Key changes urged to Age Pension means test

The Federal Government should consider imposing a dollar cap on the value of the family home that is exempt from the Age Pension means test, according to the Institute of Actuaries of Australia.

The institute has used a pre-Budge submission has urged the move as part of a broader review of the Age Pension means tests to improve fairness in the system between homeowners and non-homeowners.

The submission said it was notable that 95 per cent of homeowner couples were projected to be on retirement incomes of at least the Association of Superannuation Funds of Australia modest level, compared to only 28 per cent of renting couples.

Related News:

It said single female private renters were projected to have the lowest levels of retirement income adequacy, with only 23 per cent expected to achieve the ASFA modest level, compared to 35 per cent for single male renters.

“Actual rental payments are significantly higher than the level of Centrelink rental assistance, with the maximum Centrelink rent assistance being $136 per fortnight for a single renter living alone whereas the median rent is closer to $400 a fortnight,” the submission said.

The submission said CEPAR research indicated that Commonwealth rental assistance had fallen as a per centage of average rental payments since 2001 and that the institute was therefore recommending that Commonwealth rental assistance be increased by 40 per cent to provide more meaningful support for recipients.

 




Related Content

Perth accountant jailed for tax fraud

Perth-based accountant, Shane Read, has been sentenced in the Perth District Court to four years’ jail for tax fraud, after he was convicted of obta...Read more

Key changes urged to Age Pension means test

The Federal Government should consider imposing a dollar cap on the value of the family home that is exempt from the Age Pension means test, according...Read more

Foster Stockbroking director banned

The Australian Securities and Investments Commission (ASIC) has banned director of Foster Stockbroking (FSB), Mark Joseph Hinsley, from providing fina...Read more

Author

Comments

Comments

So what if home owners have saved and have a better income than renters. Is that a reason to penalize them? rather they should be rewarded for not being a cost to the nation.

But they ARE a cost to the nation if they put their hand out for welfare they don't need. Under the current system the working poor are paying taxes to fund age pension handouts to old people who live in multi million dollar homes and have hundreds of thousands in liquid assets. It is a gross inequity. The age pension is not an "entitlement" for getting old. It is supposed to be a welfare safety net for the poor, just like NewStart. But it has somehow been transformed into a massive rort.

And let's not be fooled by that old furphy about cash poor, asset rich, old people being forced to leave their homes. Many of them would actually love to downsize from their cavernous, isolated home but are pressured to stay there by adult children angling to maximise the value of their tax free inheritance. For those that do want to stay put and don't have large liquid assets, it's possible to draw a comfortable income from their home equity via the government run Pension Loans Scheme. There is absolutely no need for working Australians' taxes to be used as a handout for rich old people.

Australia truly is going down the path of becoming a Socialist State..........

Don't save money. Spend your money during your working life. Then later you will be OK for the Age Pension and associated handouts. Don't insure your house and contents because when you suffer a fire or flood or storm the community and Government will give you hand outs. If you get sick rely on medicare. If you are out of work get the dole.
Yes the modern cargo cult is alive and well in Australia.
Just penalize those who work hard and save. Everyone should have the same standard of living. No more rewards for the thrifty, the hard working, the diligent, the TAX PAYERS!
We need Communism .
When do we need it?
NOW!

Yes but as George Orwell said in his book The Road to Wigan Pier. "Socialists don't like the poor they hate the rich". He hit the nail on the head with that observation. Socialists are elitists who do not have the ability to climb the hierarchy of competence system in a free market economy so they aim to destroy the hierarchies of competence and replace them with a hierarchy thuggery and tyranny. This is all achieved by implementing draconian legislation under the guise of victimism, self appointed morale superiority and virtue signalling. Communism/socialism has killed something like 160 million people and that number is increasing due to North Korea and Venezuela. It is the most murderous ideology ever developed by man, but, the politics of jealousy is rising again.

Isn't it more 'socialist' to have taxpayers earning $50,000pa in wages funding the lifestyles of an Age Pensioner living in a $2m house and with $700k in assets?

You could be totally "fair" and not have anyone get a free handout. Unfortunately this would not work well. But I would suggest that anyone wtih a $2m house and $700,000 in assets has done some hard work to get the assets, and paid more tax as a result of this. So I don't know if the person earning $50,000 is really subsidizing them at all. Also the age pension for a person in your example would be nil since the cut out for the age pension is less than $700,000. So is the tax payer really subsidizing the person who was done well?

What you should do is impose a federal property tax because anyone who owns a home has only achieved that by taking advantage of the less fortunate in society (victims). Therefore home owners need to pay economic rent to those unfortunate people who didn't save and are therefore oppressed by the rich (virtue signalling). I believe that socialism is the way to fix the inequality in our society. We need equal outcome for everyone. Therefore the power to implement and enforce a federal based property wealth tax should be given to people like me or Hedwear because we am pure at heart and know what is best for everyone (self appointed moral superiority). That is socialism Brendon and Australia is heading in that direction.

I have no real issue with this as I see it as a "City" issue. If you have greater than 5 acres, you already have a CentreLink issue. Yes, I can hear you now saying who needs all that land blah blah blah, but the same can be said for ANYONE living in our Cities. Perhaps a $ value limit would be a better ceiling rather than the 5 acre limit already imposed or no limit for all.

As long as the limit is a reasonable level and only the amount above is assessed (without deeming) then this would be fair. For example $1,000,000 + for a single, or $1,500,000 + for a couple and with some (but not total) regional bias (e.g. Sydney has higher values) We shouldn't be funding age pension for people who have these levels of assets and also have savings at the normal means test levels. There should also be a long lead time so people can plan, e.g. at least 5 years.

I have limited issues with this, I don't see why people who have the 'right' assets should get pensions yet those who may have chosen to rent, spent time abroad or opt to live on the damned wallaby in a caravan ought to be punished. Taper it in from $500,000 or perhaps base it on the % above the median house price your home is, if you're under the median you get more and if you're well over it then you get SFA.

Add new comment