Warning: Losing Portability of your Australian Pension

[Adumbration]

There is this long held view that if and expat is living here long term on the pension he can just fly back to the home country and use the medical system there.  In fact I saw an some Aussie guy on his youtube channel suggest just that the other day.

 

I read something very interesting in the fine print of the Australia Social Security Act last night.

 

It states if you have advised Centerlink that you have moved permanently overseas, but then return to enter back into the system to be eligible for Medicare, you would then be subjected to another 2 year waiting period before your pension is again portable.

 

I don't know whether or not this also applies to the UK or other countries in Farangland.

 

So for those thinking that their emergency rip cord is heading back to Oz for treatment, take note that will sentence you to at least another two years on prison island.

[Will27]

Are you suggesting that people here on the OAP will lose their portability if they go back to Australia for whatever reason or just to claim Medicare??

 

Or have I misunderstood your post?

 

I know there's certain rules for Medicare eligibility but I'm pretty sure they're

separate to the OAP.

 

I can't imagine someone going back to Oz for a holiday and visiting a GP would mean losing their portability.

 

Perhaps you can post a link or paste your information.

Edited November 2, 2021 by Will27

[Adumbration]

5 minutes ago, Will27 said:

Are you suggesting that people here on the OAP will lose their portability if they go back to Australia?

 

Or have I misunderstood your post?

I am not suggesting.  It is written in the legislation.  If you have moved permanently overseas and then need to go back for medical care under medicare you will then have to endure another 2 year waiting period before your pension is portable again.

[Pravda]

It's been like this in Canada since forever, depending on province. I always wondered why it was different for Australians and Brits. Apparently it's not.

[Will27]

6 minutes ago, Adumbration said:

I am not suggesting.  It is written in the legislation.  If you have moved permanently overseas and then need to go back for medical care under medicare you will then have to endure another 2 year waiting period before your pension is portable again.

When you say "medical care under Medicare", does that include a visit to a GP?

If that's the case, I don't believe it.

 

Again, it would be handy if you could post a link.

[sceadugenga]

25 minutes ago, Adumbration said:

I am not suggesting.  It is written in the legislation.  If you have moved permanently overseas and then need to go back for medical care under medicare you will then have to endure another 2 year waiting period before your pension is portable again.

Link?

[Adumbration]

Here is the link:

 

https://www.mlc.com.au/content/dam/mlcsecure/adviser/technical/pdf/age-pension-qualification-and-portability.pdf

 

If a person who has returned after an absence departs Australia within two years of becoming an Australian resident again, the autonomous pension is not payable outside of Australia (ie the general portability rules will not apply)20 .

 

So if you are overseas permanently and have lost your medicare card.  Then go back to Australia for treatment (and thus have to get new medicare card) you would then be sentenced to another 2 years wait before before your pension is portable again.

[sceadugenga]

That's not a link to the legislation or the Social Security Act.

 

[Will27]

6 hours ago, Adumbration said:

I am not suggesting.  It is written in the legislation.  If you have moved permanently overseas and then need to go back for medical care under medicare you will then have to endure another 2 year waiting period before your pension is portable again.

I have a different interpretation of that than you have.

[LosLobo]

My interpretation of what the OP is trying to say...

 

If you return to Australia after five years absence you are illegible for Medicare and should re-enroll. To be able to re-enroll you must prove residency. 

 

If you prove residency you must then be a returning resident which then may reset your pension portability and you may need to wait two years to regain portability.

 

Indefinite Portability of Pensions and Former Residents

 

"You should note that even if you return to Australia and “resume residing” after receiving Age Pension overseas for years, there is a risk that these provisions could prevent you from being paid outside Australia again. Centrelink may take the view that you have “resumed residing” in Australia and you would have to continue “residing” in Australia for 2 years before having indefinite portability of your payment. However, if you can show that you only returned to Australia for a visit and never intended to permanently return then the rules would not apply to you."

 

BRQ-IndefinitePortabilityandFormerResidents-BRQ2016.pdf

Edited November 8, 2021 by LosLobo

[Adumbration]

1 hour ago, LosLobo said:

My interpretation of what the OP is trying to say...

 

If you return to Australia after five years absence you are illegible for Medicare and should re-enroll. To be able to re-enroll you must prove residency. 

 

If you prove residency you must then be a returning resident which then may reset your pension portability and you may need to wait two years to regain portability.

 

Indefinite Portability of Pensions and Former Residents

 

"You should note that even if you return to Australia and “resume residing” after receiving Age Pension overseas for years, there is a risk that these provisions could prevent you from being paid outside Australia again. Centrelink may take the view that you have “resumed residing” in Australia and you would have to continue “residing” in Australia for 2 years before having indefinite portability of your payment. However, if you can show that you only returned to Australia for a visit and never intended to permanently return then the rules would not apply to you."

 

BRQ-IndefinitePortabilityandFormerResidents-BRQ2016.pdf

Yes that is the situation in a nutshell.  And it dispels the bar stool myth that if you are very sick you can just hop back to Australia for treatment.

[ozfarang]

If you maintain an Australian address with Medicare and have an Australian bank account and pay Australian health insurance you can use Medicare services whenever you are in Australia and your Medicare card is not cancelled under these circumstances.

This is provided you have not officially told Services Australia you are leaving Australia permanently to live overseas and maintain ties with Australia.

I have been living overseas for over 5 years but make return trips every 6 to 8 months for 6 to 8 weeks (Covid has disrupted this over the last 2 years) and I continue to use Medicare services and they send me my new Medicare card when the old one expires. New card arrived this month valid to 09/2026

 

The links on this thread are not offical, only rely on Services Australia links for the rules regarding government regulations for Medicare

 

Edited December 8, 2021 by ozfarang

[KhunHeineken]

I do similar to ozfarang.

 

I maintain a "domicile" (house - property) in Australia to get around the 180 days outside of the country rule for non resident for taxation purposes.

 

I visit Australia once a year and have a free annual medical check up on Medicare to remain active in the Medicare system.  

 

My tax agent submits a small return for me every year to remain active on the tax system.  

 

I NEVER EVER NEVER tick the box on the airport depart card that says Australian Leaving Permanently. 

 

As far as the Australian government is concerned, I just have a long overseas holiday every year, but still call Australia home.  

 

The big problem will come, and I am sure it's only a matter of time before it does come, is when the Australia government changes the law to no longer have any exemptions to the 180 days outside of Australia rule.  That will mean, any Australian citizen outside of Australia for more than 180 days a year will automatically be deemed a non resident for taxation purposes.  At something like $0.49 in the dollar, from dollar number one, no sliding scale, it will net the Australian government big money.    

 

When that time comes, I will either have to stay in Australia for 180 days every year, or sell up and ship out, completely, moving all funds offshore, most likely to a Singapore bank account, and leave nothing in Australia than can be taxed.  I will just have an Australian passport, driver's license, sim card, bank account with $10 in it, and a Visa or Mastercard credit card or debit card. 

 

There's a lot of conflicting information about residency status among expats in Thailand, but I know one thing is for sure, you do not want to be deemed a

non resident for taxation purposes, but I can see the day when the Australian government will chase money from everyone outside Australia for more than a legitimate holiday length of time.   

[Will27]

12 minutes ago, KhunHeineken said:

I do similar to ozfarang.

 

I maintain a "domicile" (house - property) in Australia to get around the 180 days outside of the country rule for non resident for taxation purposes.

 

I visit Australia once a year and have a free annual medical check up on Medicare to remain active in the Medicare system.  

 

My tax agent submits a small return for me every year to remain active on the tax system.  

 

I NEVER EVER NEVER tick the box on the airport depart card that says Australian Leaving Permanently. 

 

As far as the Australian government is concerned, I just have a long overseas holiday every year, but still call Australia home.  

 

The big problem will come, and I am sure it's only a matter of time before it does come, is when the Australia government changes the law to no longer have any exemptions to the 180 days outside of Australia rule.  That will mean, any Australian citizen outside of Australia for more than 180 days a year will automatically be deemed a non resident for taxation purposes.  At something like $0.49 in the dollar, from dollar number one, no sliding scale, it will net the Australian government big money.    

 

When that time comes, I will either have to stay in Australia for 180 days every year, or sell up and ship out, completely, moving all funds offshore, most likely to a Singapore bank account, and leave nothing in Australia than can be taxed.  I will just have an Australian passport, driver's license, sim card, bank account with $10 in it, and a Visa or Mastercard credit card or debit card. 

 

There's a lot of conflicting information about residency status among expats in Thailand, but I know one thing is for sure, you do not want to be deemed a

non resident for taxation purposes, but I can see the day when the Australian government will chase money from everyone outside Australia for more than a legitimate holiday length of time.   

The "180 day" rule is a guide only.

A whole range of things are taken into account.

 

You can be pretty sure that IF you were audited, you would be classed as a non-resident.

 

Anyway, residency versus non-residency has been done to death.

Best to try and fly under the radar.

[KhunHeineken]

On 12/21/2021 at 12:32 PM, Will27 said:

The "180 day" rule is a guide only.

A whole range of things are taken into account.

 

You can be pretty sure that IF you were audited, you would be classed as a non-resident.

 

Anyway, residency versus non-residency has been done to death.

Best to try and fly under the radar.

The 180 day rule is more than a guide.  It is one of the criteria relied upon at law for the determination of an individual's residency status for tax purposes.

 

I travel a lot whilst outside of Australia.  I attend motor racing events in Malaysia and Singapore, and follow various festivals, concerts, sporting events etc in different countries.  I also visit friends in different countries around South East Asia. 

 

I make sure I have, and keep, a record of all travel.  

 

I think I could mount a good defense, should the ATO deem me a non resident, but I do agree, there's a chance I may not be successful. 

 

For those that remain in one location in Thailand, without maintaining a domicile in Australia, and ties to it, like utility bills etc, I think there would be little they could offer by way of a defense.  

 

Yes, residency has been done to death, and everyone has their own information they are relying on, and a system that is working for them.   I am not saying my system is the best.  I am more than happy to listen to what has been working for others.

 

I have no doubt that the Australian government will be chasing every dollar they can in the future, and immigration data bases showing citizens outside of Australia for 180 days is an easy target, and difficult to fly under the radar with.   

 

I would suggest all Aussies expats get their ducks in a row, because it's only a matter of time before we are all contacted by the ATO for a "please explain."  

Edited December 30, 2021 by KhunHeineken

[Will27]

3 minutes ago, KhunHeineken said:

The 180 day rule is more than a guide.  It is one of the criteria relied upon at law for the determination of an individual's residency status for tax purposes.

 

I travel a lot whilst outside of Australia.  I attend motor racing events in Malaysia and Singapore, and follow various festivals, concerts, sporting events etc in different countries.  I also visit friends in different countries around South East Asia. 

 

I make sure I have, and keep, a record of all travel.  

 

I think I could mount a good defense, should the ATO deem me a non resident, but I do agree, there's a chance I my not be successful. 

 

For those that remain in one location in Thailand, without maintaining a domicile in Australia, and ties to it, like utility bills etc, I think there would be little they could offer by way of a defense.  

 

Yes, residency has been done to death, and everyone has their own information they are relying on, and a system that is working for them.   I am not saying my system is the best.  I am more than happy to listen to what has been working for others.

 

I have no doubt that the Australian government will be chasing every dollar they can in the future, and immigration data bases showing citizens outside of Australia for 180 days is an easy target, and difficult to fly under the radar with.   

 

I would suggest all Aussies expats get their ducks in a row, because it's only a matter of time before we are all contacted by the ATO for a "please explain."  

Yep true, the 180 day rule is just one of the criterion.

IMO, it will mostly come down to how many days a year do you spend in Australia for most cases.

 

Some people on here haven't been back for years or only go and spend a few days a year.

Because they have an Australian address, a Medicae card or tick something on their departure card, they think they will be OK.

 

I don't agree about your please explain letter from the ATO.

A lot will depend on income levels I think.

It's not as easy as you think with Immigration records.

The ATO usually target audits for occupations, income levels and then there are just random audits.

 

Also, could not see the ATO targeting pensioners, as that would be a PR disaster.

[KhunHeineken]

6 minutes ago, Will27 said:

Yep true, the 180 day rule is just one of the criterion.

IMO, it will mostly come down to how many days a year do you spend in Australia for most cases.

Yep, which means most on this thread / forum will be effected.

 

6 minutes ago, Will27 said:

Some people on here haven't been back for years or only go and spend a few days a year.

Because they have an Australian address, a Medicae card or tick something on their departure card, they think they will be OK.

Only a matter of time before they are going to be in for a big shock.

 

7 minutes ago, Will27 said:

I don't agree about your please explain letter from the ATO.

A lot will depend on income levels I think.

As you said, it will simply come down to how many days an expat is outside Australia, because it's the easiest to prove.  Immigration know when you left Australia, and you can't dispute it, only mount a defense for the purpose of leaving, and length of time away.

 

The "please explain" letter will target $1 as well as $1,000,000.  Same letter, only the individual's net worth differs, and the return for the ATO.  

 

The ATO will not differentiate.  They'll gladly take the $1 as well.

 

12 minutes ago, Will27 said:

It's not as easy as you think with Immigration records.

I disagree.  

 

Pensions have been decreased after 6 weeks of the recipient being outside of Australia.  This is proof of data bases communicating.

 

The immigration, Centrelink, and ATO data bases talk to each other.

 

15 minutes ago, Will27 said:

The ATO usually target audits for occupations, income levels and then there are just random audits.

Yep, that's domestic, and annually, around tax time.

 

What I think will eventually happen is the data base will spit out a list of thousands of Aussies that are abroad for more than 180 days, then match that up with tax returns, or lack of them, and then contact them with a "please explain."  This will particularly be the case for those with income generating assess in Australia.  

 

19 minutes ago, Will27 said:

Also, could not see the ATO targeting pensioners, as that would be a PR disaster.

The days of people receiving a pension are coming to an end.  Superannuation, and various deeming laws for assets have already seen to than.  

 

I am not saying the ATO will be on us next week, but it's only a matter of time before they turn their sights to lucrative and easy targets, such as Aussies not living in Australia for 180 days, but still generating income in Australia.  Eg.  rent, interest, dividends etc.  

[Will27]

4 minutes ago, KhunHeineken said:

Yep, which means most on this thread / forum will be effected.

 

Only a matter of time before they are going to be in for a big shock.

 

As you said, it will simply come down to how many days an expat is outside Australia, because it's the easiest to prove.  Immigration know when you left Australia, and you can't dispute it, only mount a defense for the purpose of leaving, and length of time away.

 

The "please explain" letter will target $1 as well as $1,000,000.  Same letter, only the individual's net worth differs, and the return for the ATO.  

 

The ATO will not differentiate.  They'll gladly take the $1 as well.

 

I disagree.  

 

Pensions have been decreased after 6 weeks of the recipient being outside of Australia.  This is proof of data bases communicating.

 

The immigration, Centrelink, and ATO data bases talk to each other.

 

Yep, that's domestic, and annually, around tax time.

 

What I think will eventually happen is the data base will spit out a list of thousands of Aussies that are abroad for more than 180 days, then match that up with tax returns, or lack of them, and then contact them with a "please explain."  This will particularly be the case for those with income generating assess in Australia.  

 

The days of people receiving a pension are coming to an end.  Superannuation, and various deeming laws for assets have already seen to than.  

 

I am not saying the ATO will be on us next week, but it's only a matter of time before they turn their sights to lucrative and easy targets, such as Aussies not living in Australia for 180 days, but still generating income in Australia.  Eg.  rent, interest, dividends etc.  

It's easy for Centrelink to data match with Immigration as they can automatically run their clients through the system.

 

Not so easy for the ATO to data match unless they're targeting an individual.

The ATO might target rthose as you said who are overseas and earning rent and interest etc.

But I'm pretty sure the average pensioner who only has a bit of interest will be fine.

 

The ATO usually don't target low income's unless they're investigating someone.

I still don't believe they will target pensions and low incomes due to adverse publicity.

 

 

 

that's my take on it anyway.

[KhunHeineken]

3 minutes ago, Will27 said:

It's easy for Centrelink to data match with Immigration as they can automatically run their clients through the system.

 

Not so easy for the ATO to data match unless they're targeting an individual.

The ATO might target rthose as you said who are overseas and earning rent and interest etc.

But I'm pretty sure the average pensioner who only has a bit of interest will be fine.

 

The ATO usually don't target low income's unless they're investigating someone.

I still don't believe they will target pensions and low incomes due to adverse publicity.

 

 

 

that's my take on it anyway.

For the purpose of this discussion, maybe we better define the term "pensioner."

 

When you use the word pensioner, do you mean someone receiving an age pension from Centrelink, or do you mean anyone over the age of 65?  

 

If you mean someone receiving a Centrelink age pension, and living in Thailand, I think a few clips in the news media telling how Aussie expats in Bali, Thailand etc are living it up on the tax payer's money might gather a bit of support for cutting them off. 

 

As I said earlier, the days of people being eligible to receive an age pension are coming to an end.  People retiring in the next 10 years will most likely not be eligible, due to superannuation, property and asset ownership, and having cash.  People receiving an age pension in the future will most likely be people who have never worked and have always played the system and been on Centrelink.     

 

if you are talking about someone over the age of 65 years of age, living in Thailand, who has worked hard all their life and has considerable assets like rental properties, shares, and cash in a bank earning interest, then he would be an easy target, and worth a few dollars each year to the ATO to scoop him up in the expat 180 day drag net.

 

Either way, the Australian government saves money, or makes money, so why wouldn't they target "pensioners?"  

 

Australia is broke.  It was broke before covid.  They will be chasing every dollar they can, and the 180 day rule, for expats still generating an income in Australia, makes them soft targets.

[Will27]

10 minutes ago, KhunHeineken said:

For the purpose of this discussion, maybe we better define the term "pensioner."

 

When you use the word pensioner, do you mean someone receiving an age pension from Centrelink, or do you mean anyone over the age of 65?  

 

If you mean someone receiving a Centrelink age pension, and living in Thailand, I think a few clips in the news media telling how Aussie expats in Bali, Thailand etc are living it up on the tax payer's money might gather a bit of support for cutting them off. 

 

As I said earlier, the days of people being eligible to receive an age pension are coming to an end.  People retiring in the next 10 years will most likely not be eligible, due to superannuation, property and asset ownership, and having cash.  People receiving an age pension in the future will most likely be people who have never worked and have always played the system and been on Centrelink.     

 

if you are talking about someone over the age of 65 years of age, living in Thailand, who has worked hard all their life and has considerable assets like rental properties, shares, and cash in a bank earning interest, then he would be an easy target, and worth a few dollars each year to the ATO to scoop him up in the expat 180 day drag net.

 

Either way, the Australian government saves money, or makes money, so why wouldn't they target "pensioners?"  

 

Australia is broke.  It was broke before covid.  They will be chasing every dollar they can, and the 180 day rule, for expats still generating an income in Australia, makes them soft targets.

When I say pensioner, I'm referring to people on the OAP.

What do you mean "cutting them off"?

They're entitled to the the pension and portability.

Again, cannot see the government going after them.

 

Don't agree with you about pensions coming to an end.

A mate of mine is retiring in a few years.

Had a bad divorce and lost of a lot of assets.

He will be eligible for the OAP.

Has ordinary superannuation.

I think there are loads in that category.

 

I'm not talking about expats who have a lot of assets/cash.

That's a different kettle of fish for the ATO than the average person on the OAP.

Let's face it, if they have loads of money or assets, a lot won't qualify for the OAP anyway.

 

I've said several times, IMO, the government/ATO won't be targeting OAP on smallish incomes.

 

 

[KhunHeineken]

4 minutes ago, Will27 said:

When I say pensioner, I'm referring to people on the OAP.

What do you mean "cutting them off"?

They're entitled to the the pension and portability.

Again, cannot see the government going after them.

 

Don't agree with you about pensions coming to an end.

A mate of mine is retiring in a few years.

Had a bad divorce and lost of a lot of assets.

He will be eligible for the OAP.

Has ordinary superannuation.

I think there are loads in that category.

 

I'm not talking about expats who have a lot of assets/cash.

That's a different kettle of fish for the ATO than the average person on the OAP.

Let's face it, if they have loads of money or assets, a lot won't qualify for the OAP anyway.

 

I've said several times, IMO, the government/ATO won't be targeting OAP on smallish incomes.

 

 

 

I take your point, however, just how many people have had messy divorces? 

 

I mean, to work all of your life, up until pension age, and still be able to qualify for the pension, these people would not be in the majority.

 

In any case, all the government has to do is tighten the criteria to qualify, like the amount of cash you can have, or the value of your home.  Basically, force you to use your own money first, and even force a downsize your property, only then put your hand out, all the while hoping you die before eventually becoming eligible for a pension.

 

I never suggested pensions will come to an end, just the criteria to qualify for the pension will see the majority of people unable to immediately qualify.  Basically, why would the government give someone with hundreds of thousands of dollars in superannuation, or two houses, or a lot of shares, an age pension?   

 

Another matter to consider is, the government needs that age pension money circulating in the Australian economy, not benefiting Thailand's economy.  They may simply stop portability, not the pension itself, thus ensuring the money circulates inside the Australian economy.  

 

I've just started a thread with a recent news article showing the huge amount of debt Australia is in.  Maybe some long term expats are not aware.  For sure some tax enforcement, new taxes, and government savings, are not far away.    

[Will27]

23 minutes ago, KhunHeineken said:

 

I take your point, however, just how many people have had messy divorces? 

 

I mean, to work all of your life, up until pension age, and still be able to qualify for the pension, these people would not be in the majority.

In any case, all the government has to do is tighten the criteria to qualify, like the amount of cash you can have, or the value of your home.  Basically, force you to use your own money first, and even force a downsize your property, only then put your hand out, all the while hoping you die before eventually becoming eligible for a pension.

 

I never suggested pensions will come to an end, just the criteria to qualify for the pension will see the majority of people unable to immediately qualify.  Basically, why would the government give someone with hundreds of thousands of dollars in superannuation, or two houses, or a lot of shares, an age pension?   

 

Another matter to consider is, the government needs that age pension money circulating in the Australian economy, not benefiting Thailand's economy.  They may simply stop portability, not the pension itself, thus ensuring the money circulates inside the Australian economy.  

 

I've just started a thread with a recent news article showing the huge amount of debt Australia is in.  Maybe some long term expats are not aware.  For sure some tax enforcement, new taxes, and government savings, are not far away.    

IMO, there are a lot of people who still qualify for the pension.

Not everyone owns properties or have high paying jobs.

 

We disagree on the government targeting pensioners.

Without rehashing everything, I simply don't agree with you that the government will tighten the criteria for the OAP.

Nor do I think they will stop portability.

 

There are a lot more easier and less political ways for the government to make money back than to go after pensioners.

I just can't see it happening.

 

 

Edited December 30, 2021 by Will27

[KhunHeineken]

On 12/30/2021 at 2:41 PM, Will27 said:

IMO, there are a lot of people who still qualify for the pension.

Not everyone owns properties or have high paying jobs.

 

We disagree on the government targeting pensioners.

Without rehashing everything, I simply don't agree with you that the government will tighten the criteria for the OAP.

Nor do I think they will stop portability.

 

There are a lot more easier and less political ways for the government to make money back than to go after pensioners.

I just can't see it happening.

 

 

 

I understand the point you are making, but my comments are directed towards the future.

 

Compulsory superannuation started in 1992 with a 3% contribution.  Given wages were low in 1992, and 3% of a low wage doesn't amount to much, and the higher cost of living in the 2000's to the present year, I agree with you that many people in the work force in this period will not have enough superannuation and will require an aged pension to survive.  indeed, some Aussie expats in Thailand may fall into this category and I agree with you they may slip through the net.

 

Superannuation then went to 6%, is currently 10% and they want it to go to 12% or higher.  

 

The point I am trying to make is, if you are currently in your 40's, and been on the 10% for most of your working life, there will still be hundreds of thousands of dollars in your superannuation fund at retirement age.  I assume during one's working life that a mortgage has been paid off, and the worker also owns a property at some stage of their life.  

 

The employment or skill set doesn't have to be a lucrative one to accumulate this nest egg over a working life of 50 years, and to pay off a mortgage over 30 years, but granted, paying off a mortgage is easier when married and having two incomes. 

 

Someone who has been working full time in retail, or hospitality, which are not high paying jobs, will still accumulate hundreds of thousands of dollars in superannuation. It's not just doctors or lawyers, but of course they will have more money in their fund.  

 

I just can't see the government giving an aged pension to a 65 year old who has just retired and has access to hundreds of thousands of dollars in superannuation. 

 

I actually think the opposite, the government will want to get their hands on that money,  and this is why I say for Australians retiring to Thailand with a superannuation nest egg, the government may deem them to be non residents and tax any earnings they make on that nest egg and / or renting their house out.

 

I am really only talking about superannuants, not aged pensioners.  There will be a time in Australia's future where the the vast majority of working Australians will not qualify for an aged pension, due to having a lump sum in a superannuation fund.  These are the people I am talking about.  Basically, self funded retirees.  We call them pensioners by age, but they are not receiving any government age pension, they are using their own money. 

 

There would be some cases, like a messy divorce, or, someone working in the black economy all their life, who may retire at 65 and show no savings / superannuation and will be given a pension, but they are in the minority.  

 

You only have to chat with some Aussie expats you meet in a bar in Thailand and ask "What did you do for a crust back in Oz" and just about all of the expats I meet have had some type of career.  It's that career, combined with compulsory superannuation, that will see many ineligible for an aged pension in the future.

 

As a crude example, the average Australian wage is $62,500 a year.  10% of that is $6,250.  Over a 50 year working life, that's around $312,500 in superannuation to retire on.  I can't see the government giving out an aged pension to someone who has access to over $300,000. 

 

If I won $300,000 in the lottery tomorrow I would be asking my accountant what's the best way to keep the tax man's hands off it.  Superannuants face the same issue, and more so, if they are expat non residents.     

[thaibeachlovers]

On 12/30/2021 at 2:20 PM, KhunHeineken said:

I have no doubt that the Australian government will be chasing every dollar they can in the future, and immigration data bases showing citizens outside of Australia for 180 days is an easy target, and difficult to fly under the radar with.   

Indeed, governments that have spent like there is no tomorrow during covid will be needing to squeeze us as much as possible to extract every last cent they can.

Pity that they still waste so much of what they already get.

[thaibeachlovers]

On 1/18/2022 at 12:09 AM, KhunHeineken said:

I assume during one's working life that a mortgage has been paid off, and the worker also owns a property at some stage of their life.  

Why would you assume that most own property? Given around 50% divorce rate that's millions of men that lose their houses, and probably can't buy another as house prices have gone berserk since they bought the first one. 50% of the house value just isn't enough to buy in the present housing market.

[Adumbration]

On 1/17/2022 at 6:09 PM, KhunHeineken said:

As a crude example, the average Australian wage is $62,500 a year.  10% of that is $6,250.  Over a 50 year working life, that's around $312,500 in superannuation to retire on.  I can't see the government giving out an aged pension to someone who has access to over $300,000. 

 

Dreadfully ill informed example.

 

Cut off level for pension for a single non-homeowner is $816,250 and has moved up over the last few years with indexation:

 

https://www.servicesaustralia.gov.au/assets-test-for-pensions?context=22526

[KhunHeineken]

5 hours ago, Adumbration said:

Dreadfully ill informed example.

 

Cut off level for pension for a single non-homeowner is $816,250 and has moved up over the last few years with indexation:

 

https://www.servicesaustralia.gov.au/assets-test-for-pensions?context=22526

Just goes to show how out of touch you are.

 

Given most expat retirees arrive in Thailand as single, I have quoted the single assets test.  This is from your own link.

 

The example I gave was of the average Australian wage, NO INTEREST, just the actual deposited amount, for 50 years. 

 

That $1 of compulsory Superannuation that was deposited from a person's first day at work, when they were 18 years of age, earns interest for 50 years, which I did not include.  

 

Granted, they may not start on the average national wage at 18, but there's every chance that by the end of their career they will be earning more than the average national wage, so let's pick the average national of $62,500 to determine their annual Superannuation contributions.

 

Why don't you throw $6,250 per annum (annual superannuation contribution) into a compounding calculator and see what figure you come up with after 50 years, and at a modest 5% return.  

 

Here's a compounding calculator link.

 

https://moneysmart.gov.au/budgeting/compound-interest-calculator

 

$6,250 per annum, for 50 years, compounded at 5% equals $1,380,096 at retirement age.

 

It must be remembered, I was talking about future retirees NOT qualifying for a pension, and these figures pretty much show that.

 

It's fair to say, people approaching retirement in the near future, earned much less than what is the average national wage in 2022, and Superannuation wasn't introduced until 1992.  It's complicated to add into the mix cheaper housing in the 80's and 90's and cheaper cost of living, vehicles etc, but these tend to favor the wealth of the retiree. 

 

So let's be very conservative with some figures.

 

Given all variables, and using a lot of averaging, let's say only $3,750 of Superannuation was deposited, per annum, over 50 years.  This small amount makes up for the 12 years Superannuation didn't exist for someone who started working in 1980, but we must take into account Superannuation existed for more working years than not for them.  

 

The example is someone starts work in 1980 at the age of 18, with a view to retiring in 2030, age 68, with a 50 year career.  

 

Do you think $3,750 is a fair figure for this example?   Given the average national wage is now $62,500, which is $6,250 deposited annually into a Superannuation account.  If you don't think this is a fair figure, please state what you think is a fair figure.  

 

I admit there can be no compounding for the 12 years Superannuation didn't exist, but this is reflected in the lower $3,750 per annum figure, over the total 50 years.  

 

$3,7500 per annum, over 50 years, at a modest 5% interest equals $828,058 at retirement age.  

 

Both examples see neither a person who started work in 1980, or a person who started work anytime there after, qualify for ANY pension, and that is EXACTLY what Superannuation was designed for, and that is EXACTLY why the government has made the thresholds it has, because it excludes a majority, and makes them use their own money in their retirement.  

 

How this relates to the thread topic is, as I said, in the future, most Australians will not receive a pension, and the above figures show that. 

 

Picture all these Aussie expats with near, or over, a $1,000,000 Superannuation asset that is generating them an income, suddenly being deemed "non-residents for taxation purposes."  This doesn't even take into account a house they may rent out, or business interests, or shares etc.  Remember, they are NOT on a government pension, but earning in Australia, but living overseas, which is something the tax office doesn't like.   

 

If someone is retiring this year, 2022, in general, they started work in 1972, so had 30 years of working under compulsory superannuation.  They may still qualify for some pension.

 

Here is a link to the assets that will be assessed.  It's very comprehensive.

 

https://www.servicesaustralia.gov.au/asset-types?context=22526

 

Someone mentioned a messy divorce which could see guys lose assets, and I agree, this is a factor, but that could be offset by receiving an inheritance, for example, as most would have lost their parents as approaching retirement age.

 

The old Aussie pensioners sitting in Thailand today MAY slip through the cracks of the proposed changes, but as I have said in other posts, that old Aussie pensioner in Thailand will be few and far between in the future, because the future is just about all Aussie future retirees will not be eligible to receive a pension, and through Superannuation, will have an income producing asset in Australia which is ripe for non-resident for taxation purposes picking by the tax department. 

 

I'll say it one more time.  It's not so much about the pensioners now, it's the retirees with assets, and those who will retire in the near future with Superannuation.      

 

Below are the government thresholds, from your link.

 

Full Pension

If you get a full pension

When your assets are more than the limit for your situation, your pension will reduce.

If you’re a member of a couple, the limit is for both you and your partner’s assets combined, not each of you.

Your situation	Homeowner	Non-homeowner
Single	$270,500	$487,000

 

 

Part Pension

 

From 1 July 2021, part pensions cancel when your assets are over the cut off point for your situation.

If you’re a member of a couple, the limit is for both you and your partner’s assets combined, not each of you.

Your situation	Homeowner	Non-homeowner
Single	$599,750	$816,250

 

 

Transitional rate of pension.

 

From 1 July 2021, transitional rate pensions cancel when your assets are over your cut off point.

If you’re a member of a couple, the limit is for both you and your partner’s assets combined, not each of you.

Your situation	Homeowner	Non-homeowner
Single	$545,250	$761,750

 

 

 

Edited April 1, 2022 by KhunHeineken

[whereyougo]

Not true. I was made a non resident of OZ after 5 years away. I needed a hip replacement and flew back and was instantly provided with a medicare card However I just scraped in under the 5 year rue but they told me even after 5 years I would be ok as long as I provided proof I was living in OZ eg a lease and bank account.

[KhunHeineken]

On 3/31/2022 at 7:21 AM, thaibeachlovers said:

Indeed, governments that have spent like there is no tomorrow during covid will be needing to squeeze us as much as possible to extract every last cent they can.

Pity that they still waste so much of what they already get.

The wealthy don't pay tax, nor do those on welfare, and they can't make big business pay, or they just pack up and head offshore.  That just leaves the middle class, and I think they have been squeezed to the point there is nothing else that can be taxed from them.  

[KhunHeineken]

On 3/31/2022 at 7:27 AM, thaibeachlovers said:

Why would you assume that most own property? Given around 50% divorce rate that's millions of men that lose their houses, and probably can't buy another as house prices have gone berserk since they bought the first one. 50% of the house value just isn't enough to buy in the present housing market.

It's fair to question my assumption.  Statistically, most marry in their 20's to early 30's, although it was younger some decades ago. 

 

Say their marriage lasts 10 years, so getting married at an average of around 30 years of age, and divorced 10 years later at 40 years of age, still leaves around 25 years after divorce before hitting retirement age, to have paid off a property, but some may need to use some of their Superannuation to pay it off after they retire.  

 

There probably would be some child support involved, and I'm not suggesting it's easy for a divorced father to get into the property market, but most of my divorced friends eventually bought a property for themselves after divorce.  

 

You are correct, the property market has gone crazy, but once again, I am talking about guys that are set to retire, or will be retiring in the near future,  If you take into account the age of these guys, which is 60 and over, they were probably divorced more than 20 years ago, and have been able to make a decent financial recovery as property was still affordable around the time of their divorce.

 

For a younger person, divorcing at a point in time when the property market boomed, they may not have been able to do so, but those guys are around 50's and over, so around 17 years away from retirement age, and not the guys I am talking about.  

 

This is what I am basing my assumptions on.