moojar

Possible changes to the ATO (not Centrelink) residency definition in the wind.  May be of interest to some, particularly those with Australian income / investments. 

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The Turnbull government has been urged by its own tax advisory board to take a new approach to determining residency by throwing out most other complicated tests and instead basing it on a more simple “days count” test where a person is present in Australia for 183 days or more in a 12-month period.

https://www.smh.com.au/business/the-economy/jet-setting-execs-may-face-major-changes-to-residency-tax-laws-20180709-p4zqh1.html

The article goes on to discuss different potential rules for different types of residents, all goes a bit over my head - 'outbound individuals', 'former residents', 'never been resident'.  

^ 

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Mr Morrison said the federal government intends to change the definition of superannuation in law next year, to better enshrine the idea a self-funded retirement was a "worthy prize".

Ah <deleted>, here it comes.  

And I wonder how long before they jack the preservation age up to be closer to the pension age.    

Hi 4MyEgo,

I'm glad you asked, coz I thought the under-60 limit was a total of $180k tax free, but it's actually $200k according to ASIC:

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Lump sum withdrawals

If you are aged 60 or over, any withdrawals from a taxed super fund are tax-free. Different rates may apply to untaxed funds, such as government super funds.

If you access your super before age 60 you may pay tax on withdrawals. You can withdraw up to the low rate threshold, currently $200,000, tax-free. This is a lifetime limit and is indexed annually. The threshold does not include the tax-free portion of your super account, which will be returned to you tax-free. Any amounts over the low rate threshold will be taxed at 17% (including Medicare Levy) or your marginal tax rate, whichever is lower.

https://www.moneysmart.gov.au/superannuation-and-retirement/how-super-works/tax-and-super

Preservation age is currently being increased to 60.  It's 56 or 57 at the moment, and will be 60 by 2024 (?).

Birthday / Preservation age

Before 1 July 1960 - 55    

1 July 1960 – 30 June 1961 - 56

1 July 1961 – 30 June 1962 - 57

1 July 1962 – 30 June 1963 - 58

1 July 1963 – 30 June 1964 - 59

From 1 July 1964 - 60

https://www.ato.gov.au/individuals/super/accessing-your-super/

If you were born on 1 July 1964 you'd be turning ... 54 next week, so you'd currently be six years away from your preservation age (60).  I tried to figure out what the current preservation age is and what it will be in eight days time (on 1 July), but it just made my head hurt.  

On 6/20/2018 at 2:32 PM, SplitInfinitive said:

Fool!

They have special technology now that penetrates our tinfoil hats with ease!

 

?

Funny, yes.  I don't think David meant this site, but you'd be a bit naive to think CL do not check your social media profile, especially if they have doubts about what you are telling them.  It's not just all their tea breaks and flexi-time long weekends that causes the weeks of delay between application and decision.  ?  

Wasn't there someone from CL International posting in this thread a few years ago?  (Sorry about the flexi-time jibe guys, you know how it is!  ? )  

But seriously, trying to pretend you're not married and don't actually reside in Thailand, yet there's your suntanned self with child-bride and Phuket villa plastered all over Facebook?  Good luck with that.   

I'm late to the thread... 

I spend time in Buriram province - four months this year.  And earlier this year a 14 yr old girl died of rabies in the province, apparently contracted from her pet dog's saliva.  So back in Australia I looked into rabies vaccination, and it's bloody expensive - something like $500 or $600 (B13K or so) for the course of shots.  That may be because Australia does not have rabies, not so many people are asking to be vaccinated.  

Anyway, I decided due to cost I'll take the risk - get shots in Thailand if I were to be bitten.  And dogs there are more aggressive than in western countries I find, so there's a fair chance of a bite one day.    

Once you have rabies it's a death sentence.  

That's one of those sadly amateur social media manipulation attempts both parties engage in - couldn't the Russians teach them a thing or two!  I get the ALP ones in my inbox due to my former union membership. 

Besides, it was the Abbott / Hockey toxic 'lifters and leaners' 2014 budget that introduced the measure.  The Libs haven't managed to get the OAP age increase thru the senate yet, but it's still sitting there waiting it's chance.  It will happen when they get the numbers.  Turnbull is hamstrung by his internal party politics and the need to appease the loony right faction, couldn't dump the policy if he wanted to.    

^ Yes, resident.  Sell upon retirement scenario. 

No way I would hold on to an investment property once I am ATO non-resident.  As you say, minimum 32.5% tax right off the bat.  A resident with a taxable income of $20K would pay sweet FA in tax, a few hundred perhaps.  A non-resident would pay close to $7000.  And then be denied an OAP when the time comes due to his non-residence.  Bugger that for a joke. 

^ You know, the situation the OP described is one of the reasons getting the OAP is becoming more difficult.  People taking early retirement - like the OP and a lot of us here - and living off their Super, then fronting up for an OAP when they reach "retirement age".  

Compulsory Superannuation was meant to take the pressure off the OAP, not allow us to retire early.  So they are beating us around the head for being too clever.  

The Super 'preservation age' is currently being incrementally increased from 55 to 60 depending on you DOB.  You can bet that that will be further increased in the future.

https://www.ato.gov.au/Individuals/Super/Accessing-your-super/

12 hours ago, giddyup said:

I think the portability is what's being discussed here, that's why I mentioned the 2 year rule.

Agreed.  It was the "My application was rejected on the grounds you need to have lived in Australia for 10years" that threw me.  I thought at first he was referring to the recent change:

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To get Age Pension you need to have been an Australian resident for at least 10 years in total. For at least 5 of these years, there must be no break in your residence.

https://www.humanservices.gov.au/individuals/services/centrelink/age-pension/eligibility-payment-rates/residence-rules

That 'no break in your residence' seems like one of those phrases that lawyers could argue about for hours.  

But no, the OP was referring to having been out of Oz for 10 years.  He could get the OAP immediately if he returned to stay, as we know. 

I do have sympathy though re other expats - theirs is a 'pension' whereas ours is treated as 'welfare'.  Seems like a "mean and tricky" distinction, brought about by too many tabloid newspaper / current affairs TV show exposés.   

^ The Sunday Tele letter is, I believe, referring to the planned removal of "cash payments for unused franking credits".  This is one of those Howard-era mining-boom-drunk-with-revenue crazy generous changes that we can no longer afford - if you pay no tax, you get given cash (tax return) for franking credit tax deductions you could have made if you were paying tax.  i.e., you have no taxable income, the tax department sends you a cheque.  Self managed super funds (SMSFs) and the wealthy benefit from it.  It was a gift from Howard to his heartland, and Labor will cop the flack to remove it - so that they can no doubt throw some benefits at their heartland.   

Labor have partly backed down on it btw -  http://www.afr.com/news/labor-spares-300000-pensioners-in-33b-policy-backdown-20180325-h0xy8t

It is Labor planning to remove another overly-generous Howard gift that will hurt more IMO - reduction in the Capital Gains Tax (CGT) discount on investment properties.  That and the removal of negative gearing on property.  They say they will "grandfather" existing investors, but it is still going to impact property prices for those that have investment property/s as their "retirement nest egg".    

2 hours ago, David Walden said:

Further to my above ravings, it appears by 100 weeks to go you are 63.5 y/o and married to a Thai Lady.  If you return to Aus to confirm your 2 residency you may well to ask to see a Centrelink Social Adviser and ask that some flexibility be applied to your situation as you are married to a Thai living in Thailand.  You should insist that being away from your wife and family would place great strain on your relationship and may likely to fail as a result. (lay it on thick). Social Workers with Centrelink can make recommendations which may allow you to spend much of your qualifying time in Thailand  and long holidays after granting of the pension, and satisfy the residency requirements. Centrelink Social Advisers under circumstances like this are rarely ignored by Centrelink Staff when considering your application.  This situation is quite common with Centrelink applicants and usually turn out for the better.  The marriage is saved.

 

If you are legally married to Thai and all goes well for you when granted the pension, you will only get half the married rate and lose most of the pension supplement.  This is still OK around 340 p/w, this together with your $600 super payment could put you on clover in Thailand.  If for this unlikely situation you and your wife separate down the road.  You will receive the full pension rate less the supplement of about $425 P/W and keep all your super if your assets are under $456,750 and no house...happy days.  

Hi David,

Thanks for that.  But no, I'm only in my mid fifties - trying to plan ahead but the goal posts keep shifting on me.  I'm in IT, a young man's game and one severely impacted by the 457 visa rorts. I will take early retirement around the time I reach Super preservation age, if I don't get retrenched first. 

My wife and I have been married for over 25 years, married here in Oz then a village wedding with her family.  Yep, good woman, a keeper.  ?   So there's no hiding that marriage from C/L!  ?

My wife has been a citizen for over 20 years now, we will apply for OAP as a couple - there are only one and a half years difference in our ages, but because of where our birthdays fall we will reach pension age two years apart, if the proposed raising of the age to 70 goes ahead.  That's a bit of a nuisance, I guess one of us must go on the dole for two years before reaching OAP age while the other is serving their two years portability period.  PITA.

Thanks for the tip re Centrelink Social Advisors, I'd not heard of them before.  My wife's grandmother lived until her mid-90s, every chance her mother will do the same.  Which would tie in nicely with what you suggest re laying it on thick.  Would not have to pretend either, my wife is the eldest child and that comes with great responsibility within a Thai family.   She is feeling that pressure as her mother ages. 

I read in a forum post once something along the lines of "my wife has lived in my country all of our married life, I will take her home to her country to live out our retirement years".   I found that quite touching, and appropriate.  

Cheers.

18 hours ago, giddyup said:

I've been retired more than 10 years, can't add any money to my indexed super now.  My income in Thai Baht is around 24,000, or A$600 per week, we (my Thai lady and I) live very comfortably on that, with money actually accruing in my Aussie bank account. I buy whatever kind of food I want, enjoy a couple of bottles of red a month, new TV if I need one, run a late model pickup, own our own house etc. The only thing that could knock a hole in my income/assets would be a serious illness as I have no health cover, because of prohibitive premiums at my age.

Thanks for that, my budget might be a little light on then.  I would have been in Thailand for 10 years by the time I reach OAP age, so might be ready by then to spend a couple of years back in Oz to qualify for portability.  

I thought due to rule changes you may now be able to open a new Super account in a different fund, but I was wrong - it is more restrictive than I realised:  

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Retirees aged between 65 and 74 with a superannuation balance below $300,000 will be allowed to make voluntary super contributions for the first year that they no longer meet the work test requirements. 

 - Got that from: https://www.industrysuper.com/understand-super/super-changes/proposed-changes/

1 hour ago, giddyup said:

When I retired I opted to take the indexed pension (Comsuper) rather than a lump sum, but what annoys me is that C'link deems interest on money in the bank at 3.5% when the best I can get is 2.5%.

Not trying to give financial advice, I am certainly not qualified, but can't you put the cash into a Super account?  That might circumvent some of the C/L assets test / avoid some tax, and you can still invest cash in term deposits within the fund - you can in my (industry) fund at least.  

And to be even more nosy ?, if my math is correct your budget is in the 60K - 70K baht per month range.  How comfortably can you live on that?  Run a car, travel a bit, enjoy western foods sometimes, alcohol, ...?   Reason I ask is that's the ballpark figure I'm looking at, assuming we will never get an OAP.  That budget is for two of us, but we already own a new pickup and have built a small house on Issan land we (she) own.  As we approach our early retirement day though - under 100 weeks to go now - I'm getting nervous.  We don't have an extravagant lifestyle by any stretch, but the thought of counting pennies gives me nightmares.  AUD falling, Baht rising, and property market in free-fall = not helping.  ?

16 hours ago, keithpa said:

" does not allow short stints working overseas, or even holidays.    "  Dont be ridiculous.

You're a bit of a charmer aren't you mate. 

In speaking with Centrelink International regarding our future plans, they did mention that the two or three periods of several months my (citizen) wife has spent in Thailand over the years will not count towards her 35 years of 'working life residence'.  Make of that what you will. 

Current requirements state:

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To get Age Pension you need to have been an Australian resident for at least 10 years in total. For at least 5 of these years, there must be no break in your residence.

(Italics are mine)

https://www.humanservices.gov.au/individuals/enablers/residence-rules-age-pension

So, what does 'continuous' mean?  It's the same old question we keep coming back to really, regarding Centrelink's residency rules.  The answer:  FIIK. - Defintion #3 in my case.    

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From 1 July 2018, to receive Age Pension or Disability Support Pension (DSP), a person will need to have:

• 10 continuous years of Australian residence including at least five years during their Australian working life, or
• 10 continuous years of Australian residence and proof they have not received activity tested income support for cumulative periods of five years or more, or
• 15 years of continuous Australian residence.

Residence during a person’s working life is the number of years a person has resided (lived permanently) in Australia between age 16 and age pension age.

It's one of those populist (read 'appeasing Pauline Hanson voters') measures to been seen to crack down on migrant rorts - get a male family member on a "refugee" boat, he gets the entire family in down the track via 'family reunion' provisions.  Many of whom go straight onto welfare. Same goes for regular migrants that bring their entire family over, including Granny - hello China!   

How does it affect us?  Those with Oz Citizen Thai wives that have never spent much time in Australia might be impacted.  Same with Kiwis etc. who treat the place as their own backyard.  Otherwise cannot see much to worry most of us - unless that "10 continuous years" does not allow short stints working overseas, or even holidays.   

2 minutes ago, superglue said:

And if you do not maintain residency according to their interpretation?

Then it's time for Plan B or Plan C.  Two years onshore post-OAP, or no OAP.  

Talk to Centrelink International.  They know more than people like me on an Internet forum do. 

3 hours ago, Gregster said:

Fantastic advice moojar...Many thanks !

 

What about if you go back 2 years BEFORE retirement age...do you think all of the above would still apply? In particular convincing Centrelink you’re here to stay.

 

Yes, my understanding is if you are resident when you reach OAP age then it's no questions asked - you have portability.  IF two years solid in the country will reestablish residency - you'd think it would have to eh?  But give Centrelink International a call to discuss, they seem to be pretty decent people.  Number is on the C/L website somewhere, and they have an international reverse-charges service from memory. 

'Maintaining residency' is a major focus of this thread, with more opinions than you can poke a stick at!  

^ Other analysts say it's heading for the mid-60s against the USD.  Might as well see a fortune teller.  

All I know is the AUD has not been as low as it currently is against the THB since 2009, just after the GFC.  Ouch.  

The sticking point with these "refugees" is, they cross many countries to get to us.  And love their govt handouts / welfare when they get here.  

Common refugee route was fly to Malaysia - yes, fly - then overland / ferry etc. to Indonesia.  People smugglers had a thriving business sending them in leaky boats from Indonesia to Australia's nearest territory.

Our govt is being cruel to this batch, but the pipeline has dried up.  It's about sending a message.  

We take our fair share of refugees, taken from UN refugee camps.  These interlopers were taking the places of legitimate refugees.  And it's nearly always all men - who then send for their extended family once accepted.    

2 hours ago, Scott said:

If they get NZ citizenship, will they have free access to Australia?

 

Yes. 

When I worked in KL we used to go to a sort of outdoor restaurant for lunch we called "fried rice" - that was all they did, and it was bloody good.  

Then one Friday there's this big rat in a spring box trap out in the sun - I guess they left it there to die in the heat.  

I had to wonder after that what they did with the carcasses, and what was the secret taste-so-good ingredient in the fried rice?

I took my wife back home when we first married, 26 years ago.  The other Thai women back then were mostly ex-bar girls ("whores!" in my wife's words), and they just assumed my wife was too.  So she got to hear all their dastardly schemes.  

The basic premise for the ex-BGs was 'get permanent residency with the one that brought me here, then ditch him ASAP for one younger / wealthier / bigger dick'.  

4 hours ago, Lizard2010 said:

A single Australian living in Thailand

Is a Long Stay Tourist

We have No Residency Here

As per the Tourist Minister at a Long Stay Tourist Seminar In Chiang Mai

The Minister is in control of Xpats

So our country can not say we are a resident of Thailand

As we only have A Visa then a Visa Extension to live here

 

One of the cases I was reading addressed that.  Basically C/L are not saying you are a resident of Thailand, they are saying you are residing in Thailand.  Subtle difference.  You are not a resident of Australia because you are residing somewhere else.  You can be overseas for an extended period but still be resident of Australia - you have to keep moving, and have a set return plan. 

I'll see if I can dig out the case in the next day or so.  

This one is of some interest - not for you specifically @lizard2010, but generally: 

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/AATA/2017/1545.html

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CATCHWORDS

SOCIAL SECURITY – suspension of payment – whether ceased to be an Australian resident – whether payment portable in circumstances of short residence – resuming residence in Australia – incorrect advice – Scheme for Compensation for Detriment caused by Defective Administration – decision under review affirmed

Again it's a cut and dried case - the guy was his own worst enemy.  But whomever wrote the report doesn't agree with C/L's (called 'the respondent') interpretations.  Too much to paste here, paragraphs 90-odd on are interesting.  These are paragraphs 103 & 104: 

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• The representative for the Respondent [Centrelink] submitted that unfortunately a person effectively has to stay for a full two year period, unless the Department gives him or her permission to go overseas (and that could be for anything as simple as going to New Zealand, in Mr Armstrong’s case for a wedding), and there is provision for the Department to do that. Otherwise, the Respondent says, unfortunately a person has to be here in Australia for two years without interruption before he or she gets the unlimited portability.
• Now, that is not quite how I read it. It would seem that in a situation like that, that could certainly prevent someone from going overseas for two years, but would have the effect of preventing people from going for milestones in relatives’ lives, weddings, death of a loved one, like a father or a mother overseas, all those unintended consequences, where people would may well be prepared to go overseas for a few weeks, not receive the Age Pension whilst they are overseas, but pick it up again after they return and not have the two year period start all over again. I find it hard to think this would have been the intent of the legislature.

Dated '18 August 2017', so this is the current thinking.