Warning: Losing Portability of your Australian Pension

[Adumbration]

3 hours ago, KhunHeineken said:

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

 

 

 

You can't have your cake and eat it too.  In your previous post you said, and I quote:

 

" I can't see the government giving out an aged pension to someone who has access to over $300,000. "

 

In fact, someone can have access to over $800,000 baht and still get some pension.

[simple1]

Eather than arguing following is a reality check.

The Australian Bureau of Statistics (ABS) has worked out the average super balance for each age group, which you can use as a guide to see how your balance compares.

 

https://qsuper.qld.gov.au/super/how-much-super-should-i-have

[ozfarang]

Here's the SSA that @Adumbration was looking for at the start of this thread regarding loss of portability of the OAP,

 

http://classic.austlii.edu.au/au/legis/cth/consol_act/ssa1991186/s1220.html

[thaibeachlovers]

On 4/1/2022 at 9:33 PM, KhunHeineken said:

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.  

They can target even the rich through indirect taxes like GST/ VAT etc.

Though even the NZ government had to back down from imposing a capital gains tax, that is something I'd like to see imposed, as long as it was targeted at the wealthy and companies profiting from real estate speculation.

[thaibeachlovers]

On 4/2/2022 at 12:28 AM, Adumbration said:

You can't have your cake and eat it too.  In your previous post you said, and I quote:

 

" I can't see the government giving out an aged pension to someone who has access to over $300,000. "

 

In fact, someone can have access to over $800,000 baht and still get some pension.

That can be changed by politicians in parliament. Nothing is forever.

[thaibeachlovers]

On 4/1/2022 at 8:34 PM, KhunHeineken said:

at a modest 5% return.  

Where do you get 5% from? My savings have earned less than 1% since they used the 2008 crash as an excuse to stop giving us interest on savings.

[KhunHeineken]

6 hours ago, thaibeachlovers said:

They can target even the rich through indirect taxes like GST/ VAT etc.

Though even the NZ government had to back down from imposing a capital gains tax, that is something I'd like to see imposed, as long as it was targeted at the wealthy and companies profiting from real estate speculation.

 

GST/VAT is a broad base consumption tax.  It doesn't discriminate.  

 

At the last election Australians had the chance to vote for the winding back of negative gearing, which sees the tax payer help the wealthy own house after house after house, but it turns out that mum and dad's also have an investment property, so no one voted for it.  Look at the state of the property market today.

 

I ask earlier in the thread, "Where is the money going to come from to start to pay back the 1 trillion dollars debt?"  I can only imagine there will be higher taxes, and some new taxes, which means I would not be surprised if they broaden the definition of non resident for taxation purposes as it's easy to do and prove.  183 days out of Australia, you are a non resident, here's your bill, or here's your pension, minus 30%.     

 

I can see a "Covid Levy" being introduced, similar to the Queensland Flood Levy.

 

Australia is broke, and they have to find the money from somewhere.  

[KhunHeineken]

6 hours ago, thaibeachlovers said:

Where do you get 5% from? My savings have earned less than 1% since they used the 2008 crash as an excuse to stop giving us interest on savings.

 

It's in a fund, not a savings account or term deposit.  

[crouchpeter]

These posts are a combination of misinformation and scare-mongering. Of course, if you're a pensioner, you can jump on a plane and get free treatment in Oz. It's not complicated. Who are these people who embrace the <deleted> of " non resident for tax", or "permanently leaving Australia"? You're just making a rod for your own backs! Or you're self-important.

[Adumbration]

6 hours ago, crouchpeter said:

These posts are a combination of misinformation and scare-mongering. Of course, if you're a pensioner, you can jump on a plane and get free treatment in Oz. It's not complicated. Who are these people who embrace the <deleted> of " non resident for tax", or "permanently leaving Australia"? You're just making a rod for your own backs! Or you're self-important.

Your post has zero value.  It is an over simplification of a very complex problem.  

[deej]

1 hour ago, Adumbration said:

Your post has zero value.  It is an over simplification of a very complex problem.  

In my personal view,, it,s not a complex simplification at all, using the the old adage, Horse,s for course,s????

IN my case I,am classed as a Non Resident, 

BUT

Hold a  valid  Medicard  til 2027, and have  been on a portable  pension for approx 2 decades, firstly Invalid, and now Old Age.

Make what you  want of it????

[KhunHeineken]

On 6/27/2022 at 6:32 PM, deej said:

In my personal view,, it,s not a complex simplification at all, using the the old adage, Horse,s for course,s????

IN my case I,am classed as a Non Resident, 

BUT

Hold a  valid  Medicard  til 2027, and have  been on a portable  pension for approx 2 decades, firstly Invalid, and now Old Age.

Make what you  want of it????

Do you think the deal you are on will never change, ever?

[KhunHeineken]

On 6/27/2022 at 10:50 AM, crouchpeter said:

Of course, if you're a pensioner, you can jump on a plane and get free treatment in Oz. It's not complicated.

What about the hospital waiting list?

 

https://www.smh.com.au/national/nsw/overdue-elective-surgeries-to-triple-after-pandemic-backlog-analysis-shows-20220406-p5abau.html#:~:text=There are almost 95%2C000 people,waited longer than clinically recommended.

 

On 6/27/2022 at 10:50 AM, crouchpeter said:

Who are these people who embrace the <deleted> of " non resident for tax", or "permanently leaving Australia"? You're just making a rod for your own backs!

If the new proposed residency laws are passed, there will be no rods for backs to be made.  

 

It will be as simple as 183 days inside Australia, you are a resident for tax purposes.  183 days outside of Australia, you are a non resident for tax purposes.  

[deej]

1 hour ago, KhunHeineken said:

Do you think the deal you are on will never change, ever?

Doe,s anyone know, when i will, Kick the Bucket.???

In my case , i shall  cross my Bridge,s as i come to them, instead of  reading your scare mongering opinions,  {without any valid proof, what,s so ever )that Aussie Portable Old Pension,s may change in the near future.????????????

 

[KhunHeineken]

On 6/30/2022 at 7:31 AM, deej said:

Doe,s anyone know, when i will, Kick the Bucket.???

In my case , i shall  cross my Bridge,s as i come to them, instead of  reading your scare mongering opinions,  {without any valid proof, what,s so ever )that Aussie Portable Old Pension,s may change in the near future.????????????

 

Some like to plan ahead. 

 

I don't see anything wrong with hoping for the best but planning for the worse. 

 

The valid proof is the proposed changes are real.  A lot of links to them have been provided by me and others.  They are not fictitious.  

 

No one knows if they will be passed, and if they do get passed, how they will be implemented, but I don't see anything wrong with considering what impact, if any, they may have on expats.  

 

[scorecard]

In late 2019 I returned to OZ after nearly 2 decade out of country. I had lost My Medicare card and all Medicare records. 

 

I called Medicare and asked them if I was still eligible for a Medicare care, and to say I had lost my old card. A couple of quick questions and a confirmation I was eligible. Lady then she asked my addresthen gave me the address of the nearest Centrelink office and the bus numbers to get there, just 10 minutes away from my rented apartment.

 

At Centrelink they asked me a few questions to try to help them search for my old Medicare number. They couldn't find my old number.

 

They then did an online request for a new number. Two minutes later a new Medicare number. The Centrelink officer quickly completed a template letter, with my new number, which I could use immediately anywhere in Australia.

 

She also mentioned 'your new plastic card should arrive at home within 14 days'. It came in about 5 days.

 

I did use the letter the day after issue at a big hospital in Sydney. No questions asked, no hesitation to accept / use the letter. 

[Lucky Bones]

12 minutes ago, scorecard said:

In late 2019 I returned to OZ after nearly 2 decade out of country. I had lost My Medicare card and all Medicare records. 

 

I called Medicare and asked them if I was still eligible for a Medicare care. They they asked me to go to any Centrelink office (they gave me the address of the closest office and bus numbers to get there, just 10 minutes from my rented apartment).

 

At Centrelink they asked me a few questions to try to help them search for my old Medicare number. They couldn't find my old number.

 

They then did an online request for a new number. Two minutes later a new Medicare number. The Centrelink officer quickly completed a template letter, with my new number, which I could use immediately anywhere in Australia.

 

She also mentioned your new plastic card should arrive at home within 14 days. It came in about 5 days.

 

I did use the letter the day after issue at a big hospital in Sydney. No questions asked, no hesitation to accept / use the letter. 

Fair call. But I guess each individual has a different story depending upon the Centrelink persons knowledge.

Just like Thailand, Oz can lead you astray.

 

[scorecard]

21 minutes ago, Lucky Bones said:

Fair call. But I guess each individual has a different story depending upon the Centrelink persons knowledge.

Just like Thailand, Oz can lead you astray.

 

Sure, I used the same Centrelink office a couple of days later to get a CRN (Centrelink Reference number) and to apply for the OAP. The staff I had contact with were all good listeners, quite knowledgeable, helpful, friendly and polite and keen to ensure all my questions had been clearly answered, and very small  waiting time. 

 

I can also share that quite a few times I called the direct 'Older Australians Line'. Always answered quickly, good listeners, very focused. Twice (different calls) the officer said politely 'Your question is a little beyond my knowledge, can you please wait just 1 or 2 minutes so I can speak to my supervisor and get the correct answer?' I responed YES.

 

Within 1 or 2 minutes the lady back on the call with a complete answer and checking that the answer was fully aligned to my original question and did i have any further questions. No complaints whatever.   

[scorecard]

On 6/30/2022 at 1:06 PM, KhunHeineken said:

What about the hospital waiting list?

 

https://www.smh.com.au/national/nsw/overdue-elective-surgeries-to-triple-after-pandemic-backlog-analysis-shows-20220406-p5abau.html#:~:text=There are almost 95%2C000 people,waited longer than clinically recommended.

 

If the new proposed residency laws are passed, there will be no rods for backs to be made.  

 

It will be as simple as 183 days inside Australia, you are a resident for tax purposes.  183 days outside of Australia, you are a non resident for tax purposes.  

You don't know that to be fact.

 

Just more of your attempts to stir people up and frighten them for no valid specific reason.

[KhunHeineken]

On 10/18/2022 at 11:14 AM, scorecard said:

You don't know that to be fact.

 

Just more of your attempts to stir people up and frighten them for no valid specific reason.

It hasn't come in yet, so it's not fact, but the proposed changes are fact. 

 

My posts are not about frightening anyone, but more about alerting them to the proposed changes so they will be prepared.

 

[KhunHeineken]

Looks like the new Labor government will also be picking up what the last Liberal government left for these proposed changes, but will review the number of days.

 

https://www.afr.com/policy/tax-and-super/assistant-treasurer-flags-new-tax-residency-rules-20220826-p5bd1v

 

It's more focused on how long you are inside Australia, but the flip side for many expats is how long you are outside Australia.

 

It's no so much about losing portability, but IF residency status MAY effect pensions. 

 

Came across this online petition about it, but it's closed now.  Obviously there's quite a few expats showing interest in these proposed changes. 

 

https://atlaswealth.com/news/australian-tax-residency-change-petition/

 

 

 

 

[scorecard]

On 6/30/2022 at 1:01 PM, KhunHeineken said:

Do you think the deal you are on will never change, ever?

Everybody knows things can change. 

[KhunHeineken]

On 12/11/2022 at 7:37 AM, scorecard said:

Everybody knows things can change. 

Yeah, and many people don't like change, but why shoot the messenger? 

[BritManToo]

On 11/2/2021 at 11:39 AM, Adumbration said:

It states if you have advised Centerlink that you have moved permanently overseas,

Best not be silly enough to declare you have perminantly moved overseas then. 

[scorecard]

1 hour ago, KhunHeineken said:

Yeah, and many people don't like change, but why shoot the messenger? 

Yawn...

[KhunHeineken]

1 hour ago, BritManToo said:

Best not be silly enough to declare you have perminantly moved overseas then. 

What's the point, if the immigration data base now talks to the tax office data base and the welfare data base? 

[KhunHeineken]

25 minutes ago, scorecard said:

Yawn...

Let's hope you are not awoken from your sleep, should these changes come in, and have a negative impact.