Is this fair? No wonder there is a crackdown!
This is the advertisement for the latest book on finances by investment advisor Nick Bruining. It was in today's paper here in WA.
Do people honestly think it is fair?
"DID YOU KNOW:
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You can have a $5 million house and still get every cent of the full age pension?
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You can have investment worth $1.17 million, and that’s not even including your house, and still get part of the age pension?
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You can get GP scripts for $6.20 instead of $40 even if you earn $80,000 a year?
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You can save up to $2,500 a year by making sure you qualify for government issued concession cards?"
It is definitely not fair for someone to own a very pricey home and then apply for the pension. A house may very well have sentimental value, but when that person dies, their estate goes to the family. We are therefore technically through our taxes paying for their kids' inheritance, that is not fair.
When the house is sold for the Estate the proceeds are taxed under Capital Gains. So if the house was very valuable the Estate could be contributing far far more than was ever given to the Pensioner.
NO capital gains is payable if you have lived in the (now) sold house for at least a year.
I can understand older people wanting to live in their own homes to be close to all they are familiar with. Might be an idea if upon their death the house is sold and the money they received in the form of pension be repaid to the govt. Since the house will be appreciating in value over the years anyway, there will still be enough to leave gifts for the kids.
You can get GP scripts for $6.20 instead of $40 even if you earn $80,000 a year?
Gee Radish how do I tell my Son about this?????????????????????????
I have worked that out, so don't have to BUY the book.
My Son is working so he would not be eligible for this $6.20 chemist -- he gets less than $80.000 and has to pay full price for his medical.
That is only for pensioners that are earning $80.000 per year via interest and have a $1 pension AND the health care card
PlanB your statement isn't quite factually correct. This is a benefit available to all Australians if they reach the relevant Safety Net value set by the Federal Government. Further it has no link to income whether from wages/salary or from investments. I however did make a mistake as to the age of children and instead of being 18 it is for children under 16 or Students up to 25 if they are substantially financially dependent on you.
In my comments in my previous post I noted that everyone who pays more than the Government set Safety Net value for their prescriptions in a year will be entitled to pay only $6.20 per script or if a concession card holder $0 for the rest of the year. See this link for current values and steps to take:
https://www.humanservices.gov.au/customer/services/medicare/pharmaceutical-benefits-scheme-pbs-safety-net
but for those who may not wish to visit the page I have copied most of it here (I had to alter the table but not the figures to adjust for the formatting):
"Safety Net thresholds
The thresholds are updated each year on 1 January. The following rates are for 2016.
Rates for 2016
General patients
Patient contribution: Up to $38.30 per script
Safety Net threshold: $1,475.70
When PBS Safety Net threshold is reached: $6.20
Concession card holders
Patient contribution: Up to $6.20
PBS Safety Net threshold: $372.00
When PBS Safety Net threshold is reached: Free
When you are close to reaching the PBS Safety Net threshold, ask your pharmacist about a PBS Safety Net card. With this card your PBS medicine is less expensive, or free, for the rest of the calendar year.
If you choose a more expensive brand of medicine, you may need to pay more. The extra amount will not count towards your PBS Safety Net threshold. Talk to your pharmacist if you are unsure.
If you go over the threshold before you get your PBS Safety Net card, you may get a refund. If this happens, ask your pharmacist for an official PBS refund receipt, not just a regular docket.
To get a refund:
download and complete a Patient claim for refund Pharmaceutical Benefits Scheme (PBS) formsubmit your completed form at a service centreor post it to the address on the form Recording your PBS medicines
You need to keep a record of your PBS medicines on a Prescription Record Form. This form is available from your pharmacist. This form helps you keep a record of all your PBS medicines so you know when you have reached the PBS Safety Net threshold.
If you go to the same pharmacist for all your PBS medicines, you can ask them to keep a computer record for you.
If you have a family, ask your pharmacist about combining the amounts for all eligible family members.
PBS Safety Net family
If you combine your family’s PBS amounts you might reach the PBS Safety Net threshold sooner. You can then get a PBS Safety Net card from your pharmacist.
A family comprises of:
a couple legally married and not separated, or a couple in a de facto relationship, with or without dependent children, ora single person with dependent children
A dependent child is someone under 16 years or a full time student under 25 years attending school, college or university, who you substantially support financially.
Non-PBS prescriptions
Your doctor may prescribe a medicine for your condition that is not listed or available on the PBS. This is sometimes called a private prescription. Your doctor will put this on your prescription and you will need to pay the full price for the medicine at the pharmacy. Non PBS prescriptions do not count towards your PBS Safety Net threshold.
PBS Safety Net 20 day rule
You should only get your PBS medicines supplied when you need them.
If you get PBS medicines within 20 days of your last prescription, it might not count towards your PBS Safety Net threshold.
If you do this, and you have already reached your threshold, you will have to pay your usual PBS contribution instead of the reduced PBS Safety Net amount.
This helps keep the PBS affordable for everyone."
Yes Gravy -- I get the free ones about the middle of Oct -- but I was thinking my Son who is working would be able to get his at the reduced amount re the statement
You can get GP scripts for $6.20 instead of $40 even if you earn $80,000 a year?
He gets nowhere near that amount -- but it was only for those on the pension with maybe a $1 pension and the health card.
BTW that has been made more this year and also the scripts USED to be $6.10 now $6.20 and the safety net is also raised -- AND more things have been taken OFF the PBS so this Government are slowly chipping away at the Medicare
PlanB buy the book LOL!!
Totally agree with you Banjo...taxpayers are funding the inheritance of children and that is why there are "some" who are paying the rates and all outgoings for their aged mother to stay in the home so she can get the pension because they know at the end of the day they will inherit.
However if it was $50million in cash no pension.
I firmly believe that eventually the family home will be assessed. There are already stirrings about this.
http://www.macrobusiness.com.au/2015/12/pc-bring-the-family-home-into-pension-assets-test/
WHAT BOOK ?
Think the book radish is refering to is
Don’t Panic is available at leading newsagents and book stores or can be ordered online at thewest.com.au/retirement
A person living in a $5 million house wouldn't have much fun on the pension but yes it's wrong that they are allowed to. There should be a cut-off price for the family home, anything over say $3 million knocks you out but no one will ever be brave enough to suggest it, the family home is still sacred and hopefully always will be.
I sure hope so Toot -- when one has worked long and hard and been in their home for many decades --it is sure to have risen in value -- it would need to with the amount it costs to up keep
If you live in say Sydney your house could be very valuable but if you sold it and tried to buy again in Sydney you may just be paying the same just to swap a house. That is why Governments are loath to use the house value as a criteria for the pension. If you move out of your house and enter another form of accommodation the value of the home will be assessed after a period of time. If you own a large parcel of land around your house this can and will be valued as an asset if it is over a set size (you only get a certain dimension which is considered to be part of the house).
Do we start saying because you are old and have a valuable house you must sell it and move to the back of beyond away from your family and friends because you happened to buy originally in a reasonably priced area? This may not occur to all but even if affects a reasonable amount of people I think this would be untenable.
There are a number of countries around the world where pensions are not means tested - I understand that the rationale is that these people paid tax all their lives and so should not be punished for having accumulated some wealth - sounds eminently reasonable to me. Most who are wealthy would spurn the pittance paid by the government in any case, so I fail to see why some are getting so upset over this - is any money coming out of YOUR pocket?
More money would be available for pensioners who are finding it tough if some of the anomolies were looked into and they will be eventually from what I have read.
By 2020 I bet there will be changes to the value of the family home which is allowable for those on the OAP.
Need to get me that book
Is it available on kindle ?
Live and let live I say. My grandma used to say "leave a little salt on the table" or was it bread? Can't remember, it's a Jewish proverb.
What's wrong with down-sizing wen you live in a very expensive home? You can sell and invest the profits instead of receiving a pension. The pension is NOT meant for the rich. They receive enough perks and benefits thoughout life.
The asset rules are NOT fair, in fact they stink to high heaven!
And then there are those who deliberately upscale their so called 'family home' in order to divest of assessable assets in order to reap the reward of a pension and the spin off benefits. This should NOT be allowed either.
Planning for retirement is fraught with danger. Governments insist on making changes every year, so that planning with any certainty is impossible. I sold my house, intending to move closer to my daughter, just months before the announcement was made to change the taper rate of the Asset test. Downsized in value for my new home, but costs are skyrocketing in Council rates, electricity charges, gas charges, all insurances, water rates, etc. AP is now minimal, and will lose it in January, and the only way to get some of the money from the house sale into super is now not going ahead because of the work test. I retired in 2006, the GFC hit soon after, interest rates are dismal, stock market not good, and if we get another drastic downturn, or recession, probably caused in part from LNP budget policy, then my income will be well below that of the aged pension. Spending capital reduces future income, so trying to maintain capital to pay for the very expensive Aged Care (which my children cannot afford to pay for me) makes voluntary euthanasia an option that is currently illegal. We treat animals better than humans in cases of catastrophic accidents or illness.
and our present government wants to reduce the already inadequate newstart allowance to those poor sods who cannot find work.
Your house could be worth 500 Million and you would still get the full Age Pension as long as your other assets did not go above the limit for a full Pension and even if they did as long as they were below the cut off value for a Pension you would still get a part pension. This seems an unfair benefit, but what if you bought your house for $30000 and just because some development occurs around you over the years your house is now worth $20 million should you be harrassed to sell when all your memories are linked to the house where you had and raised your children, maybe your spouse had died, and so on. In some cases this is a very real scenario and I am not sure how I could judge that person or couple. But certainly some effort needs to be made to stop what seem to be rorts.
If you are a self funded retiree and you have invested wisely and /or are still possibly working you may be able to achieve $80000 per year income. This doesn't preclude you from getting, if you have reached the age requirement, a Seniors Card which provides for cheap public transport fares, concessional script charges, reduction on Car rego, free glasses through the Public system, free hearing aids (up to a set value), free dental services through the public system, and a few other concessional fees based on what your State offers eg Reduced Rates, Reduced Electricity bills (generally a set figure per bill). So saving $2500 is quite possible and possibly even more. Some places even offer discounts for Seniors Card holders (and not always for Pension Card holders). If a person has contributed to Society and they meet the requirements for some concessions then I think this may be a fair return on their efforts.
Further to the cost of scripts, if you are a person, couple or family (with children under 18) who needs lots of scripts during the year there is a Medicare Safety Net that ensures once you have spent over a set amount per year the rest of your scripts (unless they are not PBS listed) will be at the reduced rate for the rest of the year and this will be regardless of your income level. If you have a concession card the cost of scripts will be nil once you reach the Safety Net value. This Safety Net exists for all regardless of income and assets and is part of the benefit for the Medicare Levy.
So is it all fair? Well I think it depends on the circumstances (there are rules to judge this) and if you fit the rules then you fit them. If the rules are unfair then contact your politicians (local, state and federal) and complain, get involved with and create petitions, go to public meetings, put comments in newspapers and make sure you vote when elections come up based on the way your elected officals have responded to your complaints and concerns and not on Party Lines.