Reliance on Age Pension remains

The white paper on retirement incomes highlights the financial issues facing retirees.

Reliance on Age Pension remains

A new report compiled by Rice Warner on behalf of the Actuaries Institute, has revealed that of those Australians now aged 30, over half will rely on the Age Pension as a means of retirement income. The white paper on retirement incomes, For Richer, For Poorer, highlights the financial issues facing future retirees.

The paper found that the changes, scheduled to commence on 1 July 2017, to asset thresholds and taper rates may result in median wealth couples losing the part Age Pension, which would affect their hopes of a comfortable standard of living. By comparison, the report found that even though those in the top income bracket could easily afford a comfortable lifestyle, they still qualify for a part Age Pension.

But the news is worse for those who are least wealthy, as their reliance on the Age Pension as a retirement income will continue. For those in the bottom five per cent income bracket, the Age Pension provided 93 per cent of their income in retirement and 73 per cent for those in the bottom 25 per cent income bracket.

“Importantly, the white paper shows that the least wealthy sections of the community, both now and in the future, will continue to be entirely dependent on the Age Pension to maintain even a modest lifestyle”, said Actuaries Institute chief executive David Bell.

One particularly sobering statistic was uncovered; those in the top five per cent income bracket had 50 times as much wealth as those in the bottom five per cent income bracket. This differential would drop to 10-fold for those retiring in 30 years time, suggesting that the superannuation guarantee is working for those who have had long enough to reap the benefit.

The report supports an already compelling case for a complete and forensic review of retirement incomes, including the inclusion of the family home in the asset test. Currently, an age pensioner could live in a property worth $3 million and have modest savings and still receive an Age Pension. Surely this can't be right?

You can download and read the full white paper at www.actuaries.asn.au.





    COMMENTS

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    Emps
    3rd Sep 2015
    10:46am
    Whoever has paid their taxes,are entitled to the age pension. In fact,the ones who have paid most, are surely entitled.
    niemakawa
    3rd Sep 2015
    7:22pm
    Most definitely.
    Retired Knowall
    4th Sep 2015
    2:05pm
    What about those that have never worked and lived off the tax payer all their lives.
    BTW, the tax most tax payers pay all their working lives, when adjusted for inflation and a 30% portion put aside would give pensioners less than 65% of todays pension.
    You might feel you are entitled, but that doesn't make you right.
    Glenda
    3rd Sep 2015
    11:16am
    Quote from Debbie McTaggart's "Reliance on Age Care Pension" article above .... "The report supports an already compelling case for a complete and forensic review of retirement incomes, including the inclusion of the family home in the asset test. Currently, an age pensioner could live in a property worth $3 million and have modest savings and still receive an Age Pension. Surely this can't be right?" - Close quote. ........ I think this is wrong and unfair because it could very well be that the age pensioner has worked really hard all his/her working years to get that family home, which was probably not ever thought of at that time, of carrying a value in the millions of dollars. So assuming that the house was worth around $500,000 10-12 years ago, it is not the fault of the age pensioner that the property has now risen in value to some millions of dollars. Can the age pensioner eat his/her family home? Can you get money out of bricks and mortar?? If the age pensioner does not have any income coming into the household, then it is only right that he/she receives the pension and that the family home should not be asset assessed and the pension removed from the age pensioner because he/she has this million dollar home. Or is it soon to be that aged and old pensioners will be driven out of their family homes to go where??? ... in the twilight and sunset stages of their lives. This does not seem right at all, is cruel and totally un-Australian.
    Kaz
    3rd Sep 2015
    11:32am
    Absolutely! Just because your house goes up in value while you continue to live in it and pay/paid the mortgage is not a reason to include it in the asset test. It cannot be realised or generate income until you sell it which you won't normally do until you have to move to retirement or nursing home or die. If you buy a $3m home just so you can claim the pension, that is a different story and could be considered.
    TREBOR
    3rd Sep 2015
    11:18am
    I agree with emps - pay everyone the pension and then treat everyone the exact same under the income taxation regime is the only way to resolve the current morass of retirement income issues.

    I only agree with inclusion of family home that is in excess of the value for the area in which that home sits - if you bought (I know someone who did) a nice little spot way up near Barrenjoey for $180k years ago, and it's now worth a couple of mill - you still have to live there and it doesn't generate income.

    A home is a home - not an income-generating asset.

    Where there is excessive input into that home to hoard wealth and then receive pension, there is a case, but it seems to me the real intent of this approach is to enforce down-sizing by retirees, thus putting more properties on the market to feed the only current viable 'industry' in Oz - what smarter people than I call 'house flipping', with all its protections by governments.
    don
    3rd Sep 2015
    11:34am
    A lt of people forget that say 30 years ago people bought their houses , fibro and brick in a new suburb. Well 30 years later that suburb is now mainly occupied by rich people so their houses are still the same but the value has gone heaven woods as they say. The pollies in WA were going to start a new tax on the value of houses , and amid mass opposition from the public . it was stopped. With all the waste by pollies , maybe their performance should be tied to their super. If they can privatize etc from their poor performance, their should be a yard stick on how much they get. Don
    Tom Tank
    3rd Sep 2015
    11:55am
    The age pension is for those who are unable to fund their retirement to provide a reasonable living standard.
    Now the cries will be that those people should have worked harder which is on a par with Joe Hockey's statement that "if you want to buy a house get a decent job".
    The only way you can understand another situation is to "walk in their shoes". Many people worked very hard in poorly paid jobs just as many people worked all their lives in the Public Service and retired on a very nice superannuation.
    The situation with the family home being included as an asset is based upon the scenario of someone receiving support from the public purse while they are sitting on a multi million dollar property. They are in fact asset rich even altho' they may be income poor.
    To look at it a little differently should someone living in a hovel worth next to nothing get a pension if they own a Rolls Royce valued at a million dollars? Again asset rich but income poor. You all may scoff but the principle is the same.
    Rae
    3rd Sep 2015
    4:10pm
    Very few people realise that those nurses, teachers, police retiring on a very nice superannuation paid dearly for it.

    The super was paid after tax with no 9% guarantee in most cases.
    It was a hefty amount after tax and was compulsory.

    If invested in real estate the same amount could have bought 8 to 9 houses over the 40 odd years it was paid into the fund.

    Returns were dreadful.

    The only thing going for it was that the pension if taken in full was about two thirds of final income and CPI adjusted.

    Very few public servants made it to the end to claim what theoretically was a whole lot of after tax savings.

    Perhaps if all workers had been forced to save in this way instead of having access to their earnings to spend as they liked then they too might have a very nice superannuation as you describe it.
    Anonymous
    6th Sep 2015
    10:26pm
    So, Tom Tank, you support the idea that someone who worked two jobs and lived in a caravan for 5 years so they could raise a good deposit on a home, then sacrificed holidays and nights out for 20 years to pay it off, should be denied a pension while someone who spent their money on overseas holidays and restaurant dinners and fancy clothes should have their retirement funded from the public purse?

    We need incentives for people to struggle to acquire a home, not penalties for being responsible and sacrificing lifestyle to build security for old age. I don't support the idea that people should be able to put millions into a home to escape the assets test, but neither should battlers be penalized for working hard and making sacrifices to ensure greater comfort in old age. People who acted responsibly are entitled to their reward. People should have the right to make spending choices without penalty. The current pension system is unfair in the extreme and counting the family home as an asset would make it a thousand times worse.

    It's also not been noted that home owners struggle with rising rates and insurance and maintenance bills, and without the rent assistance renters get, these expenses can be hard to bear. Yet selling to downsize is very costly. Maybe the government should consider stamp duty exemptions and assistance to meet removal costs and agent fees for retirees wanting to downsize. That might encourage some whose house values have inflated to downsize and use part of the house proceeds to improve their lifestyle. At present, everything is geared to indulging the cheats, manipulators and irresponsible and punishing those who work hard, plan, save, and sacrifice to try to be at least partly self-sufficient.

    3rd Sep 2015
    12:10pm
    We are born naked, wet, and hungry. Then things get worse.
    World Prophet
    7th Sep 2015
    12:44pm
    Ha ha - I like it
    Linda
    3rd Sep 2015
    12:20pm
    I agree that buying a home 30 years ago that cost say 75,000 dollars now worth so much more and calling it an asset to determine old age pension is hardly fair on pensioners. I also agree that those able to invest in properties over the years and get special lurks to avoid tax while their portfolios grow and young folks have no to little chance to purchase a home is grossly unfair. I did not read the whole article and can't see the possible bias therein. Did the author report what the percentage was say 20 years ago, before the superannuation thing started? Certainly the logic is, if one has a job, then one gets superannuation, and if they get superannuation and they are able to keep a job for a good number of years they will have a private pension to draw on.
    I really dislike the finger pointing going on here about who gets what and why. We need to think about the best for everyone. It probably isn't fair as costs of living goes up to expect people on fixed incomes to cope. It probably isn't fair that Joe Hocky's wife can purchase their Canberra home out of his expense account. I do think if there were appropriate and reasonable arrangements for older people to locate into more modest and more affordable accommodation they would do so. The facts are, at every turn, we oldies are dealing with a lot of sharks that want to get a hold of what we have, be it retirement villages, home care packages, nursing homes and the like.

    It is very easy to be duped and the story with our bib banks playing with peoples retirement funds, and such added to being cheated by buying a retirement village home, and such makes everyone feel very cautious about making any moves.
    Golden Oldie
    3rd Sep 2015
    12:38pm
    One important thing when claiming people are in multi million dollar houses and including this in the asset test, is that they conveniently forget the value of the land puts up the price, regardless of the state and size of the house, and the renovations required to keep it liveable. The price of the land is driven up by locations which are now favoured by investors and overseas buyers or by scarcity which is decided by governments in releasing land for building. In a lot of cases, particularly with old houses, the house is purchased for the land it sits on, and quite often is demolished for a rebuild. The home owner has very little say in this, so is it fair that the family home is valued at the land/house market price for asset testing? Is it fair that such a home owner is forced to sell and move away from the area they are used to for social contacts and friends?
    Glenda
    3rd Sep 2015
    2:14pm
    I agree, this is not fair at all. The family home does not generate any income, for most elderly folks like us this is the only lifetime investment and we live in our home. Not our fault that housing and property prices have increased dramatically, our homes can't give us money to live on unless we sell and where do we go from there?? I think overseas investors should be stopped from purchasing into the residential property market unless they are truly Australian citizens WITHOUT dual citizenship. Wealthy overseas investors are pushing up home prices to unrealistic heights, then developing the smallest block of land where there was once a humble house, into villas, unit and high rise buildings. So now the government, in their grab for money, is looking at asset testing the family home as a reason to stop or reduce the pension! This is not fair for age pensioners and old folks who have no control of spiralling property prices. How about the government first try to make ends meet by looking at themselves first + removing all perks that retired politicians continue to receive forever!! such as chauffeur driven cars, overseas trips, travel allowance (what for, when they have retired?).

    3rd Sep 2015
    1:24pm
    Of course, people are relying more and more on the Aged Pension. One of the main reasons for this is the low interest rates imposed by the RBA which gives us lower returns on safer investments like term deposits. With the economy the way it is a lot of people are very wary about risking their money in any option greater than a 2% to 4% earner. Housing sales certainly aren't on any upswing because of the ailing confidence in the flagging economy. This is a situation which feeds upon itself and worsens without remedial action such as raising interest rates, for a start. The Australian dollar's value is continually falling making the prices of imports greater and our purchasing power is being lessened accordingly. This is all just common sense and yet the stupid government does nothing but manage by crisis and try to increase federal revenue by penalising the workers with higher taxes, levies, duties, etc, rather than stimulating the economy by making more disposable income available. This is simple Economics 101 stuff and yet the ignorant, inept, greedy, hypocritical, selfish, and, oh yes, egotistical federal government politicians can't see, understand or care about doing a thing to correct out desperate plight. Pathetic! God help us!
    TREBOR
    4th Sep 2015
    12:24am
    Totally agree Eddie - and the government of two parties is the biggest problem that creates this.
    floss
    3rd Sep 2015
    1:36pm
    Money for pensions has to found some where and if the over seas multi nationals do not pay their fair share of tax where else can it come from.You people just can't get it.
    niemakawa
    3rd Sep 2015
    3:53pm
    Multi-nationals provide employment and the same rules apply to them as with local companies. They pay taxes according to the law. Many individuals do not pay their fair share of taxes ( or any tax) but these same people are the largest group of users of Government services.
    Not Amused
    3rd Sep 2015
    1:37pm
    My father-in-law worked hard six days a week, no annual leave, raised three kids, paid off his house and never had any holidays or luxuries that many others take for granted. The three kids stayed at home while he supported them through their university courses. He even found time to do volunteer work. When he was eventually admitted to a nursing home, the government scrutinised every cent he had because policy says if you can pay you will pay heaps, and if you didn't save or keep some money for a rainy day, you get it for "free".
    Coincidentally, In the nursing home room next to my father-in-law was a long-term neighbour who had always enjoyed holidays, rented his house, leased the latest car and wined and dined (almost) every woman in town after his wife had died. The neighbour was getting exactly the same level of care for exactly the same pension reduction as was my father-in-law. The difference being that my father-in-law was paying so much extra because he hadn't spent his savings and had kept his house so that his kids could have somewhere to live if they got stuck and needed it. This is another example of how the hardest working people who so often go without luxuries in order to pay off their houses, are penalised in comparison with those who don't.
    A lot is said about "fairness". We are always reading about "rich" people and how they should be paying more taxes and fees. There's a terrible green-eyed monster syndrome in this country. In the USA, hard work, success and prosperity are applauded, admired and regarded as an aspirational example for all others. In this country, a mere 25% of income earners pay almost 70% of the total tax-take. What is fair about that? How much more gouging of hard-working, successful people can the Australian culture condone? We seem to be more into manufacturing disincentives, wanting the hardest working and most sensible-thinking of our citizenry to prop up everyone who thinks they are automatically entitled to a better standard of living. In a tax/pension contest, every time I hear the words, "fair" and "equality", it reminds me of those poorly maintained, cold, grubby apartment buildings that still exist in Moscow and East Germany. So much for the "fairness" and "equality" philosophy. We seem to be experimenting with exactly the same failed ideology! In fact we should be celebrating the inventiveness and hard working spirit of the so-called rich. They are the people who take the entrepreneurial and financial risks, and they grow the jobs that expand our opportunities.



    What’s fair about the top 25% of income earners paying nearly 70% of income tax?
    niemakawa
    3rd Sep 2015
    3:48pm
    I agree. The so called "rich" are also the ones that have made many sacrifices during their working lives, started businesses, invested in people through employment. They should be paying less tax for the privilege, not more. There is and never will be "equality" as people are wired differently, some will become successful through their own endeavours, others will not because they fail to seize opportunities or have no ambition to improve themselves. So why should the "rich" support these individuals through higher taxes!! More credit should be given to the "wealthy" in our society instead of being used as a scapegoat to enrich the so called "poor".
    Anonymous
    3rd Sep 2015
    5:13pm
    niemakawa, I wholeheartedly agree with you. The hardworking should be awarded for their endeavours with fairer taxes (both income and payroll) and, if they make it to become wealthy that is then a further bonus for them. Hard work has become a dis-incentive in this country with it's resultant higher taxes and levies being the penalties. Much work has to be done with improving Centrelink's assessment procedures like: why are people unable to work, why are single mothers getting so much money for doing nothing but having kids, why am I being asked on a form if I am an Aboriginal or a Torres Strait Islander, why are people who have been living together for years each still getting single Aged Pensioner benefits, why should one have to pay tax on superannuation-based investments, etc, etc, etc. We, as individuals, are not benevolent societies here to fund the deadbeats, no-hopers, those with "Mediterranean Back" incapacities, baby factories, nor those with an unalienable birth right to sit back with an upturned palm. WAKE UP GOVERNMENT!
    TREBOR
    4th Sep 2015
    12:27am
    Yes - but those 'hard working' are not ONLY those who ended up rich. I worked seven days a week and endured every evil of this society to get where I am... and I'm not rich, let me tell you.

    How do you want to calculate retirement income? Based on hours of work each week? I habitually did over 100..... ergo - my pension should be 2.5 times ordinary pension - say around $2500 a fortnight?

    Careful what you ask for.... and careful what standard you advocate for a good lifestyle....
    Anonymous
    4th Sep 2015
    8:17am
    I am careful with EVERYTHING, let me tell YOU. And, as far as advocating a lifestyle, the standard of "good" is a subjective one and totally up to the selection of the individual.
    Anonymous
    5th Sep 2015
    10:21am
    What's fair about the top 25% of income earners paying 70% of taxes? They use more than 70% of communal resources. That's what's fair. Look at what mine trucks do to public roads. Look at the power infrastructure needed to run mines and factories. Look at the subsidies given to large agricultural enterprises and the land resources allocated to them. How many people do the rich employ and pay much less than those people earn for them? And those people have to drive on roads and use government resources in order to exist and retain employment.

    We've lost our perspective in recent decades. We used to acknowledge that the rich got rich and maintained wealth on the back of resources that are morally communally owned by the entire populace, and they should put back accordingly. Now, we've adopted this absurd ''they earned it - it's theirs'' mentality, while claiming the lower-middle-class and working class battlers should not be allowed to retain the benefit of a lifetime of hard work and frugal living. It makes no sense at all!

    Trebor is right. Actually, most of the rich DIDN'T work very hard, but were born privileged or got lucky, while many of the poor worked extremely hard for very little reward.
    Thai Traveller
    3rd Sep 2015
    1:57pm
    As the Australian dollar continues to decline in value, those of us living a basic life in Asia, are looking to head for home. After all, a 20% decline in our pensions is starting to squeeze.

    Yes, it's our choice to live in Asia, just as it is to pay 100% of our medical bills, surgery, pharmaceuticals, pay more than most as we're foreign, no pensioner discounts, high insurance premiums, and certainly no rent subsidies and the like.

    Times are becoming tough here, just as it is seems to be at home.
    niemakawa
    3rd Sep 2015
    3:40pm
    If this is the case whereby even today those over 30 , the majority will still rely on a Government pension upon retirement, then surely it is time to introduce a National Insurance scheme. Everyone pays into the fund and can expect a State pension when they retire. Anyone can still pay into a super. fund if they want a better life style, that is a choice by the individual. Then there will be no need for "means testing".
    Rae
    3rd Sep 2015
    4:16pm
    They did that already decades ago but then the government folded it all into revenue. The tax stayed for a very long time though.

    It is a bit like the lotteries and lotto to pay for the hospitals. How is that working out now?
    niemakawa
    3rd Sep 2015
    7:24pm
    Yes I know Rae. But why is no one in "authority" suggesting to re-introduce this scheme? Seems odd to me.
    TREBOR
    4th Sep 2015
    12:31am
    Spot on niek - and anyone who has cash sorted out above that level of National retirement pay is treated the same way for tax as the pensioner who works is currently treated.... and that includes politicians and with the addition of Fringe Benefits Tax and deemed income from having a free office and such.

    Why do you think FBT was handed to the employer? Because that way no politician would have to pay it for the perks in the political afterlife, and the government wasn't going to tax itself, was it?
    tams
    3rd Sep 2015
    5:49pm
    Some of our readers obviously believe a $3.0m home, increasing at $150,000 per annum (5%) should allow the owner to receive an aged pension of $22367 each year. Who are we kidding.
    This is the mentality which will destroy the future of our children and grandchildren.
    Yes, you can eat your bricks and mortar. Even accessing $30,000 per annum will leave net $120,000 growth.
    For everyone with a $3.0m house losing the aged pension, Government could then increase rental allowance by $223 per year for those unfortunate enough not to own their home.
    And please don't come back with that old excuse those without their home should have worked harder to do so. There are many older Australians out there who have worked hard, paid taxes, but have not been able to get into home ownership - particularly older women who have gone through bad relationships.
    Finally the aged pension is not an entitlement.
    niemakawa
    3rd Sep 2015
    7:19pm
    "Destroy the future of our children and grandchildren". Yes and many of whom will belong to the existing "losers" in our society. I think it is the mentality of this group, with "support" from some political parties and "advocates" who are destroying the way our system is meant to operate. Too many not prepared to work and give it a go, but at the same time whingeing that the Government is not providing enough (money) so they can live comfortably of the taxpayer.
    Mez
    3rd Sep 2015
    11:21pm
    Pensions after all are SUPPLEMENTARY INCOMES when one legitimately is unable to generate enough income.
    Homes ARE EXCLUDED but it only makes sense to DOWNSIZE as many do sensibly to avoid increasingly high council rates and maintainance and repair and cleaning costs as well as heating and cooling.
    Kids have grown up and left the nest or should have if not molly coddled and it is more sensible to sell and buy a smaller place before one becomes too disabled to do so.
    Besides, there is a shortage of housing in case you are unaware.
    Definitely, any pension then needs to be means tested and I mean, means tested!
    No one with exhorbitant extra assets other than a MODEST HOME ought to be receiving any pension at all!
    How much more fairer can that be!
    niemakawa
    3rd Sep 2015
    11:40pm
    Very unfair. All those of pension age should receive a basic pension, or at the very least access to the Health Card, regardless.
    TREBOR
    4th Sep 2015
    12:33am
    Pensions are a Right paid for out of income tax - the chicanery of putting the retirement fund into consolidated revenue doesn't work any more.....

    Get used to it.... get over it..

    Pay everyone the pension and treat everyone the same for income tax above that level.
    TREBOR
    4th Sep 2015
    12:34am
    I've already expressed my view that the Home should be excluded if it fits into the market value of the area in which it rests..... if you own a mansion worth $10m in an area where values are $740k - you have a problem, Houston.
    Not Amused
    4th Sep 2015
    8:10am
    Trebor, I agree that in addition to those who have been disadvantaged by problems not of their own making, everyone who has worked and paid a pre-determined qualifying amount of taxes should receive a basic pension.
    Say my house is worth $700,000. My neighbour's house is the same size and condition as mine, but it is worth $1M only because it has a magnificent, uninterrupted view. Are we saying this person would not qualify for a pension until he sells and realises the extra cash? It is likely that a beautiful view is a therapeutic health benefit. For him it wouldn't be a matter of downsizing or wanting to keep a home that he doesn't deserve. Area market value is dependent on many things. I doubt there would be many mansions valued at $10m in a $740K area but can see your point. It's possibly a rather extreme example. I think they should keep their hands off the family home - leave old people alone in their familiar environments - they will die soon enough. (Just my opinion.)
    don
    4th Sep 2015
    12:25am
    I worked with people young and old , and they rely on the pension paid by their employer and do not contribute anything from their pay towards retirement eg 5% of their pay, which if they did salary sacrifice , it would not cost them anything as they gain on less tax. I think everyone who has paid taxes is entitled to the pension, and not get chopped because the useless pollies waste it.Don.

    5th Sep 2015
    10:15am
    Honestly, reports like this confound me! Isn't it just basic common sense that if you structure a society such that the privileged are able to exploit the poor and use national resources without paying a fair price for them, and you permit battlers to be paid less than they need to finance a lifetime of reasonable comfort, you will have a community of paupers wanting government support in old age? We are over-indulging the wealthy, killing incentives for the working and lower middle class, and rewarding spendthrifts, cheats and manipulators with generous handouts, then wondering why we have a problem! The Government opted NOT to increase compulsory superannuation contributions. It opted NOT to tax filthy rich superannuants. It opted NOT to address corporate tax evasion by multi-nationals. Instead, it opted to destroy all incentives for saving and planning and harshly punish battlers who struggled to accumulate a nest egg for comfortable retirement. And now it wants to punish those who took the initiative to save for a home - along, of course, with fairly tackling the issue of immoral folk putting all their money into their home to get a bigger pension than they need.

    The system is a disaster and needs a clean sweep, but sadly the answers aren't easy. There is one fact that must be acknowledged, however, and should underscore all decisions. Folk who worked hard all their life and couldn't accumulate enough to be self-sufficient in retirement MUST be supported decently in old age. And that should NOT be achieved by unfair dealing with battlers who struggled, sacrificed and saved. The freedom to make spending choices and the incentive to work hard and save must be preserved, first and foremost. That includes preserving incentives to invest in a family home. In fact, we need to increase the incentive to buy a house and improve affordability. How about making interest on home loans and maintenance costs, rates, etc. tax deductible? And yes, young folk should be allowed to invest in a home in preference to accumulating in superannuation, provided there are sensible limits ensuring they are content with a modest home and a sensible balance.

    The family home shouldn't be included in the assets test, because the assets test should be abolished in favor of an income-only means test with deeming to prevent locking money into unproductive assets. The assets test is fundamentally unfair and often viciously cruel, causing hardship and even poverty. The idea that people should be punished for saving and rewarded for being a spendthrift is fundamentally flawed.

    5th Sep 2015
    10:15am
    Honestly, reports like this confound me! Isn't it just basic common sense that if you structure a society such that the privileged are able to exploit the poor and use national resources without paying a fair price for them, and you permit battlers to be paid less than they need to finance a lifetime of reasonable comfort, you will have a community of paupers wanting government support in old age? We are over-indulging the wealthy, killing incentives for the working and lower middle class, and rewarding spendthrifts, cheats and manipulators with generous handouts, then wondering why we have a problem! The Government opted NOT to increase compulsory superannuation contributions. It opted NOT to tax filthy rich superannuants. It opted NOT to address corporate tax evasion by multi-nationals. Instead, it opted to destroy all incentives for saving and planning and harshly punish battlers who struggled to accumulate a nest egg for comfortable retirement. And now it wants to punish those who took the initiative to save for a home - along, of course, with fairly tackling the issue of immoral folk putting all their money into their home to get a bigger pension than they need.

    The system is a disaster and needs a clean sweep, but sadly the answers aren't easy. There is one fact that must be acknowledged, however, and should underscore all decisions. Folk who worked hard all their life and couldn't accumulate enough to be self-sufficient in retirement MUST be supported decently in old age. And that should NOT be achieved by unfair dealing with battlers who struggled, sacrificed and saved. The freedom to make spending choices and the incentive to work hard and save must be preserved, first and foremost. That includes preserving incentives to invest in a family home. In fact, we need to increase the incentive to buy a house and improve affordability. How about making interest on home loans and maintenance costs, rates, etc. tax deductible? And yes, young folk should be allowed to invest in a home in preference to accumulating in superannuation, provided there are sensible limits ensuring they are content with a modest home and a sensible balance.

    The family home shouldn't be included in the assets test, because the assets test should be abolished in favor of an income-only means test with deeming to prevent locking money into unproductive assets. The assets test is fundamentally unfair and often viciously cruel, causing hardship and even poverty. The idea that people should be punished for saving and rewarded for being a spendthrift is fundamentally flawed.

    6th Sep 2015
    11:17pm
    So there's a disturbing trend to continued or even increased reliance on the aged pension to fund retirement... so we will respond to that by refusing to increase superannuation contributions, ending support for low income earners to contribute to super, refusing to address unfairly huge concessions to very high income earners and retirees with massive superannuation, but punishing battlers who save. We'll remove incentives to save for old age and remove incentives to buy and maintain a family home for security in old age.

    Honestly, how stupid can the so-called ''experts'' advising on policy get? Everything they do makes the problems worse because they are increasing incentives to cheat and manipulate; rewarding irresponsible behaviour and dishonesty, and hurting the honest people who struggle and sacrifice to try to contribute to the cost of their own retirement.

    Why on earth would anyone bother to provide for their own old age when doing so means they forfeit generous benefits that are given to those who spend up big in youth? Why sacrifice to buy a home if you are then going to have to reverse-mortgage it or sell it to survive old age and have nothing to leave to off-spring, while those who spend up big on overseas holidays, gambling, nice clothes, and extravagant entertainment have their retirement funded by the taxpayer, with generous rent assistance thrown in?

    Pensions for the needy only is a nice concept, but impossible to achieve. Currently, pensions are for the needy, the irresponsible, the spendthrifts, the successful manipulators, and the outright cheats. The only people who DON'T get pensions are those who worked hard and sacrificed luxuries to save, and who didn't have the good fortune to have generous superannuation. So the message is clear. If you aren't among the privileged, be among the irresponsible who live it up and then put their hand out. Struggling to save is a waste of time and effort. Naturally pension costs will increase while ever this is the message.


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