Australian OAP Taxation Issues.

[TroubleandGrumpy]

12 hours ago, KhunHeineken said:

I find his posts amusing.  Especially his "interpretations" of legislation.  Very entertaining.  Most of them are up there with the famous "that's just for guys like Paul Hogan" post. 

 

His latest claim to fame is how contracts and caveats on the house and land be bought, which is not in his name, offers some security to him in the future for his accommodation.  I'm sure those pieces of paper will stop a bullet or machete.  Just another farang thinking western laws work in Thailand for foreigners.   

 

You should unblock him, just for the laughs. 

 Gotta agree with that - unblocked and ready for a laugh - probably wont take long 😁

 

[georgegeorgia]

On 4/8/2024 at 4:54 PM, 4MyEgo said:

 

Regardless of what you believe or what your opinion is, because you, and you alone believe what you believe, doesn't make you right, it's actually detrimental in the way you perceive things in life.

 

You have to agree, that you cannot get a better clarification (independent) of you or me or HK, on Article 18, i.e. from the Ministerial Correspondence Team for the ATO, who in case you didn't read it, stated that if you are a RESIDENT of Thailand, your age pension, is TAXABLE in Thailand.

 

There is an old quote that says, "You can't convince anyone of anything. You can only give them the right information, so that they can convince themselves. 

 

Also some people know they're wrong, but just like to argue.

 

The above said, I have beaten this dead horse enough, believe what you want, just don't try to convince me with what you believe, because there is nothing more right than Article 18 of the DTA, which is backed up by the Ministerial Correspondence Team for the ATO who are independent to anyone on this forum.

 

Hoo-roo..............

 

 

I just want to say your posts are very informative, thankyou personally from me , I enjoy reading your posts and gain a lot of knowledge 

[KhunHeineken]

1 hour ago, georgegeorgia said:

I just want to say your posts are very informative, thankyou personally from me , I enjoy reading your posts and gain a lot of knowledge 

Your sarcasm is not wasted on me. Well done.  

[KhunHeineken]

Hopefully, the proposed changes to residency tax laws will not make this year's May budget. 

 

The Labor government has shown an interest in the proposed changes, with the Assistant Treasurer stating they are in the government's "in tray."  (link previously provided)  Also, the Labor government moved the proposed changes onto the consultation stage, which has since ended.  (link previously provided) 

 

This tends to show that both parties have shown a willingness to pass this legislation.  

 

https://www.pwc.com.au/insights/federal-budget-2023/analysis-and-insights/unenacted-measures.html

 

"There are several tax measures announced by the former Government that are outstanding with no indication of whether the current Government intends to proceed with them, including the previously announced changes to the tax residency rules for individuals and companies, and reforms to Division 7A (relating to private company deemed dividends)."

 

[TroubleandGrumpy]

On 5/5/2024 at 9:29 AM, KhunHeineken said:

Hopefully, the proposed changes to residency tax laws will not make this year's May budget. 

 

The Labor government has shown an interest in the proposed changes, with the Assistant Treasurer stating they are in the government's "in tray."  (link previously provided)  Also, the Labor government moved the proposed changes onto the consultation stage, which has since ended.  (link previously provided) 

 

This tends to show that both parties have shown a willingness to pass this legislation.  

 

https://www.pwc.com.au/insights/federal-budget-2023/analysis-and-insights/unenacted-measures.html

 

"There are several tax measures announced by the former Government that are outstanding with no indication of whether the current Government intends to proceed with them, including the previously announced changes to the tax residency rules for individuals and companies, and reforms to Division 7A (relating to private company deemed dividends)."

 

Thanks for the information - good to know.  However, having looked into the issues regarding the proposed change to the tax residency rule, I dont see it as a problem for Exats living overseas on the pension.  

 

This advice from the ATO Community, although not a definitive fact, does indicate that it is not a problem.

Tax on aged pension while living overseas. | ATO Community

In summary that means if you do not need to lodge a tax return then it is definitely not an issue.

This is the website to check if anyone wants to know if they need to lodge a tax return. It is available direct and annononymous so you can check out all the options. 

calculatorsandtools | Australian Taxation Office

I do not recommend using MyGov to do this or any other online Govt assessment, because they will record your activity (for later use against you).

[KhunHeineken]

3 hours ago, TroubleandGrumpy said:

Thanks for the information - good to know.  However, having looked into the issues regarding the proposed change to the tax residency rule, I dont see it as a problem for Exats living overseas on the pension.  

 

This advice from the ATO Community, although not a definitive fact, does indicate that it is not a problem.

Tax on aged pension while living overseas. | ATO Community

In summary that means if you do not need to lodge a tax return then it is definitely not an issue.

This is the website to check if anyone wants to know if they need to lodge a tax return. It is available direct and annononymous so you can check out all the options. 

calculatorsandtools | Australian Taxation Office

I do not recommend using MyGov to do this or any other online Govt assessment, because they will record your activity (for later use against you).

Same source.

 

https://community.ato.gov.au/s/question/a0J9s0000002ngF/p00172380

 

And this one.

 

https://community.ato.gov.au/s/question/a0J9s000000O2y4/p00197245

 

The lodging of a tax return may be a moot point.  The government pays the pension.  The government knows you have been outside of Australia for 183 days.  The government then deems you to be a non resident for tax purposes.  The government then withholds 32.5% of your fortnightly pension for non resident tax.  This is regardless of whether a tax return has been submitted, or not.

[TroubleandGrumpy]

39 minutes ago, KhunHeineken said:

Same source.

 

https://community.ato.gov.au/s/question/a0J9s0000002ngF/p00172380

 

And this one.

 

https://community.ato.gov.au/s/question/a0J9s000000O2y4/p00197245

 

The lodging of a tax return may be a moot point.  The government pays the pension.  The government knows you have been outside of Australia for 183 days.  The government then deems you to be a non resident for tax purposes.  The government then withholds 32.5% of your fortnightly pension for non resident tax.  This is regardless of whether a tax return has been submitted, or not.

That is why Exats cannot decide based on a community help group opinion - there are probably a few more too.  What is clear though is that if you do not have to lodge a tax return, then you have no problems in that regards at this time.

However, if the ATO was to start taxing pension payments for non-residents living overseas, as you suggest might happen, if they change the definition of what constitutes a non-resident for tax purposes, then we all have problems.

I think that the definition will change, but I do not think that will result in ensions for Exats overseas being taxed - but fingers crossed that does not happen.  But if it does, then I will change to being a tax resident in Thailand (under DTA) and stop paying income taxes in Australia. By my calculations the tax payable in Thailand, with wife etc., would be far less than the 32% in Aust. 

[KhunHeineken]

1 hour ago, TroubleandGrumpy said:

That is why Exats cannot decide based on a community help group opinion - there are probably a few more too.  What is clear though is that if you do not have to lodge a tax return, then you have no problems in that regards at this time.

Many, including myself, have been avoiding paying non resident tax for years, and this is due to the many loop holes in the current 90 year old laws, which are mainly based around where an individual is "domiciled." 

 

The proposed changes to the tax residency laws will modernize to a physical presence and time based model.

 

Outside of Australia for 183 days, you will be a non resident for tax purposes.  It's as simple as that.  No reviews.  No appeals. 

 

1 hour ago, TroubleandGrumpy said:

However, if the ATO was to start taxing pension payments for non-residents living overseas, as you suggest might happen, if they change the definition of what constitutes a non-resident for tax purposes, then we all have problems.

The proposed changes do not have any thresholds, means testing, or exemptions, so they are not just for "guys like Paul Hogan."  

 

As the proposed laws stand, pensioners will be treated in the same way as someone who is self funded.

 

It's been shown before the pension is deemed an income, at law. 

 

1 hour ago, TroubleandGrumpy said:

I think that the definition will change, but I do not think that will result in ensions for Exats overseas being taxed - but fingers crossed that does not happen.  But if it does, then I will change to being a tax resident in Thailand (under DTA) and stop paying income taxes in Australia. By my calculations the tax payable in Thailand, with wife etc., would be far less than the 32% in Aust. 

Are you on a pension?  If so, you'll have to wait and see how the law is implemented, and if there are any changes to the legislation that has been proposed.

 

If you are not on a pension, and are self funded, you are going to have to move all your income generating assets out of Australia, which includes liquidating property, if you have any, otherwise, you will be taxed at 32.5% by Australia, and under the DTA, 32.5% being higher than Thai tax, you should pay no tax in Thailand.  I'm sure it will be fun explaining this to the Thai tax man.     

 

It's been shown before that foreign governments inform the Australian government of how much funds a foreign national is remitting.  

 

Keep in mind, Australia is now in the process of updating and expanding its DTA's, so the DTA with Thailand today, may not be the same DTA with Thailand tomorrow.  

 

Times are changing.  Data bases are lining up.  Governments are broke and desperate.  The tax man is coming.   

[TroubleandGrumpy]

14 hours ago, KhunHeineken said:

Many, including myself, have been avoiding paying non resident tax for years, and this is due to the many loop holes in the current 90 year old laws, which are mainly based around where an individual is "domiciled." 

 

The proposed changes to the tax residency laws will modernize to a physical presence and time based model.

 

Outside of Australia for 183 days, you will be a non resident for tax purposes.  It's as simple as that.  No reviews.  No appeals. 

 

The proposed changes do not have any thresholds, means testing, or exemptions, so they are not just for "guys like Paul Hogan."  

 

As the proposed laws stand, pensioners will be treated in the same way as someone who is self funded.

 

It's been shown before the pension is deemed an income, at law. 

 

Are you on a pension?  If so, you'll have to wait and see how the law is implemented, and if there are any changes to the legislation that has been proposed.

 

If you are not on a pension, and are self funded, you are going to have to move all your income generating assets out of Australia, which includes liquidating property, if you have any, otherwise, you will be taxed at 32.5% by Australia, and under the DTA, 32.5% being higher than Thai tax, you should pay no tax in Thailand.  I'm sure it will be fun explaining this to the Thai tax man.     

 

It's been shown before that foreign governments inform the Australian government of how much funds a foreign national is remitting.  

 

Keep in mind, Australia is now in the process of updating and expanding its DTA's, so the DTA with Thailand today, may not be the same DTA with Thailand tomorrow.  

 

Times are changing.  Data bases are lining up.  Governments are broke and desperate.  The tax man is coming.   

I hear you and your concerns are valid - the tax man winter is coming.

 

But I do not think that there will ever be any taxes applied to the age pension - whether a recipient is in Australia or Overseas. To tax the pension for those living overseas would be political suicide, because the obvious next step is to tax those in Australia, because the total amount is over the tax free threshold. It is counted as taxable income, only for the purposes of taxing additional income earned above the pension amount, and for other Centrelink related issues. 

 

Yes I get the age pension, and I have savings in Super (fully taxed during accumulation) that is taxed at 15% growth which is AOK with me.  And again, it would be political suicide to increase that 15% tax as it would affect millions. 

 

The bureaucrats and consultants only look at the 'hard' numbers when analysing any proposed change or initiative. The politician's advisers then look at things from the political impact perspective. Anything to do with 'politically active' and regularly 'complaining' pensioners with often nothing better to do, is something they know needs a very light touch and kid gloves.

 

Many years ago the Govt (public service) did a study/report about the cost of pensioners living overseas. Even though the 'goal' was to justify big reduction in the amount paid to overseas pensioners, the conclusion of the study was that pensioners living overseas saved the Government millions, when all the costs and benefits were analysed - and that included those that return when in the late stage of life. What they did because of that was to change and add those 'non basic' payments (supplements), so that they could be denied to those living overseas. 

[KhunHeineken]

40 minutes ago, TroubleandGrumpy said:

I hear you and your concerns are valid - the tax man winter is coming.

 

But I do not think that there will ever be any taxes applied to the age pension - whether a recipient is in Australia or Overseas. To tax the pension for those living overseas would be political suicide, because the obvious next step is to tax those in Australia, because the total amount is over the tax free threshold. It is counted as taxable income, only for the purposes of taxing additional income earned above the pension amount, and for other Centrelink related issues. 

 

Yes I get the age pension, and I have savings in Super (fully taxed during accumulation) that is taxed at 15% growth which is AOK with me.  And again, it would be political suicide to increase that 15% tax as it would affect millions. 

 

The bureaucrats and consultants only look at the 'hard' numbers when analysing any proposed change or initiative. The politician's advisers then look at things from the political impact perspective. Anything to do with 'politically active' and regularly 'complaining' pensioners with often nothing better to do, is something they know needs a very light touch and kid gloves.

 

Many years ago the Govt (public service) did a study/report about the cost of pensioners living overseas. Even though the 'goal' was to justify big reduction in the amount paid to overseas pensioners, the conclusion of the study was that pensioners living overseas saved the Government millions, when all the costs and benefits were analysed - and that included those that return when in the late stage of life. What they did because of that was to change and add those 'non basic' payments (supplements), so that they could be denied to those living overseas. 

I see you are putting forward "the government would lose too many votes" and "the government would never do that" argument. 

 

Did you make your way to the Australian Embassy in Bangkok to vote in the last election?  I didn't, neither did any of my Aussie friends.  How many votes do you think the government would lose from expats?  It would be so small that it would be irrelevant.  Also, who's to say it will be an election issue?  It could be presented during a budget, or passed into law 5 minutes before the close of a sitting. 

 

You must remember, the previous Liberal government proposed them, and the current Labor government haven't binned them, with the assistant treasurer stating they are "in the government's in-tray."  The current Labor government also moved the proposed changes on to the consultation stage, so the proposed changes have bipartisan support.  So,with  no political opposition to the proposed changes, they will sail through parliament eventually.  The Labor government has stated that are looking at the 45 days rule and possibly increasing it, but the proposed changes are not dead in the water under Labor.  

 

How many years ago was that study?  I posted some time ago that the government would like to see all that pension money in the Australian economy, and not going to help another country's economy.  Reason being, they get a lot of the pension back in taxes, fees, licenses, rates, excises etc.  That's a lot more people and a lot more money going towards growing the Australian economy.  Returning expats also create employment, and what do people with a job pay, income tax.  Returning expats need accommodation, and what do landlords pay on rent, tax.  Petrol in the car, tax.  Beer at the bowlo, tax.  Food at the supermarket, GST.  Etc, Etc. 

 

Currently, every pension being sent overseas is a total loss to Australia.  It's financially beneficial to have that pension, and the person, inside Australia, with that pension money circulating in the Australian economy.  All that pension money to pensioners every fortnight does have a flow on effect.  

 

On this point, your argument focuses on Medicare.  So the waiting lists get longer, that's all.   Do you really think the government is going to recruit more medical staff, no.  The hospital bill will remain the same, but the queue just gets longer. 

 

As the proposed changes stand, there are no exemptions, means testing, or no tax free threshold to non resident tax brackets, so how do you propose expat pensioners will get out of paying non resident tax?  The pension is deemed an income.  The recipient is outside of Australia for 183 days, thus, a non resident.  The payer is also the taxer, so easy to collect.  The law will treat the old age pensioner in the same way as it treats Paul Hogan because there is nothing in the proposed changes to differentiate between the two.

 

The government could add a tax free threshold to non resident tax rates, but why would they guys like Paul Hogan a tax break?  

 

In relation to the DTA with Thailand, it must be remembered that whichever country has the highest tax has primary taxing rights.  Eg.  Australia taxes 32.5%, so you don't pay say 10% in Thailand. 

 

There are thousands of Aussie retires across Thailand.  The Australian government would have noticed Thailand's new tax on remitted funds and may be tempted to update the DTA with a tax just above Thailand's, so not only is it the source country but also the primary taxing rights country.  I have posted the DTA with Germany, and from memory, it was 15%.

 

Interesting times ahead, but I disagree taxing expat pensioners will cost votes, and how it's financially beneficial to the Australian government to see as many pensioners as possible leave Australia to live overseas.  

 

 

[TroubleandGrumpy]

8 minutes ago, KhunHeineken said:

I see you are putting forward "the government would lose too many votes" and "the government would never do that" argument. 

 

Did you make your way to the Australian Embassy in Bangkok to vote in the last election?  I didn't, neither did any of my Aussie friends.  How many votes do you think the government would lose from expats?  It would be so small that it would be irrelevant.  Also, who's to say it will be an election issue?  It could be presented during a budget, or passed into law 5 minutes before the close of a sitting. 

 

You must remember, the previous Liberal government proposed them, and the current Labor government haven't binned them, with the assistant treasurer stating they are "in the government's in-tray."  The current Labor government also moved the proposed changes on to the consultation stage, so the proposed changes have bipartisan support.  So,with  no political opposition to the proposed changes, they will sail through parliament eventually.  The Labor government has stated that are looking at the 45 days rule and possibly increasing it, but the proposed changes are not dead in the water under Labor.  

 

How many years ago was that study?  I posted some time ago that the government would like to see all that pension money in the Australian economy, and not going to help another country's economy.  Reason being, they get a lot of the pension back in taxes, fees, licenses, rates, excises etc.  That's a lot more people and a lot more money going towards growing the Australian economy.  Returning expats also create employment, and what do people with a job pay, income tax.  Returning expats need accommodation, and what do landlords pay on rent, tax.  Petrol in the car, tax.  Beer at the bowlo, tax.  Food at the supermarket, GST.  Etc, Etc. 

 

Currently, every pension being sent overseas is a total loss to Australia.  It's financially beneficial to have that pension, and the person, inside Australia, with that pension money circulating in the Australian economy.  All that pension money to pensioners every fortnight does have a flow on effect.  

 

On this point, your argument focuses on Medicare.  So the waiting lists get longer, that's all.   Do you really think the government is going to recruit more medical staff, no.  The hospital bill will remain the same, but the queue just gets longer. 

 

As the proposed changes stand, there are no exemptions, means testing, or no tax free threshold to non resident tax brackets, so how do you propose expat pensioners will get out of paying non resident tax?  The pension is deemed an income.  The recipient is outside of Australia for 183 days, thus, a non resident.  The payer is also the taxer, so easy to collect.  The law will treat the old age pensioner in the same way as it treats Paul Hogan because there is nothing in the proposed changes to differentiate between the two.

 

The government could add a tax free threshold to non resident tax rates, but why would they guys like Paul Hogan a tax break?  

 

In relation to the DTA with Thailand, it must be remembered that whichever country has the highest tax has primary taxing rights.  Eg.  Australia taxes 32.5%, so you don't pay say 10% in Thailand. 

 

There are thousands of Aussie retires across Thailand.  The Australian government would have noticed Thailand's new tax on remitted funds and may be tempted to update the DTA with a tax just above Thailand's, so not only is it the source country but also the primary taxing rights country.  I have posted the DTA with Germany, and from memory, it was 15%.

 

Interesting times ahead, but I disagree taxing expat pensioners will cost votes, and how it's financially beneficial to the Australian government to see as many pensioners as possible leave Australia to live overseas.  

 

 

Good points - but it is not about Expat's votes, it is about the votes of pensioners at home, because they would see any such move as a step towards their own pensions being taxed in the long run.  They have been around a while and know how the Govt works - which means they know that you never let them get the thin end of any wedge in. 

 

If I recall it was the early 2000s - but it was a huge shock to them when they found out the financial downsides to 'forcing' most of the overseas pensioners to return home. The politicians will have maybe forgotten or not know that, but the public service has a very long memory.

 

I agree that the tax non-resident rule will be changed, but I dont think that will result in pensions overseas being taxed.  But as you say it is an opinion and we disagree - lets all hope I am right.

 

Paul Hogan does not get the Age Pension - nor do any other very wealthy Aussies living overseas.

 

Withg regards to the DTA, the provision exists for the taxpayer to decide which country they will pay taxes to based upon there own peronal fianncial situation, and that includes taking the best option for themselves. The DTA has many options and methods to avoid double taxation, and that inlcudes selecting one country or the other as your primary income tax location. There are several Scandinavians in Thailand who pay all their taxes in Thailand, because it is far less here than it is in the Scandinavia countries. 

 

Age Pensioners in Australia are the largest 'costing' demographic - and that is increasing year by year. The main cost of that demographic is not the pension payments - not by a long shot. Their main costs are the subsidised medical costs - everything from medications to doctors to hospitals to transportation. The more that leave the financially better off the Govt is actually. They will try to reduce payments and others things things as you say, but they will not IMO risk many of them suddenly coming back to the country and a resultant massive increase in the budget costs. Not sure how many in total (100K?) - but I think 50K would probably come back to Australia if the pension was slassed/cut - and that is a huge cost impost on the budget.

[KhunHeineken]

26 minutes ago, TroubleandGrumpy said:

Good points - but it is not about Expat's votes, it is about the votes of pensioners at home, because they would see any such move as a step towards their own pensions being taxed in the long run.  They have been around a while and know how the Govt works - which means they know that you never let them get the thin end of any wedge in. 

Why would a pensioner living in Australia care about expat pensioners?  This is the "pensioners would be up in arms" argument.  They wouldn't care less, and would care even less if it's sold that taxing expat pensioners will mean a little more money each fortnight for pensioners living in Australia.  An easy sell, if it has to be sold at all. 

 

Also, why do you think it will even be an election issue?  Look how quick the changes to the Stage 3 tax cuts came to being.  The proposed changes may sail through in the same way. 

 

The proposed changes to tax residency will have no effect on pensioners living in Australia, so I can't see them caring at all about it, and that's even if they do get a chance to vote on it as an election issue.

 

30 minutes ago, TroubleandGrumpy said:

If I recall it was the early 2000s - but it was a huge shock to them when they found out the financial downsides to 'forcing' most of the overseas pensioners to return home. The politicians will have maybe forgotten or not know that, but the public service has a very long memory.

 

So, the study is over 20 years old. 

 

Question.  If it's so financially beneficial for the government to have pensioners live overseas, why do they insist on the 2 year qualification period to gain pension portability?  By your thinking, they should pay them the pension so they stay outside of Australia.  Why do they force them back for 2 years with this policy if the policy runs at a loss? 

 

33 minutes ago, TroubleandGrumpy said:

I agree that the tax non-resident rule will be changed, but I dont think that will result in pensions overseas being taxed.  But as you say it is an opinion and we disagree - lets all hope I am right.

 

Paul Hogan does not get the Age Pension - nor do any other very wealthy Aussies living overseas.

Can you show me in the proposed changes where non resident pensioners get a tax break?  Without further changes to the proposed changes, pensions, and pensioners, will be treated as any other  non resident deriving an income from Australia, and yes, the pension is deemed an income.  

 

Paul Hogan does not get the pension, but what in the proposed changes differentiates pensioners from Paul Hogan?  

 

What do you think they will tweak to give expat pensioners a tax break?  

 

39 minutes ago, TroubleandGrumpy said:

Withg regards to the DTA, the provision exists for the taxpayer to decide which country they will pay taxes to based upon there own peronal fianncial situation, and that includes taking the best option for themselves. The DTA has many options and methods to avoid double taxation, and that inlcudes selecting one country or the other as your primary income tax location. There are several Scandinavians in Thailand who pay all their taxes in Thailand, because it is far less here than it is in the Scandinavia countries. 

 

Age Pensioners in Australia are the largest 'costing' demographic - and that is increasing year by year. The main cost of that demographic is not the pension payments - not by a long shot. Their main costs are the subsidised medical costs - everything from medications to doctors to hospitals to transportation. The more that leave the financially better off the Govt is actually. They will try to reduce payments and others things things as you say, but they will not IMO risk many of them suddenly coming back to the country and a resultant massive increase in the budget costs. Not sure how many in total (100K?) - but I think 50K would probably come back to Australia if the pension was slassed/cut - and that is a huge cost impost on the budget.

The higher taxing country has primary taxation rights.  I posted some youtube clips about this some time ago.

 

We will have to agree to disagree on the financial gain or loss to the government if pensioners return home, but what about if the government could tax expat pensioners, but they still live overseas.  Cha-Ching.  

 

It would be interesting to know how many pensioners would return to Australia to live permanently, or for 6 months of the year to escape the non resident tax, or, continue to reside in Thailand with a lower standard of living. 

 

[TroubleandGrumpy]

6 hours ago, KhunHeineken said:

Why would a pensioner living in Australia care about expat pensioners?  This is the "pensioners would be up in arms" argument.  They wouldn't care less, and would care even less if it's sold that taxing expat pensioners will mean a little more money each fortnight for pensioners living in Australia.  An easy sell, if it has to be sold at all. 

 

Also, why do you think it will even be an election issue?  Look how quick the changes to the Stage 3 tax cuts came to being.  The proposed changes may sail through in the same way. 

 

The proposed changes to tax residency will have no effect on pensioners living in Australia, so I can't see them caring at all about it, and that's even if they do get a chance to vote on it as an election issue.

I will respond one at a time - both for ease of writing and for others reading.

 

You could be right and yes many pensioners will not give a rat's rear about Expats overseas. But I was in the APA and they can be very 'active' if they think they are going to be 'next'.

 

 

[TroubleandGrumpy]

6 hours ago, KhunHeineken said:

So, the study is over 20 years old. 

 

Question.  If it's so financially beneficial for the government to have pensioners live overseas, why do they insist on the 2 year qualification period to gain pension portability?  By your thinking, they should pay them the pension so they stay outside of Australia.  Why do they force them back for 2 years with this policy if the policy runs at a loss? 

That change was introduced to stop people eligible for the pension, returning to Australia and applying for the pensions and then leaving immediately it was approved.  That was done a lot by people who had worked in Australia for decades and then returned to their home country - especially Italians and Greeks.

[TroubleandGrumpy]

6 hours ago, KhunHeineken said:

Can you show me in the proposed changes where non resident pensioners get a tax break?  Without further changes to the proposed changes, pensions, and pensioners, will be treated as any other  non resident deriving an income from Australia, and yes, the pension is deemed an income.  

 

Paul Hogan does not get the pension, but what in the proposed changes differentiates pensioners from Paul Hogan?  

 

What do you think they will tweak to give expat pensioners a tax break?  

 

The higher taxing country has primary taxation rights.  I posted some youtube clips about this some time ago.

 

We will have to agree to disagree on the financial gain or loss to the government if pensioners return home, but what about if the government could tax expat pensioners, but they still live overseas.  Cha-Ching.  

 

It would be interesting to know how many pensioners would return to Australia to live permanently, or for 6 months of the year to escape the non resident tax, or, continue to reside in Thailand with a lower standard of living. 

 

Everything you state above is predicated on your belief that once they change the rule regarding tax residency, that will automatically result in all pensioners overseas being taxed on their pension.

 

That is IMO not the case - and it is not in the stated aims of the proposed change as per the documents, nor has it been stated as a stated aim of the Government.  If you have a statement from the relevent Minister stating that the change will result in all Expats overseas being taxed on their pensions, or a stated aim within the documents, then please provide that.  I am not saying that you are definitely 100% wrong - you could be right - but you are stating things above based on your opinion of the outcome from the rule change proposed for tax residency - that is a leap I do not think will happen. 

[KhunHeineken]

13 hours ago, TroubleandGrumpy said:

You could be right and yes many pensioners will not give a rat's rear about Expats overseas. But I was in the APA and they can be very 'active' if they think they are going to be 'next'.

In my opinion, resident pensioners will not care about non resident pensioners.  Why should they?  There's nothing in the proposed changes that impact them. 

 

How many expat pensioners are members of the APA?  Why did you stop being a member?  Why would the APA care about non member pensioners? 

 

It could all be a moot point anyway, if it's not an election issue. 

[KhunHeineken]

13 hours ago, TroubleandGrumpy said:

That change was introduced to stop people eligible for the pension, returning to Australia and applying for the pensions and then leaving immediately it was approved.  That was done a lot by people who had worked in Australia for decades and then returned to their home country - especially Italians and Greeks.

Yes, I am aware why the policy exists.  I have posted about it previously.  You state it's financially beneficial for the government to pay pensions when the person is living overseas.

 

I asked you, if that's the case, why do they enforce the 2 year qualification for portability?  Wouldn't it be financially beneficial to just pay them the pension when they reach pension age and hope they stay outside of Australia?  Why force them back to Australia for 2 years, if a pensioner living in Australia is a bigger loss? 

 

Could it be there is some substance in the reasons I mentioned the government would like that pension money circulating within the Australian economy, for the taxes and flow on effect, and not growing a foreign country's economy? 

[KhunHeineken]

13 hours ago, TroubleandGrumpy said:

Everything you state above is predicated on your belief that once they change the rule regarding tax residency, that will automatically result in all pensioners overseas being taxed on their pension.

 

That is IMO not the case - and it is not in the stated aims of the proposed change as per the documents, nor has it been stated as a stated aim of the Government.  If you have a statement from the relevent Minister stating that the change will result in all Expats overseas being taxed on their pensions, or a stated aim within the documents, then please provide that.  I am not saying that you are definitely 100% wrong - you could be right - but you are stating things above based on your opinion of the outcome from the rule change proposed for tax residency - that is a leap I do not think will happen. 

I accept your opinion is different to mine, which is fine.  I am just trying to understand what you are basing your opinion on.  Did you read a clause somewhere in the proposed changes?  Are you relying on the DTA?  Do you think the government will amend the proposed changes so pensions / pensioners do not pay non resident tax?

 

Where in the proposed changes do you see an exemption for pensioners? 

 

Where in the non resident tax brackets do you see a tax free threshold? 

 

I agree with you it's not the intent of government to tax expat pensioners.  I have said many times on the other thread, "pensioners may very well be collateral damage."  Obviously, the proposed changes are not designed to target pensioners, but I see nothing in the proposed changes differentiating between pensioners and guys like Paul Hogan, hence, my opinion that pensioners may just be caught up in it. 

 

The way I see it, the government will not introduce a tax free threshold to non resident tax brackets to cater for expat pensioners because that would give guys like Paul Hogan a tax break.

 

A common sense option would be to exempt pensions / pensioners, but nowhere in the proposed changes is that mentioned.  Surely that is by design, so one must ask, why?

 

You mentioned the APA.  Did they make a submission during the recent consultation phase?  If not, they should have, but as I said, why would they represent non members?  

 

I have been very clear what I am basing my opinion on.  In summary, and this has been backed up by many links, youtube clips, and quoting relevant law, the pension is deemed an income at law.  One will automatically be deemed a non resident for tax purposes after being outside of Australia for 183 days.  There are no exemptions or means testing in the proposed changes.  There is no tax free threshold in non resident tax brackets.  Article 18 in the DTA relies on the provisions of Article 19.  (as I said in the other thread, more research is needed on these articles in the DTA)  These are what I am basing my opinion on. 

 

When it's in black and white, I don't think it's a "leap." 

 

Other than the "that's just for guys like Paul Hogan" and the "pensioners would be up in arms" argument, can you post what you are basing your opinion on?  Is it just hope? 

[TroubleandGrumpy]

2 hours ago, KhunHeineken said:

In my opinion, resident pensioners will not care about non resident pensioners.  Why should they?  There's nothing in the proposed changes that impact them. 

 

How many expat pensioners are members of the APA?  Why did you stop being a member?  Why would the APA care about non member pensioners? 

 

It could all be a moot point anyway, if it's not an election issue. 

It is not about an election commitment. It is about the Government moving forward with a proposal/initiative. Prior to the Govt moving forward with any proposal/initiative, they seek input and opinions (from many sources), and that can include leaking the proposal/inititive to the media to see the reactions. The APA and other Pensioner groups will have issues and questions IMO, as will other groups - like those involved with the International Social Security Conventions, and many others I have no time to think about now, and dont know about. That is how Govt works (I was involved in that) - it is not about presenting everything at an election every years.

[TroubleandGrumpy]

2 hours ago, KhunHeineken said:

Yes, I am aware why the policy exists.  I have posted about it previously.  You state it's financially beneficial for the government to pay pensions when the person is living overseas.

 

I asked you, if that's the case, why do they enforce the 2 year qualification for portability?  Wouldn't it be financially beneficial to just pay them the pension when they reach pension age and hope they stay outside of Australia?  Why force them back to Australia for 2 years, if a pensioner living in Australia is a bigger loss? 

 

Could it be there is some substance in the reasons I mentioned the government would like that pension money circulating within the Australian economy, for the taxes and flow on effect, and not growing a foreign country's economy? 

No - sorry but you are wrong. Check this out :_ The ILO Social Security (Minimum Standards) Convention, 1952 (No. 102) | International Labour Organization

 

[TroubleandGrumpy]

1 hour ago, KhunHeineken said:

I accept your opinion is different to mine, which is fine.  I am just trying to understand what you are basing your opinion on.  Did you read a clause somewhere in the proposed changes?  Are you relying on the DTA?  Do you think the government will amend the proposed changes so pensions / pensioners do not pay non resident tax?

 

Where in the proposed changes do you see an exemption for pensioners? 

 

Where in the non resident tax brackets do you see a tax free threshold? 

 

I agree with you it's not the intent of government to tax expat pensioners.  I have said many times on the other thread, "pensioners may very well be collateral damage."  Obviously, the proposed changes are not designed to target pensioners, but I see nothing in the proposed changes differentiating between pensioners and guys like Paul Hogan, hence, my opinion that pensioners may just be caught up in it. 

 

The way I see it, the government will not introduce a tax free threshold to non resident tax brackets to cater for expat pensioners because that would give guys like Paul Hogan a tax break.

 

A common sense option would be to exempt pensions / pensioners, but nowhere in the proposed changes is that mentioned.  Surely that is by design, so one must ask, why?

 

You mentioned the APA.  Did they make a submission during the recent consultation phase?  If not, they should have, but as I said, why would they represent non members?  

 

I have been very clear what I am basing my opinion on.  In summary, and this has been backed up by many links, youtube clips, and quoting relevant law, the pension is deemed an income at law.  One will automatically be deemed a non resident for tax purposes after being outside of Australia for 183 days.  There are no exemptions or means testing in the proposed changes.  There is no tax free threshold in non resident tax brackets.  Article 18 in the DTA relies on the provisions of Article 19.  (as I said in the other thread, more research is needed on these articles in the DTA)  These are what I am basing my opinion on. 

 

When it's in black and white, I don't think it's a "leap." 

 

Other than the "that's just for guys like Paul Hogan" and the "pensioners would be up in arms" argument, can you post what you are basing your opinion on?  Is it just hope? 

Sorry - but you are unecessarily raising frivolous 'arguments' and unrelated issues regarding the point.   You have formed an opinion and refuse to accept that you could be wrong and are demanding that I prove I am right - on your terms. That is not how it works - I have my opinions and I am not going to prove why I am right to have those opinions.  This is not a Court of Law and I am not being charged with the crime of disagreeing with you - I do not have to prove anything to you or to anyone else.

 

May I suggest that you just accept that I have my opinion and that you have yours, and as far as we are both concerned, they are valid opinions.  There is no right and wrong here - this is just about a difference of opinion.  You dont have to explain yours to me, and I dont have to explain mine to yours. If we each provide some reasons why, then that is all that is required.

[Will27]

45 minutes ago, TroubleandGrumpy said:

Sorry - but you are unecessarily raising frivolous 'arguments' and unrelated issues regarding the point.   You have formed an opinion and refuse to accept that you could be wrong and are demanding that I prove I am right - on your terms. That is not how it works - I have my opinions and I am not going to prove why I am right to have those opinions.  This is not a Court of Law and I am not being charged with the crime of disagreeing with you - I do not have to prove anything to you or to anyone else.

 

May I suggest that you just accept that I have my opinion and that you have yours, and as far as we are both concerned, they are valid opinions.  There is no right and wrong here - this is just about a difference of opinion.  You dont have to explain yours to me, and I dont have to explain mine to yours. If we each provide some reasons why, then that is all that is required.

That's why the majority of people have dropped off from posting.

[KhunHeineken]

On 5/10/2024 at 3:03 AM, TroubleandGrumpy said:

It is not about an election commitment. It is about the Government moving forward with a proposal/initiative. Prior to the Govt moving forward with any proposal/initiative, they seek input and opinions (from many sources), and that can include leaking the proposal/inititive to the media to see the reactions. The APA and other Pensioner groups will have issues and questions IMO, as will other groups - like those involved with the International Social Security Conventions, and many others I have no time to think about now, and dont know about. That is how Govt works (I was involved in that) - it is not about presenting everything at an election every years.

I agree, and that's what the current Labor government did.  They continued on with the Liberal government's proposed changes and moved them onto the consultation phase. 

 

Here it is again.  Consultation closed in September 2023, so I suggest implementation is not so far away. 

 

 https://treasury.gov.au/sites/default/files/2023-07/c2023-205344-cp.pdf

 

At the consultation phase, any interested party can make a submission.  Did the APA make a submission?  Was it in the media?  Were pensioner "up in arms?" 

 

I posted about it to show members that Labor were moving forward with it, after some members thought an Albo government will kill off the proposed changes.  Well, clearly, they are very much alive and well under Labor. 

 

Once again, another credible link which goes towards the hypothesis or "opinion" that I have formed on this matter. 

[KhunHeineken]

On 5/10/2024 at 3:04 AM, TroubleandGrumpy said:

No - sorry but you are wrong. Check this out :_ The ILO Social Security (Minimum Standards) Convention, 1952 (No. 102) | International Labour Organization

 

Thanks for the new content. 

 

Can you elaborate on how this ties in with the proposed changes to the tax residency laws? 

 

Are you suggesting that the Australian aged pension, once taxed at the non resident tax rate of 32.5% then breaches the minimum amount as set out by the minimum standards in the link?  

 

 

[TroubleandGrumpy]

21 minutes ago, KhunHeineken said:

I agree, and that's what the current Labor government did.  They continued on with the Liberal government's proposed changes and moved them onto the consultation phase. 

 

Here it is again.  Consultation closed in September 2023, so I suggest implementation is not so far away. 

 

 https://treasury.gov.au/sites/default/files/2023-07/c2023-205344-cp.pdf

 

At the consultation phase, any interested party can make a submission.  Did the APA make a submission?  Was it in the media?  Were pensioner "up in arms?" 

 

I posted about it to show members that Labor were moving forward with it, after some members thought an Albo government will kill off the proposed changes.  Well, clearly, they are very much alive and well under Labor. 

 

Once again, another credible link which goes towards the hypothesis or "opinion" that I have formed on this matter. 

Yes I agree, and they are definitely moving towards a domicile based tax residency and closing all the old 'association with' type complications that allow some people to keep their tax residency (and thus the tax free threshold).

But that does not mean that they will be taxing age pensions for overseas located Expats, because this change is very much focussed towards stopping those earning money and aying less tax than they should. 

Sure the law of unintended consequences could occur. But remember that under the current rules, anyone away from Aust for 2+ years is not a tax resident unless they have a lot of 'associations', but even then after 5 years it is all over. And no Exat located overseas is currently taxed on their Pensions.

[KhunHeineken]

On 5/10/2024 at 3:09 AM, TroubleandGrumpy said:

Sorry - but you are unecessarily raising frivolous 'arguments' and unrelated issues regarding the point.   You have formed an opinion and refuse to accept that you could be wrong and are demanding that I prove I am right - on your terms.

I disagree. 

 

I have put forward public information, in the form of many credible links, media releases, youtube clips, extracts of law,  and the opinions of professionals.  I have formed my opinion based on this research. 

 

One thing I will not be swayed on is the the passing of the laws.  In my opinion, it is only when, not if.  I will stand by that opinion and will not budge from it, and I have given my reasons. 

 

Other parts I am happy to listen to the opinions of others.  If they have a compelling argument, it may indeed change my own opinion, but I have to say, comments like, "that's only for guys like Paul Hogan" and "I still have a Medicare Card so I am still a resident" as well as many other ridiculous comments don't hold much weight with me, and in fact, are just plain humorous. 

 

The proposed changes have not been implemented as yet, so no one knows what they will finally look like, and what method of enforcement will be used.  I have put forward some ideas, and admitted they were just possibilities for the government, not necessarily my opinion on the matter. 

 

On the point of enforcement, as mentioned previously, there's not much to enforce when the payer (Centerlink) is also the taxer (ATO) using Immigration data.  All three are government departments, so the non resident tax is simply withheld from fortnightly pensions, thus, automatic compliance, and no need for any enforcement.  The physical presence and time based residency model makes it that easy.  Computer data bases do all the heavy lifting.

 

On 5/10/2024 at 3:09 AM, TroubleandGrumpy said:

I have my opinions and I am not going to prove why I am right to have those opinions. 

I didn't ask you to prove anything. I never suggested you are right and I am wrong.  Or I am right and you are wrong.   I simply asked what are you basing your opinion on.  I am trying to see things through your eyes. 

 

On 5/10/2024 at 3:09 AM, TroubleandGrumpy said:

May I suggest that you just accept that I have my opinion and that you have yours, and as far as we are both concerned, they are valid opinions.  There is no right and wrong here - this is just about a difference of opinion.  You dont have to explain yours to me, and I dont have to explain mine to yours. If we each provide some reasons why, then that is all that is required.

I agree.

 

The discussion has moved a long way from "that's only for guys like Paul Hogan."  Do you agree with the "Paul Hogan" opinion?  I don't, and I have stated my reasons. 

 

Not everything posted on here is right, and not everything posted on here is wrong.  There's nothing wrong with discussing all comments.  The internet and freedom of speech is a great learning tool. 

 

I personally hope pensioners do not have to pay non resident tax, but time will tell.  

 

Once again, I was only asking you what you were basing your opinion on. Hopefully, something of more substance than the "Paul Hogan" opinion. 

[TroubleandGrumpy]

21 minutes ago, KhunHeineken said:

Thanks for the new content. 

 

Can you elaborate on how this ties in with the proposed changes to the tax residency laws? 

 

Are you suggesting that the Australian aged pension, once taxed at the non resident tax rate of 32.5% then breaches the minimum amount as set out by the minimum standards in the link?  

That was provided to you as an example of the sort of matter that some people will get active about when the Govt decides to look into changing anything that affects those receiving social welfare.

So far in all the documents I have seen, there is no statement that their aim is to tax overseas pensioners. But if that was to occur, then I am certain that many 'groups' will resond, at home and overseas, and that ILO Convention will but one of the many things that will be taken into account.

[KhunHeineken]

On 5/10/2024 at 3:56 AM, Will27 said:

That's why the majority of people have dropped off from posting.

As another member suggested, there was a core group of "haters", or possibly the same person with multiple usernames, who may have been working for AN's major competitor. 

 

They seek to have posts removed, members banned, threads closed etc in order to push people to the other website.  There was consistently zero content from them.  Only baiting, flaming, abuse, trolling etc.   

 

As I have said before, the proposed changes to tax residency laws is the single biggest issue facing expat pensioners in years, and I stand by that comment.  Others have suggested it's portability, but that is nothing new, and you have to do your 2 years, it's as simple as that. 

 

It's only through discussion do we get to move past the "that's only for guys like Paul Hogan" and "I still have a Medicare Card so I am still a resident for tax purposes"  misinformation. 

[TroubleandGrumpy]

4 minutes ago, KhunHeineken said:

I disagree. 

 

I have put forward public information, in the form of many credible links, media releases, youtube clips, extracts of law,  and the opinions of professionals.  I have formed my opinion based on this research. 

 

One thing I will not be swayed on is the the passing of the laws.  In my opinion, it is only when, not if.  I will stand by that opinion and will not budge from it, and I have given my reasons. 

 

Other parts I am happy to listen to the opinions of others.  If they have a compelling argument, it may indeed change my own opinion, but I have to say, comments like, "that's only for guys like Paul Hogan" and "I still have a Medicare Card so I am still a resident" as well as many other ridiculous comments don't hold much weight with me, and in fact, are just plain humorous. 

 

The proposed changes have not been implemented as yet, so no one knows what they will finally look like, and what method of enforcement will be used.  I have put forward some ideas, and admitted they were just possibilities for the government, not necessarily my opinion on the matter. 

 

On the point of enforcement, as mentioned previously, there's not much to enforce when the payer (Centerlink) is also the taxer (ATO) using Immigration data.  All three are government departments, so the non resident tax is simply withheld from fortnightly pensions, thus, automatic compliance, and no need for any enforcement.  The physical presence and time based residency model makes it that easy.  Computer data bases do all the heavy lifting.

 

I didn't ask you to prove anything. I never suggested you are right and I am wrong.  Or I am right and you are wrong.   I simply asked what are you basing your opinion on.  I am trying to see things through your eyes. 

 

I agree.

 

The discussion has moved a long way from "that's only for guys like Paul Hogan."  Do you agree with the "Paul Hogan" opinion?  I don't, and I have stated my reasons. 

 

Not everything posted on here is right, and not everything posted on here is wrong.  There's nothing wrong with discussing all comments.  The internet and freedom of speech is a great learning tool. 

 

I personally hope pensioners do not have to pay non resident tax, but time will tell.  

 

Once again, I was only asking you what you were basing your opinion on. Hopefully, something of more substance than the "Paul Hogan" opinion. 

That is a lot to respond to but I will give you two answers, while still saying you could be right and I could be wrong.

1.  There is nothing in any document or website or anywhere I am aware of that says the Govt is going to tax pensioners living overseas.  That is all your opinion that it will happen.

2.  20+ years working in Canberra means I understand how it works (a lot). I have given presos and proposals to House and Senate Committees and other bodies, who were going through the 'development' stages of changing or adding a new Law/Rule.

[KhunHeineken]

13 minutes ago, TroubleandGrumpy said:

Yes I agree, and they are definitely moving towards a domicile based tax residency and closing all the old 'association with' type complications that allow some people to keep their tax residency (and thus the tax free threshold).

I am slightly confused by this comment. 

 

They are moving away from domiciled based residency system and moving towards a physical presence and time based tax residency model. 

 

When the changes come in, no longer can you have a house in Australia that you say is your "domicile" therefore maintain residency for tax purposes when you live in Thailand and haven't been back to Australia in years.  The "I'm just on a long holiday" method will be no more. 

 

Inside Australia 183 days, resident.  Outside Australia 183 days, non resident.  Which country you live in, where you own property etc will mean nothing if you are outside of Australia for 183 days.

 

18 minutes ago, TroubleandGrumpy said:

But that does not mean that they will be taxing age pensions for overseas located Expats, because this change is very much focussed towards stopping those earning money and aying less tax than they should. 

I have said on many occasions, pensioners may very well be collateral damage in this.  I have given my reasons.  Basically, I don't see anything in the proposed changes that gives pensioners a tax break.  No exemptions, means testing, tax free threshold added to non resident tax brackets. 

 

Time will tell if Labor tweak the proposed changes to add an exemption, which they should. 

 

20 minutes ago, TroubleandGrumpy said:

Sure the law of unintended consequences could occur. But remember that under the current rules, anyone away from Aust for 2+ years is not a tax resident unless they have a lot of 'associations', but even then after 5 years it is all over. And no Exat located overseas is currently taxed on their Pensions.

Once again, all set to change to 183 days, backed up by the immigration data base.  No reviews.  No appeals. 

 

I have admitted previously I, and many Aussie friends, are using the loopholes in the current 90 year old tax residency laws.  As far as the ATO is concerned, I am "domiciled" in Australia.  I have maintained all the "associations" you have mentioned and have never paid non resident tax.  

 

The proposed changes will scoop me up, but with the pension being deemed an income, and a pensioner being outside of Australia for 183 days, and no exemptions in place, I am wondering where they will get their tax break from.  Some have suggested the DTA, and I am research more about this. 

 

I, and some friends, show an interest in this because we may very well completely restructure our finances in the future.