Australian Aged Pension

[Brickbat]

Mate....

1- We are all imports. Unless you are an Ab-Original

2- why on earth would you cash in your Super. Income from Super after 60 , upto 1.6 million , is TAX FREE. After that amount, 1.6 million,  the <deleted> decided to tax super income at 15%. As of last year.

3- I agree, the system is badly flawed. But who the hell are we getting in as next PM. Another Labour who is already promising shitloads to the “ needy”. Not that I have much respect for how the Libs have behaved. But to be fair, ScotMo is promising a budget in surplus. Unlike the Labour jackasses. Who only know how to spend, spend, spend. And Rudd blew shitloads. 

4- The population is aging, so it’s the “ imports” who are picking up the slack . Something like the Myanmar do here in Thailand. 

5- There is no easy answer as the Govt does care for the needy. While a very commendable attribute, it lends itself to abuse.

6- We are about to see a Financial Crisis that will be crippling. Batten the hatches, boys. 

[metisdead]

Off topic posts and replies regarding US politics have been removed. 

[David Walden]

On 12/18/2018 at 7:57 PM, Brickbat said:

Mate....

1- We are all imports. Unless you are an Ab-Original

2- why on earth would you cash in your Super. Income from Super after 60 , upto 1.6 million , is TAX FREE. After that amount, 1.6 million,  the <deleted> decided to tax super income at 15%. As of last year.

3- I agree, the system is badly flawed. But who the hell are we getting in as next PM. Another Labour who is already promising shitloads to the “ needy”. Not that I have much respect for how the Libs have behaved. But to be fair, ScotMo is promising a budget in surplus. Unlike the Labour jackasses. Who only know how to spend, spend, spend. And Rudd blew shitloads. 

4- The population is aging, so it’s the “ imports” who are picking up the slack . Something like the Myanmar do here in Thailand. 

5- There is no easy answer as the Govt does care for the needy. While a very commendable attribute, it lends itself to abuse.

6- We are about to see a Financial Crisis that will be crippling. Batten the hatches, boys. 

8

Was it 1st of Jan 2015 when the libs introduced a tax on super by stealth.   If you had super prior to that date it was in a tax-free environment, the Govt says it still is but that is all BS.  The Gov introduced on tax of 15% on profits generated within your fund on that date.  It was deducted by the Super funds directly and forwarded to the tax dept. without you even knowing how much.  The taxman decided what your profit was and that payment is/was deducted from your fund without you knowing how much.  Those that had funds in super prior to that date 01/01/2015 these funds were grandfathered and the 15% was not payable (like me I think?)  All new super dividend from that date included the deduction of this 15% stealth tax before any profits were declared.  In my opinion probably one of the most deceitful actions taken by a govt in recent times.  After a 100 years of telling people that money in Super is in a tax free environment, it is all BS.   Yes, if you have a very modest amount of super where you would not have paid tax and using the tax-free threshold pensioners tax rate (about Aus $32,000 p/y) you are now are paying 15% on profits within the fund and most think it is free, don't know anything about it? ( bad luck if you have some tax offset credits)  This tricky way the Govt can tell people that your retirement fund dividends are not subject to income tax, a bit like the 3 card trick.  A Clayton's tax-free environment, like the taxfree environment you get when you don't get a tax-free environment  Most pensioners have just accepted it just like sheep to the slaughter.  Yes, 15% stealth tax from  $00 to $1.600,000 that just disappeared.

   If you have a modest amount of Money to invest you may be better off if you just buy investment units and keep your money outside a super fund (lots now doing this).  If you had a pension as a single person and $200,000 invested and received a 6% dividend of $12,000 on top of your pension no tax would be payable on any of your income, or maybe a little?  But certainly, not 15% which would amount to Aus $1,800

Edited January 21, 2019 by David Walden

[David Walden]

4 hours ago, David Walden said:

Was it 1st of Jan 2015 when the libs introduced a tax on super by stealth.   If you had super prior to that date it was in a tax-free environment, the Govt says it still is but that is all BS.  The Gov introduced on tax of 15% on profits generated within your fund on that date.  It was deducted by the Super funds directly and forwarded to the tax dept. without you even knowing how much.  The taxman decided what your profit was and that payment is/was deducted from your fund without you knowing how much.  Those that had funds in super prior to that date 01/01/2015 these funds were grandfathered and the 15% was not payable (like me I think?)  All new super dividend from that date included the deduction of this 15% stealth tax before any profits were declared.  In my opinion probably one of the most deceitful actions taken by a govt in recent times.  After a 100 years of telling people that money in Super is in a tax free environment, it is all BS.   Yes, if you have a very modest amount of super where you would not have paid tax and using the tax-free threshold pensioners tax rate (about Aus $32,000 p/y) you are now are paying 15% on profits within the fund and most think it is free, don't know anything about it? ( bad luck if you have some tax offset credits)  This tricky way the Govt can tell people that your retirement fund dividends are not subject to income tax, a bit like the 3 card trick.  A Clayton's tax-free environment, like the taxfree environment you get when you don't get a tax-free environment  Most pensioners have just accepted it just like sheep to the slaughter.  Yes, 15% stealth tax from  $00 to $1.600,000 that just disappeared.

   If you have a modest amount of Money to invest you may be better off if you just buy investment units and keep your money outside a super fund (lots now doing this).  If you had a pension as a single person and $200,000 invested and received a 6% dividend of $12,000 on top of your pension no tax would be payable on any of your income, or maybe a little?  But certainly, not 15% which would amount to Aus $1,800

Just to clarify the issue the super policies prior to 01/01/2015 still retain the tax-free environment they are grandfathered.  It is only the new policies from that date which attract the new stealth tax of 15%.  The govt has endeavored to introduce this tax in a way thus avoids a backlash.  It is only those new investments from 01/01/2015 that attract new stealth tax of 15%.  

Edited January 21, 2019 by David Walden

[LosLobo]

David, with respect, your last two posts have nothing to do with the AAP.

 

In fact I found them misleading. 

 

They only apply to a super account before the pension phase.

 

If your super account is in the retirement phase (that is drawing a retirement income stream), then the earnings on the savings in your pension account are exempt from tax, including capital gains.

 

Edited January 22, 2019 by LosLobo

[David Walden]

12 hours ago, LosLobo said:

David, with respect, your last two posts have nothing to do with the AAP.

 

In fact I found them misleading. 

 

They only apply to a super account before the pension phase.

 

If your super account is in the retirement phase (that is drawing a retirement income stream), then the earnings on the savings in your pension account are exempt from tax, including capital gains.

 

Yes, that is correct the dividends are tax free but the Govt has taken the 15% tax on profits on the investment funds prior to making the dividend available to the investment holder.  It is a bit like a 15% GST on super fund profits that you don't know anything about.  It is being introduced over time you will not know it's happening.  It is almost a secret.  You can get no tax credits if you are under the tax threshold or losing money on an investment gone bad.  All Super investments that are taken out after the 01/01/2015 are subject to this new requirement.  If it was introduced to all existing super investment at the time of introduction there would have been a super revolt by pensioners and retirement fund owners and been a major election issue in the following election.  The super funds also kept it quiet.  The labor party did not use it in their election campaign which suggests that collusion has occurred and there has been a bipartisan decision between the libs and labour in Australia.  All super investments in place or prior to this date at that time of introduction were not subject to this look-a-like 15% GST on super.  It kept the small investors happy.  Still very good for those with super around $1.6 million outside Super. It all went ahead unnoticed with both major political parties accepting it.  All further Super funds created after 01/01/2015 are subject to the look-a-like 15% GST tax.  My super is grandfathered as it was taken out prior to 01/01/2015.  It may be better now to buy investment bonds in the same as super bonds from your investment fund and keep them outside the Super funds as many people are already doing.  If you have a super investment of $200.000 and receive a 6% dividend of $12,000  then you will pay $1800 tax by stealth and will not even know it's happening.  Your dividends on your $200.000 investment account will keep you at a point with the AAP tax threshold and just under the point where you will need to pay any tax at all.  about $32,000 for a single person.  The Government is collecting billions of dollars each year from super funds and like lambs to the slaughter by stealth, we just accept it.  They said it would never happen for a hundred years

PS... there is a higher tax threshold for people receiving the AAP of about $32,000 per year so taxation issues are relivant to my discussions on this subject and other posts I have made. 

Edited January 22, 2019 by David Walden

[LosLobo]

8 hours ago, David Walden said:

Yes, that is correct the dividends are tax free but the Govt has taken the 15% tax on profits on the investment funds prior to making the dividend available to the investment holder.  

No,  no tax is deducted from investment fund profits prior to making the dividend available to pension members.

[David Walden]

1 hour ago, LosLobo said:

No,  no tax is deducted from investment fund profits prior to making the dividend available to pension members.

Looks like they have fooled you as well.  Prior to the 01/01/2015 in Nov and Dec there was almost out of control of activity in the retirement funds industry to get your super in place or add to it before this new stealth tax was introduced so it could be grandfathered and not attract this new stealth tax.  The retirement funds are now required to deduct this 15% GST look-a-like tax before the profits are distributed...and they don't have to tell the customer how much, it's just an operating cost.

[Brickbat]

There is no “ grandfathering”. It’s very simple, and PAINFUL. In my last tax return, which is in retirement phase, income from up to 1.6 million is tax free. Income from the rest was taxed at 15% .

And listening to some hardcore lawyer who is advising the labor party,  it’s about to be whacked even more, if they buy her suggestions. 

[David Walden]

5 hours ago, Brickbat said:

There is no “ grandfathering”. It’s very simple, and PAINFUL. In my last tax return, which is in retirement phase, income from up to 1.6 million is tax free. Income from the rest was taxed at 15% .

And listening to some hardcore lawyer who is advising the labor party,  it’s about to be whacked even more, if they buy her suggestions. 

Sorry but you are so far away from the facts that there is no point pursuing this issue further

[Brickbat]

47 minutes ago, David Walden said:

Sorry but you are so far away from the facts that there is no point pursuing this issue further

There is NOTHING more factual than an ATO return. What are you pursuing....entertainment?

[LosLobo]

8 hours ago, David Walden said:

Looks like they have fooled you as well.  Prior to the 01/01/2015 in Nov and Dec there was almost out of control of activity in the retirement funds industry to get your super in place or add to it before this new stealth tax was introduced so it could be grandfathered and not attract this new stealth tax.  The retirement funds are now required to deduct this 15% GST look-a-like tax before the profits are distributed...and they don't have to tell the customer how much, it's just an operating cost.

David with respect.....

 

Obviously besides me they fooled AustralianSuper with over 2.2 million members and Superguide as well.

 

Refer attached links:

Tax transparency report.pdf

https://www.superguide.com.au/superannuation-topics/earnings-tax

 

Actually this tax on super (accumulation phase) was implemented before 2009 not 2015 as you stated.

 

Refer to a report dated Feb 2009 where the tax is already included:

http://www.tai.org.au/system/files_force/super_tax_concessions_final_7.pdf

 

On 1st January 2015, AAP income deeming and both income/asset testing were universally implemented with grandfathering for pensioners with super schemes (pension phase) before this date. This was the reason for the "almost out of control of activity in the retirement funds industry to get your super in place". Not the reason you stated.

 

Refer attached link:

https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/age-pension/deeming-information

 

You are always in denial that deeming and both income/asset testing were ever implemented and bombard people with your "$465k financial asset threshold for the full AAP" fantasy.

 

Maybe this forum is not ready for fairy tales...….

 

With any rebuttal, hard evidence to the contrary would be appreciated....

 

 

Edited January 23, 2019 by LosLobo

[David Walden]

1 hour ago, LosLobo said:

David with respect.....

 

Obviously besides me they fooled AustralianSuper with over 2.2 million members and Superguide as well.

 

Refer attached links:

Tax transparency report.pdf

https://www.superguide.com.au/superannuation-topics/earnings-tax

 

Actually this tax on super (accumulation phase) was implemented before 2009 not 2015 as you stated.

 

Refer to a report dated Feb 2009 where the tax is already included:

http://www.tai.org.au/system/files_force/super_tax_concessions_final_7.pdf

 

On 1st January 2015, AAP income deeming and both income/asset testing were universally implemented with grandfathering for pensioners with super schemes (pension phase) before this date. This was the reason for the "almost out of control of activity in the retirement funds industry to get your super in place". Not the reason you stated.

 

Refer attached link:

https://www.dss.gov.au/our-responsibilities/seniors/benefits-payments/age-pension/deeming-information

 

You are always in denial that deeming and both income/asset testing were ever implemented and bombard people with your "$465k financial asset threshold for the full AAP" fantasy.

 

Maybe this forum is not ready for fairy tales...….

 

With any rebuttal, hard evidence to the contrary would be appreciated....

 

 

If you still believe that the assets threshold for the AAP for a person who does not own a house is not $465,500 (maybe gone up a bit in the last few weeks).  Then you clearly do not understand Centrelink's AAP information.  Not much point still posting further with you.

[LosLobo]

On ‎1‎/‎24‎/‎2019 at 1:47 AM, David Walden said:

If you still believe that the assets threshold for the AAP for a person who does not own a house is not $465,500 (maybe gone up a bit in the last few weeks).  Then you clearly do not understand Centrelink's AAP information.  Not much point still posting further with you.

I believe that the asset threshold for the full AAP for a single person who does not own a house is $465,500.

 

I also believe that the financial asset (no other assets) threshold for the full AAP for a single person owning a house or not is $161,200.  ????

 

Clearly I do understand Centrelink's AAP information!

 

Yes clearly there is not much point in you posting any further!

Edited January 28, 2019 by LosLobo

[4MyEgo]

On 1/29/2019 at 12:30 AM, LosLobo said:

I believe that the asset threshold for the full AAP for a single person who does not own a house is $465,500.

 

I also believe that the financial asset (no other assets) threshold for the full AAP for a single person owning a house or not is $161,200.  ????

 

Clearly I do understand Centrelink's AAP information!

 

Yes clearly there is not much point in you posting any further!

Here we go again.........

 

Loslobo while I find both yours and David's post to be full of information, removing the angst, can you elaborate on the above "please" for this layman.

 

So there is an "asset" threshold of $465,500 for a bloke who doesn't own a property...."got it"

 

It's the "financial asset" part of $161,200 that I don't get, i.e. isn't an asset, an asset, I am trying to differentiate between the two, call me thick if you like, but I would really like to know the difference between the two, if you could please elaborate.

 

 

[LosLobo]

17 minutes ago, 4MyEgo said:

Here we go again.........

 

Loslobo while I find both yours and David's post to be full of information, removing the angst, can you elaborate on the above "please" for this layman.

 

So there is an "asset" threshold of $465,500 for a bloke who doesn't own a property...."got it"

 

It's the "financial asset" part of $161,200 that I don't get, i.e. isn't an asset, an asset, I am trying to differentiate between the two, call me thick if you like, but I would really like to know the difference between the two, if you could please elaborate.

 

 

Centrelink will particularly look at your financial assets and deem them. Then they will do an income test.
Then they will look at your total assets (financial and non financial assets) and do an assets test.
Then they will compare your income and assets test, the one that pays the least will be your pension.

If you only have financial assets the cut-off point for full pension will be $161k.

If you only have non financial assets the cut-off point for the full pension will be $465k.

 

[4MyEgo]

1 minute ago, LosLobo said:

Centrelink will particularly look at your financial assets and deem them. Then they will do an income test.
Then they will look at your total assets (financial and non financial assets) and do an assets test.
Then they will compare your income and assets test, the one that pays the least will be your pension.

If you only have financial assets the cut-off point for full pension will be $161k.

If you only have non financial assets the cut-off point for the full pension will be $465k.

 

It's a bit contradictory if you ask me, i.e. on one hand they are saying, you can have $465,500 in assets, be it financial or other is you do not own a property.

 

Then they say if you invest that money in the bank for example and have more than $161,000 we will deem you and reduce your pension. I think that is what you are saying, so the $465,500 threshold is nothing but a farce, what about home-owners do they deem them as well ?

[LosLobo]

23 minutes ago, 4MyEgo said:

It's a bit contradictory if you ask me, i.e. on one hand they are saying, you can have $465,500 in assets, be it financial or other is you do not own a property.

 

Then they say if you invest that money in the bank for example and have more than $161,000 we will deem you and reduce your pension. I think that is what you are saying, so the $465,500 threshold is nothing but a farce, what about home-owners do they deem them as well ?

Yes most people would have more financial assets than they would have non performing non financial assets. The deeming encourages people to invest in high performing investments because they can keep the money they make above the deeming rates. The 465k threshold would not have many players. Mainly those grandfathered to the pre 2015 rules. The 465k threshold is a bit of a red herring and confuses a lot of people.

Yes deeming affects both home owners and non homeowners equally.

 

Edited February 1, 2019 by LosLobo

[LosLobo]

I would suggest to anyone who is still confused about the AAP to use this pension calculator.

It perfectly models the current AAP legislation. It also includes the "work bonus"

 

http://www.yourpension.com.au/APCalc/

Edited February 1, 2019 by LosLobo

[LosLobo]

3 hours ago, 4MyEgo said:

I am trying to differentiate between the two, call me thick if you like, but I would really like to know the difference between the two, if you could please elaborate.

The attached link will help you differentiate between financial and non financial assets :

 

https://www.dva.gov.au/factsheet-is89-deeming-and-financial-assets

 

 

[4MyEgo]

37 minutes ago, LosLobo said:

The attached link will help you differentiate between financial and non financial assets :

 

https://www.dva.gov.au/factsheet-is89-deeming-and-financial-assets

 

 

Thanks for that LosLobo hit the nail on the head for me for deeming.

 

But I am still confused as to why Centrelink will allow you to have $565,500 as a threshold as a non home owner ?

 

I get the deeming part, i.e. up to $51,200 it's saying you earn xyz at the deemed market rate on your investment, a higher rate over that.

 

But the $565,500 question is: why have this threshold, what does it represent ?

[4MyEgo]

2 hours ago, LosLobo said:

I would suggest to anyone who is still confused about the AAP to use this pension calculator.

It perfectly models the current AAP legislation. It also includes the "work bonus"

 

http://www.yourpension.com.au/APCalc/

I did the calculator and it worked like you said, so they give you a threshold in one hand, but take it with the other, well, some of it.

 

It's still not that bad if you have the threshold amount and declare the $465,500, you end up with $717 as a single.

 

Thanks for all your help, very helpful information.

[LosLobo]

46 minutes ago, 4MyEgo said:

I did the calculator and it worked like you said, so they give you a threshold in one hand, but take it with the other, well, some of it.

 

It's still not that bad if you have the threshold amount and declare the $465,500, you end up with $717 as a single.

 

Thanks for all your help, very helpful information.

Why are you declaring $465,500 as your investment.

I think this is reinforcing the confusion about the general asset threshold of $465,500.

Why not say use just $500,000 as your hypothetical investment amount.
 

[4MyEgo]

36 minutes ago, LosLobo said:

Why are you declaring $465,500 as your investment.

I think this is reinforcing the confusion about the general asset threshold of $465,500.

Why not say use just $500,000 as your hypothetical investment amount.
 

Ok, so are you saying, to forget about the threshold and just put in what amount you think you will have as investments and allow deeming to take over as a guide ?

[LosLobo]

2 hours ago, 4MyEgo said:

But I am still confused as to why Centrelink will allow you to have $565,500 as a threshold as a non home owner ?

But the $565,500 question is: why have this threshold, what does it represent ?

Actually $465,500.

 

I don't have much experience with assessment by the assets test as I mainly have financial investments.

 

I can only assume that :

 

There still would be some people who have assets like a shack, unrented houses, stamp, art, vintage car collections which don't generate any income. 

 

These people are asset rich but income poor. 

 

Should their pension be reduced, how would they live? 

Maybe in the future these people may be forced to liquidate these assets if they are getting the pension.

 

Others might have rental investment properties but their value would be offset by the income generated from them and be income tested as well.

 

Maybe non home owners need more assistance as rents paid in Australia now are over the top but they should also get some relief in deeming thresholds as well.
 

Edited February 1, 2019 by LosLobo

[David Walden]

3 hours ago, 4MyEgo said:

I did the calculator and it worked like you said, so they give you a threshold in one hand, but take it with the other, well, some of it.

 

It's still not that bad if you have the threshold amount and declare the $465,500, you end up with $717 as a single.

 

Thanks for all your help, very helpful information.

Rubbish

[4MyEgo]

5 minutes ago, David Walden said:

Rubbish

Ok David, would you like to provide me with your version, thx

[tifino]

The individual doesn't have any control (say) over whether The Test is Asset Based or an Income one. 

[LosLobo]

47 minutes ago, tifino said:

The individual doesn't have any control (say) over whether The Test is Asset Based or an Income one. 

Centrelink will perform both the income and asset tests based on your application information and the pension will be determined by the one with the least amount payable.

[David Walden]

Ahhhhh!