approved ‘kill’ list. That’s right…. the USA sends drones into foreign sovereignties and murders people on this list, along with anyone that just happens to be standing near them (women and children included). The USA are NOT at war with these countries, they do NOT call on the International Courts to bring those they target for death, to a DEMOCRATIC legal process, whereby the USA is required to PROVE its case against those people…… NO, they simply MURDER them in their own country. REMEMBER of course that they consider ANYONE that they do NOT LIKE to be an enemy and therefore put on the official ‘kill’ list. Julian Assange an Australian who merely reported gross malfeasance and crimes by the USA govt, and had done nothing illegal in Australia OR the USA, is a contender for this list.

  3. 0
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    So currently, the asset limit for a single home owner is $202,000 in order to receive the full pension – will this remain the same?

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    once agan the present amounts are not a luxury people are receiving very little interest on that money. They can’t make ends meet two and a half percent of 3 percent on a million dollars equites to 25 or 30 thousand dollars a year for 2 people to live on less than the pension. the only people who think it’s a lot of money are people who have never done a days work in there life. Or politicians who live in Fantasyland with no idea of the value of money as they have plenty plus all the perks. people who have what I had old and lives and attempting to support themselves in retirement should be given some benefits such as pharmaceutical health excetra. Jack

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      If you have $1M and you get $25K interest a year you could live on $65K a year for about 25 years. And your taxbill would be zero. Why is that a problem?

    • 0
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      I believe any retiree should be eligible for the PCC card. That includes self-funded retirees who don’t get money from Cenrelink.

    • 0
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      I agree it is not just the interest on the money you have to live on but that’s what your capital is for as well.

    • 0
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      concur Theo – I am in that zone and getting 61k but 30 minutes looking got me much better interest rate than 2.5%.

    • 0
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      Theo…The major problem is your maths.3% on a million for the first year yes… then a rapidly dwindling capital thereafter with your draw down of $40,000 each year therafter. What is the incentive for people to save any money…and not be a burden on the taxpayer on retirement? Too many “forever needy” in our society to support… to the detriment of those who strive to achieve.

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      I agree with Jacka. Self-funded retirees SHOULD be much better off than pensioners and should be left with a little to leave their children. Otherwise, why bother to work hard and scrimp and save all your life? So you can watch the Government hand out to all the people who put their money through poker machines, bet on race horses, took lavish holidays, etc. and they can CONTINUE to have a better lifestyle than the hard workers and careful savers ever had?

      I fully support payment of a decent pension to the needy, but the vast majority of full pensioners are only full pensioners because they spent freely in their youth, or they contrived to get the pension (by giving their money to their kids before they turned 60, for example!)

      And why pay part pensions to a couple earning more than $70,000 a year (possibly from a special type of pension that the privileged can enjoy) but not to someone whose investments yield maybe $45,000 a year or less? How is that fair?

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      Theo –
      Even if your figures are correct – what will 65K buy in 20 or 25 YEARS TIME from now ? You have not taken inflation into account and who knows whether super growth will outstrip inflation [another factor]. we cant even think of official inflation rates as being representative of some cost increases [ think of your recent insurance premium hikes ] and if you are a home owner what about the longer term maintenance costs you have to provide for,
      The idea of including the home in assets is fraught with valuation problems so proponents of that should really ,really ,REALLY think about that.

      We are often compared with the UK but note none of the major parties in the forthcoming election advocate any form of “means testing” for their state pension.

      lets remember this is not about equitable fairer systems its a money grab by politicians to help balance the budget. Why not cancel a couple of new jets they have on order which are a fiasco anyway if you look into that. Our governments have shown themselves to be incompetent in managing our affairs and I don’t see that anything has changed.

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      The proposal by the Greens to introduce progressive taxation on super for high income earners would save many times more than the amount this stupid move will save, and would provide incentive and help for people to save for retirement, instead of punishing those who have struggled for years to try to finance a comfortable retirement. This measure will make many who are just over the new assets limit worse off than pensioners. After a lifetime of sacrifice to accrue some savings, that’s unfair – especially since the majority of full pensioners are not people who suffered disadvantage, but were spendthrifts who did not go without in earlier years. Now those who struggled and sacrificed to fund a better lifestyle in old age have to hand over all their hard-earned savings to fund higher pensions for the spendthrifts who will now be better off than the savers.
      t won’t save money in the long term either, because the returns on investments won’t be enough to live on, let alone to grow the nest egg to keep pace with inflation, so very soon all those who have been cheated out of the rewards for being frugal will be on pensions anyway.

      Implementing the Green’s proposal for changing the way superannuation income is taxed would cut almost cut the deficit in half without really hurting anyone. It would merely make the very rich pay a fair tax, instead of reaping grossly unfair advantage at the expense of lower income earners who, under the current system, struggle to accumulate a reasonable retirement nest egg. Why won’t the Government implement the Green’s proposal? Because they only care about looking after the rich – not the deserving battlers who have worked hard to move up just a little in the world. Those who work hard and try must be constantly pushed down, lest they achieve a standard of living that enables them avoid exploitation by the rich.

  5. 0
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    I do not believe that an “Actual Figure” should be stated as this will be subject to “Inflationary influences” very fast and – then once again make for a draconian regulation.

    Why not take the “Sale Price of homes in a geographical area (suburb), multiply this by this by say 2 (or 3) and accept this as an acceptable threshold for applying the asset test!

    The pricing of such properties should be easily available from “Real Estates” of the Valuer General’s office.
    This should identify those who are using their personal HOME as an “Investment Haven”!

    Actions as described above then REMOVE the problem associated with escalated Property Values like Sydney & Melbourne as compared to many “Small Country Town Properties”.

    It also ensures that – we the People – do not have to continuously Guard/Fight against implementing “Threshold Adjustments” to avoid being “Caught in the Net” as the “Threshold” is adjusted “fairy & automatically”.

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      In NSW Patriot, the valuations from the Valuer General’s Office are for unimproved land value. The valuation does not include the value of the $5million house. That valuation would need to come from another source.

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      [email protected]
      Same here in Queensland.
      However, the Value is Sales in a suburb is reported either to or accessible to them as they adjust the land values even in suburbs where there is “No more vacant land” available for trading.
      Even if my assumptions (1/2 facts) are incorrect, if the “WILL” was there, the mechanics would be easily and simple to devise!

  6. 0
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    Can’t see anything wrong with the projected changes. After all, it’s just a reversion to the pre-2007 limits, before Johnny Howard relaxed them for his rich mates.

    • 0
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      Aaron, It is not a return to pre-2007 limits as in 2007 superannuation was not included as an asset.

    • 0
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      Also,interest rates have fallen dramatically since pre-2007. It’s a different world of investment. Retirees who worked hard and sacrificed lifestyle to accumulate a little for retirement will now be poverty-stricken and tempted to spend all they have quickly so they qualify for the generous benefits given to pensioners.

      Why should someone who has struggled all their life – going without luxuries – to save enough for a comfortable retirement now be worse off than a full pensioner? It’s grossly unfair.

  7. 0
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    All the new policy will do will be to force people to spend their hard earned on cars, cruises and holidays until their assets fall below the threshold. Maybe that’s what the govt really wants, to boost spending. But it’s selling off the family jewels in the long run.
    Stupid, Stupid policy.
    If they have to do something….rather have a withdrawal tax. Now there’s an incentive to keep your cash intact!
    Isn’t it strange that those that scrimped, saved, didn’t go on expensive holidays, now are the cause of the govt overspending like drunken sailors whilst the boom was on.
    Costello, Howard, Rudd, Gillard, Rudd. A pox on all of you!

  8. 0
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    Personally, I don’t think it’s a matter of how one’s level of faith in the government has changed over the past 12 months, Rather that their credibility/loyalty should be rated in varying degrees of distrust – at least until such time that they have earned SOME level of taxpayer faith.

  9. 0
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    We have saved for many years in order to have a relatively small amount of superannuation.
    Super is now included in the asset test. If the government put the asset test to $3:00 per $1000 per f/n that = 7.8% per year, which is more than some superannuation’s are earning . Currently they are taking about 3.9% of the total, not just the earnings, but off the same money every year. This means that if the super did not earn interest the government would take the total amount in less than 13 years.
    This is also more than the required minimum drawdown of 5%
    This money has to last us for the rest of our lives, but instead the government will take it away until we end up needing a full pension. This would be fair only if the full pension limit was raised to compensate for people with a modest super.
    This would totally discourage people from putting money in super and therefore create a worse problem down the track as people will have to start to rely totally on the state pension and/or live in total poverty.

    • 0
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      “This would totally discourage people from putting money in super and therefore create a worse problem down the track as people will have to start to rely totally on the state pension and/or live in total poverty.” Brisand U got it in one! But nobody is listening!!!! These changes, and no doubt many more will follow, will turn saving up a Super Nest Egg nothing but a poor joke. One might as well party now as ‘saved money’ will simply be given away to ‘more deserving people’ needing your money!!!!

  10. 0
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    To Brisand. You’ve hit the nail on the head, totally correct some of us have saved diligently for the future and are being penalized for it. All most of us would like is the pharmaceutical and health card to help us out in our old age. we can probably struggle along on our savings. The other would be a thank you from the government for a life time of saveings.

    • 0
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      Very true Jacka

    • 0
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      You are spot on Jacka, all we want is the pharmaceutical and health card. And as you say, a thank you from the government for not spending every last cent we earned and hence receiving no pension at all.

      Instead of that, all we get is criticism from all directions that we are the ones causing all the problems. I am sick and tired of being told I am the problem when there so many bludgers on the dole and single parent pension who are the real problem facing Australia – they have never given anything to Australia and probably never will while the government is intent on filling their bludging hands with money.

    • 0
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      Jacko and Pablo : couldn’ t agree more. No prizes here for having done the right thing.

    • 0
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      No Good Deed Shall Go Unpunished. Is that the message the Gumint wants to send regarding the “Lifters” that contributed to Super?

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