Your preferred Budget policies

Generous super concessions remain older Australians’ greatest bugbear.

Your preferred budget policies

Generous super concessions remain the greatest bugbear amongst YourLifeChoices members. Two thirds of the 3500, 2015 Budget Submission survey respondents would rather the government curb excessive tax concessions for wealthy Australians rather than alter the part Age Pension taper rate, which reduces pension payments based on personal asset levels.

Health is also high on our members’ wish lists, with access to better dental care being ranked as ‘important’ or ‘very important’ by 86 per cent. Government assurances that there will be no Medicare co-payment or ‘price signal’ also ranked highly. Affordable private health insurance was ranked as ‘important’ or ‘very important’ by 84 per cent of those who took the survey.

As reported by Mark Kenny in Saturday’s Sydney Morning Herald and The Age, the survey was undertaken to ascertain exactly what older Australians want to see in the budget and, not surprisingly, its hands off the Age Pension and fewer concessions for those who simply don’t need them.

The country’s three-pillar retirement system is a cause for concern, with almost half of all respondents ranking as ‘very important’ the need for an urgent review into pension arrangements, taxation and superannuation. A lift in the Age Pension payment rate to take it above the poverty line was also deemed important by our members, with 84 per cent agreeing it should be lifted to be in line with the recommendation for a modest lifestyle as set by the Association of Superannuation Funds of Australia (ASFA).

A Royal Commission into the misconduct of certain financial planners and their institutions also rated highly, with 84 per cent calling this ‘important’ or ‘very important’.

Our publisher, Kaye Fallick, told chief political correspondent, Mark Kenny, "It is our belief that a lot of people purport to speak on behalf of older Australians and that some of the groups who are doing so are at least partly funded by government, so we thought it was really important, as an independent website, to test policy ideas rather than say what older Australians want."

The YourLifeChoices 2015 Budget Submission survey will close on 23 April 2015 so, if you haven’t already had your say on your priorities for the Federal Budget, there’s still time to do so.





    COMMENTS

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    LiveItUp
    20th Apr 2015
    10:51am
    Self funded retirees ask for nothing form the Government so they should be left alone and not punished by the the Government.
    TREBOR
    20th Apr 2015
    1:08pm
    Yeeess.. but beyond a certain point, i.e. excessive concession, they're not really self-funded, are they? They are funded partially by tax breaks, which seems to be the issue.

    Is there a difference between tax breaks and receiving a pension? It all comes out of the same revenue streams.
    Anonymous
    20th Apr 2015
    5:18pm
    Trevor is right. ''Self-funded'' is a misnomer. They are NOT. They accrue their retirement savings through tax concessions that give huge benefit to the well-to-do and actually punish the poor. Someone on a very low income pays MORE tax on earnings in their super fund than they would pay if they earned that money directly. Yet someone on a high income has their super earnings topped up by a tax concession of up to 33c in the dollar. Ultimately, a so-called ''self-funded'' retiree costs taxpayers more over 20 years in retirement than a full aged pensioner. The argument is always that the well-to-do earn their money and should be allowed to keep it, but doesn't the laborer and the shop assistant work just as hard? We need to reassess our ideas about fairness.
    LiveItUp
    20th Apr 2015
    5:54pm
    Most of the people self funded today would not have got big tax breaks from putting money into super. Labourers and shop assistants can also be self funded retirees so it is not just the well paid and wealthy.
    TREBOR
    21st Apr 2015
    3:15pm
    Hmm - I had my own super before it became the done thing - it was a tax concession then which was why my accountant suggested it. Trouble was it had too many hidden costs and too much changing by governments when they felt it was too costly...... damn - that rings a bell.....
    Not Senile Yet!
    20th Apr 2015
    10:52am
    As usual the Government chooses to ignore the concerns of the average Australian about their misdirected attempts to fix the Budget by slogging those that already have paid their taxes for 40+ yrs.
    The unfair amount subsidizing super needs to be addressed....even their own MP's see this as a more genuine way of fixing the bleeding of the tax of the average Australian into un-necessary subsidies.
    If it is fair to have an asset test for Pensioners...then it is fair to apply the same test to the Super subsidies!!!
    The savings are ten times more than any cuts to Welfare....as their own report shows!!!!
    This Government refuses to address the subject because it also calls for the tax subsidy of MP's Super to be addressed as well!!!
    Pigs feeding at the Tax Trough are the Party Machines Mates and Members......no wonder they have their heads in the Sand!!!
    LiveItUp
    20th Apr 2015
    11:50am
    If it's unfair to subsidise super then it is unfair to pay people a pension.
    Anonymous
    20th Apr 2015
    11:56am
    You are spot on Bonny
    TREBOR
    20th Apr 2015
    1:13pm
    Why, Bonny? As many times, those on pension have put aside money via taxes for many years, and look around you - are we living in a country overflowing with jobs for older people, many of whom have had to weather the storms of life while having little to no opportunity to put large sums away?

    I'll say it again - subsidies up to sufficient put away to fund you at pension rate - after that it is savings, same as the pensioner cops tax on savings interest and has it included as asset.

    Same deal for all - simple really.

    Some have the opportunity to put away masses of money and evade tax - that is the issue - not your average income deriver who gets by on self-funding.. it is the big cats that are in the sights.
    LiveItUp
    20th Apr 2015
    1:51pm
    Are you saying I shouldn't be allowed to pay taxes for many years, put money into super and draw my own pension as a fully self funded retiree? If fully self funded retirees are limited to what others get as a government funded pension pension then why be a self funded retiree? Most self funded retirees don't become so due to good luck but more so due to careful planning for their retirement. These people cost the government nothing so why are government pensioners so jealous of them? Asked them and most would say that it isn't fair that others have contributed nothing towards their retirement should be given anything more than enough to cover the basics.
    Anonymous
    20th Apr 2015
    5:25pm
    I agree with Bonny to a point - but there has to be a balance somewhere. Certainly, those who work hard and go without to save and invest SHOULD be better off than pensioners. It's grossly unfair and unreasonable to suggest that savers should be left no better off than those who choose to live it up in their youth and draw pensions later. But giving someone on $180,000+ pa salary a 33c in the dollar tax concession on earnings in super while someone on $20,000 p.a. has to pay more tax on earnings in super than on their regular salary is just plain wrong and can never be justified.
    Bonny, I think care needs to be exercised in changing the rules for those already retired with savings. They have taken a huge hit with falling investment returns and those just over the assets limit may well be worse off than many pensioners, but we definitely need to change the way super tax concessions work for those still employed, so that we give low income earners incentives to save for retirement and a helping hand to do so, instead of feeding the greed of those who will be self-funded in retirement anyway and certainly don't need the taxpayer's help.
    TREBOR
    20th Apr 2015
    7:16pm
    Generalise, generalise, generalise - assumption that people with nothing in retirement have just spent it all.. not a single word of foundation there. Many have done it tough and sustained the hits of many things in this life - and again I refer you to the lack of work for those - say 45+, who are in the last twenty years or so of creating a retirement fund. Not only that, but this demographic often sustains divorce and so forth, meaning their assets are stripped in their late forties - a position from which it is hard to recover.

    All I am saying, Bonny, is that your earned retirement should be the same as those who took the hits in life, and after that the treatment should be the same. Many such people worked damned hard to end up with very little, so your effort is certainly no more than theirs.

    If pension was the reward for hard work, some, such as my good self - would be on a lot more.

    No - your super is not yours alone - you had tax concessions to get it, and once your income reaches pension, there is no reason for you to be treated any diferently from a pensioner who works after pension.

    Perhaps you'd rather see full tax levied on super contributions

    There is - again - zero difference between receiving tax concessions to garner a nest egg and receiving a pension. It all comes out of the same bucket.
    Not Amused
    20th Apr 2015
    1:16pm
    People who don't take super in a lump sum usually receive a part-pension. Many people have been claiming their superannuation in lump sums, spending the lot, and subsequently being fully dependent on a government funded pension. The first thing that needs to be changed to save the pension budget is --- no lump sum payouts. Super contributions have always been generously under-taxed to encourage us to at least part-fund our retirements, saving taxpayers some of the burden. Superannuation pensions will need to be subsidised by government part-pensions only until "catch up" e.g. when everyone has been making weekly contributions all their working lives, which has not been the case for many older people living today. And what is the definition of wealthy? If wealthy is anyone who is not on a full pension, and "wealthy" is anyone who saved a nest-egg for a few extras in life such as private health insurance or a holiday, or someone who paid off a nice home which increased in value over time, there will be a lot of people who might lose the personal achievement incentive. We'll be left with a population of under-achievers all wanting government-funded accommodation.
    KSS
    20th Apr 2015
    1:28pm
    I agree Not Amused. It seems to me that 'wealthy' tends to mean - 'anyone-who-has got-more-than-me'. And of course it is never their fault that they have not saved for their own retirement. And those that have/do/will are always more fortunate and deserve to be punished by paying more.
    LiveItUp
    20th Apr 2015
    2:39pm
    You can't take a lump sum out of super. You can take out a minimum amount and up to 100% as a pension. All that's needs to be done is adjust the 100%. Some people would be better off taking all their money out of super as the fees for balances $100.000 possible $200,000 are so high that it's uneconomical to keep your money in them. Al this does is make the super manager rich at the expense of the retiree. So people need to be careful what they wish for.
    Anonymous
    20th Apr 2015
    5:32pm
    I don't see it as reasonable to stop lump sum payouts, despite the fact that I recognize the logic in the argument. People may incur huge unexpected expenses in retirement - a need for major home repairs, to replace the family car, or major medical expenses. Even a holiday, for those who never enjoyed holidays while working but planned for one big one after retirement, seems a fair entitlement in some circumstances. What about those who make a lump sum withdrawal to help a disabled child or grandchild or to support aging parents? If we stop all of this, there may be a great deal more hardship and drain on taxpayers.
    Of course there is merit in the argument that people who have assets shouldn't be spending large sums and then drawing pensions, but how is that really different from people living it up during their working lives - and not saving - and then claiming the pension? I find it offensive that pensioners who earned much better wages than I did and enjoyed far better lifestyles than I could ever contemplate are now saying I should be denied the right to enjoy my savings so they can get a better deal in old age. Fully support the idea that the genuinely needy should be prioritized, but half our full pensioners are greedy, not needy! We need to make changes to the system to implement balance and fairness, but those who struggled to save a little for old age should be allowed to enjoy their just reward.
    TREBOR
    20th Apr 2015
    7:19pm
    IF super were fully taxed, there would be no argument over the right to withdraw it, but as it is, the government holds the whip hand over you for doing so, since they allow those tax concessions. Perhaps that is an area we need to consider, and see what ideas come up.

    In reality, it's your money, and you should be able to draw it any way you want.

    I had to draw mine to pay bills left over from divorce and unemployment, injury etc. Not recommended.
    Anonymous
    22nd Apr 2015
    3:54pm
    most retirees I know are part pension/part super. They "make" sure they keep below the thresholds to obtain a small part pension and the concession card and I would suggest there are probably quite a few on this site who do exactly the same.
    Anonymous
    22nd Apr 2015
    3:59pm
    Just waved good bye to a couple who are off overseas for 8 weeks, flying to London, having an 8 day trafalgar tour, then getting on a boat for a 37 day cruise, back to London and then flying home. These are part pension/part super recipients. Every year they do something similar. Yes, retirement is good for many retirees. I wish them well; they worked hard, saved hard and are playing by the current rules and doing nothing illegal.
    KSS
    20th Apr 2015
    1:23pm
    The problem with the Your Choices survey is that it is one sided and biased. It only gives a limited number of choices and if you happen to disagree or want to answer something different you can't answer.

    I am getting sick of hearing suggestions that effectively punish those who have made or are making sacrifices to fund their retirement just because they have 'more' than others. Talk of limiting assets to between $750,000 and $1m is ridiculous. There is much truth in the saying "be careful what you wish for". Set these limits at that level and there is no incentive for people to save for their retirement. That will result in more people relying on an aged pension.

    Seems to me that people want changes made as long as THEY don't have to make any and they end up with 'more'.
    TREBOR
    20th Apr 2015
    1:35pm
    The whole thing is flawed since it does not fairly take into account the many things involved, and cannot in reality. I agree that the suggested levels are too low with current housing etc prices and cost of living - but I will say again - it is really only the very fat who should rightly be reviewed, in several ways. Those with sufficient should not be punished - but there has to be a cutoff point somewhere at which the subsidies cut out completely - same as earning on a pension.

    My biggest concern is that inflation etc will rapidly eat into the value of any assets and thus will soon put many behind on deeming.
    LiveItUp
    20th Apr 2015
    1:56pm
    I agree that the assets limits are currently too high and should be cut back from the now over generous limits even $750,000 is too high. People with assets should have to spend them before they get a pension that's where the government will save a lot of money.
    KSS
    20th Apr 2015
    2:27pm
    Bonny this is where you are a little out of touch. $750000 is less than the currently recommended about to secure a modest income for retirement. If you want people to be self funding you HAVE to allow them to amass the amount that allows them to do so. $750,000 does not do that even just for super savings, if you want to add the family home into the mix (and actually I have no issue with that per se) you have to allow for the difference between modest housing in say Sydney and the same type of housing in say Tasmania which may well be half the value. Trust me when I say $750,000 would buy a very modest 2 bedroom unit in most suburbs in Sydney. You do have to live somewhere and we could not make 24 million people move to Tassie!
    LiveItUp
    20th Apr 2015
    2:31pm
    The family home is currently not in the assets test but should be. I'm talking about $750,000 without the family home. If you earn at least 5% or more like 10% on $750,000 a year which is any where between $35,000 and $70,000 then you don't need the pension. If you are not earning at least 5% but closer to 10% on your savings in this market then you are poorly invested.
    Anonymous
    20th Apr 2015
    4:51pm
    KSS - your so right - and its run by Kenny for SMH and Age - seriously only the guardian is more left wing
    Anonymous
    20th Apr 2015
    5:39pm
    Bonny, interest rates are currently less than 3%. To get more, you have to move to riskier investments. Understandably, some are not comfortable with that. Someone with $750,000 plus a home will likely have some $100,000 in non-returning assets (furniture, car, personal items, etc). That leaves $650,000 to earn income. At 5%, that's only $32,500 - less than the pension for a couple. Where's the incentive to save? If I knew that would be the result of a lifetime of sacrifice to save for old age, I'd spend all I have or give it to my kids before turning 60. I know many who've done that and now draw a full pension.
    If you can tell me where, in today's economy, to get 10% return with minimal risk, I'll sack my financial adviser and hire you.
    LiveItUp
    20th Apr 2015
    6:09pm
    Investing in interest rate investments today is one of the riskiest investments one can have. Inflation and tax will have you with negative returns so you need to invest in investments that grow your money not stagnate it like interest investments.
    TREBOR
    20th Apr 2015
    7:24pm
    Rainey - that's why the majority of 'self-funded' are not fully self-funded, but draw some pension or at least have a card with benefits...

    It is very difficult to actually generate the income at pension rate at current interest rates with the limits being looked at, so I suspect more than a little prurient self-interest in politicians and policy is at play here.

    No retiree should be on less than the pension rate from income or whatever and that should be topped up as required, still saving the government money since they will not be paying full pension, and this current idea places many into that situation of not generating enough income, which - as Bonny said - is grossly unfair.
    Old Silver Fox
    20th Apr 2015
    8:28pm
    Gee Bonny you are a hard task master. The average SMSF returns about 4.3 to 4.5% when invested in the share market - go check the latest figures.
    marymint5
    20th Apr 2015
    3:00pm
    I worked full time here in Australia for 25 years in a Public Hospital. Wen I reach pension age I was told I needed to apply to the UK ( I worked there full time for 15 years ) I applied and received apart pension from them ( not means tested ) I then applied for my Australian pension and had to fill in forms about 25 of them telling them everything I owned and what money in the bank( which was nothing at the time ) I then received a small part pension from them both of my pensions did not equal the Australian pension.
    So people out there who think expats get 2 pensions are very very wrong. I also paid my taxes & my medicare ( even though I had private Insurance since we arrived here in 1978).
    I think Australia sucks with the pensions for pensioners they are all for looking after very wealthy people & Big Business( including themselves ).
    particolor
    20th Apr 2015
    4:29pm
    CHECK !! Spot On !! You got it !! It wont change !! ...Good Luck :-)
    TREBOR
    20th Apr 2015
    7:27pm
    Shocking story, Mary. Agree with you. No pensioner/superannuant should be on less than pension rate.
    peedee
    20th Apr 2015
    4:27pm
    I posted this on the politics section of your life choices on Saturday after reading Mark Kennys article. Yes I have cherry picked and used an example of self funded person outside super but it is a real scenario. The point of my comments are that there are too many commentators cherry picking but nobody putting the holistic view. Hence the need for a broad and wide ranging review. If you had $800,000 the first 50-100 would most likely be non income producing accounting for cars,maybe a caravan, household items and some trinkets gained over a lifetime. Bit of a generalisation there.
    This leaves $700k to produce the income. If it were invested in equities or bank term deposits with a nett return of 5% this would equate to an income of around $35000. Tax on this amount would be around $3200 leaving $32000 to live on. This is at a tax rate of 19c/dollar on earnings above $18200. If franking credits were involved they get added to the earnings before tax and this being the case you would most likely go partly into the next highest tax bracket which is 32.5 cents in the dollar but you would get some tax credits due to the franking. The whole issue is highly complex and interwoven that is why I asked the question who is listening to or promoting the views of those actually living with the system to get the broad cross section views.
    My understanding is that with pension supplement and energy supplement allowances a couple receive around $33.700 for a full pension.
    With the full pension outcomes being so close to the self funded example above my point is why go to the trouble of saving instead of spending up and receiving the full pension. Yes but you should spend your principal I hear you ask but all that does is (a) reduces your earning capacity and (b) if you use the ACOSS example bring you back into the system at a steeper rate which costs the government more anyway.
    particolor
    20th Apr 2015
    4:34pm
    I love Hirdy Girdy's Round about's and Swings !! :-)
    LiveItUp
    20th Apr 2015
    5:28pm
    The person in that real scenario doesn't need the pension so shouldn't be able to get it.
    Anonymous
    20th Apr 2015
    5:51pm
    Spot on, Peedee. And Bonny, neither should 3/4 of those who have nothing - because they CHOSE to live it up in their earlier years or gift money to their kids instead of saving for old age. So why don't we punish all the hard working who struggled and went without and saved for later and reward all those who spent freely and then put their hand out? That's a great way to create incentive and ensure more people aim for self-sufficiency, isn't it?
    I just wish there were a valid way to assess WHY the aged are in their current situation, so that the system could look after the needy properly and reward the deserving fairly, while reducing payments to those who SHOULD be self-funded so that they have to live on the subsistence income they deserve.
    TREBOR
    20th Apr 2015
    7:32pm
    Generalising again, Rainey.... most did NOT live it up etc. Are you suggesting that a widow who was a homemaker has no entitlement?

    There is no difference between deserving and needy - all are in the same boat - sorry to rock yours. Most of the needy did their bit and often took the hits in doing so. It requires good management, luck, and any number of other things to make it through the roller coaster of modern living with all of its changes and easy escapes from relationships, dismal industrial relations, dreadful economic management at all levels of management right up to the PM's office and so forth.

    Count yourself lucky to have gotten through it relatively unscathed - there but for one or two things go you......
    Fready
    20th Apr 2015
    6:22pm
    Bonny I'd like to know where you can get nearly 10% in a secure investment that doesn't have the risk of losing your capital. A term deposit is one of the few secure investments and they are now paying about 3%. As a result a couple who skimped and went without and saved on average $20,000 per annum for each of their 50 year working life are now in receipt of less income than a "leaner" on a full pension who never saved anything for their retirement. Tell me that's fair.!!
    LiveItUp
    20th Apr 2015
    7:18pm
    Exactly its not fair. Personally I think term deposits are very risky investments not secure at all. Tax and inflation erode your wealth very quickly at these current low rates. A secure investment to me is something that grows not loses capital in real terms. A couple of examples I know of personally is one where a person invested in term deposits and after living on the return each year has the same amount of money they had 15 years ago. Another person who invested the money in investments that grew their capital as well as taking out enough to live on for 15 years has grown their capital to nearly 8 times what they had 15 years ago. To me the first person has a lot more riskier investment than the second.
    KSS
    20th Apr 2015
    9:16pm
    And yet Bonny you would now punish the person who in your opinion invested wisely simply because they invested wisely and have a few bob in the bank. Where is the fairness in that?
    LiveItUp
    20th Apr 2015
    9:52pm
    Punish them NO they realise that they don't need a pension so wouldn't even bother going near Centrelink. Pensions should not be a right but only a last resort as the only people who should get pensions are those who have exhausted their own assets.
    TREBOR
    21st Apr 2015
    10:01am
    Once again - let me rain on the parade. When I was growing up and working etc, most older people had a Pension as a Right - and not one soul objected to their receiving it. It was and remains a Right for the simple reason that a proportion of income tax for generations has been levied to cater for Pensions and other
    Social Security - and that proportion has steadily increased over the years.

    Nowadays we seem to have this rather short conga line of people who, for some God-forsaken reason, seem to assume that all those on pensions are Leaners™ who've done nothing in life but live it up, and that somehow all such should live on nothing in retirement.

    Truly some of you astound me with your utter lack of reality, understanding, compassion, and realisation that without the already paid for Pension there would be death, sickness and rampant crime.

    How many of you really think that the current 800,000 acknowledged unemployed would not rob you to eat, thus destroying your security forever.... if such an event came to pass no police force on Earth could control it, and our society would descend into chaos. Those who KNEW they would have no safety net at life's end would set about developing it in any way they could, and your security in life would become tenuous to say the least.

    I think some of you really need to start getting your heads out of rhetoric and into reality for a change, and stop listening to the likes of Fat Joe, a twerp with zero idea of anything but usury.
    CindyLou
    20th Apr 2015
    9:12pm
    I'd love to have the statistics on people who have virtually never worked their entire lives, intergenerational welfare recipients familes...they reach pension age and are then age pension recipients. In my previous working life I had clients who never worked, were in public housing, called their welfare payments their 'pay'', some were on methadone, I don't want to be judgemental but omg.
    TREBOR
    21st Apr 2015
    10:06am
    A very small minority.. you suffer from (not sure what it's called) but from seeing the worst cases and the easy assumption that therefore there must be a far higher number out there. You see it with police, courts, and in such areas as domestic violence.

    The groups of which you speak are possibly around 1% and often of clear types (no names).

    When this country can reduce unemployment from 800,000 times two for underemployed, out of a workforce of twelve million - then you might see some change, and some real opportunity to address the issues of long-term and generational unemployment etc. Until then there is no chance of even looking squarely at such issues.
    TREBOR
    21st Apr 2015
    1:33pm
    Another good statistic would be on those who are genuinely "self-funded retirees" - from their own efforts. Many such are retired public servants who have had the benefit of Welfare™ in advance through having a supported superannuation scheme. Even politicians are no 'self-funded' since they suck deeply off the public pruse long after retirement. I would venture that no more than 1% are genuinely 'self-funded' without some level of Welfare™ via supported super, tax concessions on super and/or income, or handouts in other ways along the way.

    Kinda puts a different slant on the idea of 'leaners' and 'lifters', doesn't it?
    worker
    23rd Apr 2015
    11:34am
    Budget should state there will be no life time payments and perks for MPs when they are no longer employed as MPs by the Australian citizens.

    Also superannuation of MPs to be in line with other workers.
    Fair Go
    15th May 2015
    5:15pm
    Bonny 20.4.15 - do not judge pensioners as "none savers and wasters". I am now 70 years of age and on a full pension and finding it extremely difficult, because:
    when I was left by myself with 2 small children, I wasn't working. While I was home with small children computers arrived. I missed this, as I was not working and was struggling on a single parents' pension. I then cleaned houses for 8 years, before some re-training and back into the workforce. By then I was in my mid 40's. Still had dependant children, not a very large salary, one child had a uni. education. Also had a mortgage to pay off, so how, pray, was I supposed to save all this money for retirement? Retired at 66 with not much super and practically no savings. So really, just think before you put all pensioners together in one basket as non savers, wasters of money etc. There are many reasons why a person has not been able to save. I didn't get any super paid into a fund until the 1990s.