Australian Aged Pension

[Nemises]

^ mate, I’m presently located in a stock-raising Aus country town that has a CBA bank with friendly staff. Want me to ask them for their email addy? Tell them you have friends there and that you’re wanting to establish your business in their district . I’m sure that they’ll then help with your q’s!

[kevvy]

This is the best site regarding Disability and old age pension in Australia.The people here know so much about the law ...

dspoverseas.proboards.com › Forum

[scorecard]

1 hour ago, kevvy said:

This is the best site regarding Disability and old age pension in Australia.The people here know so much about the law ...

dspoverseas.proboards.com › Forum

Thanks for the link.

 

My interest is in DVA pensions (Service Pension and Disability Pension etc.), I searched the site you quoted but it seems it's devoted specifically to centrelink based matters.

 

Any comments?

 

 

[kevvy]

1 hour ago, scorecard said:

Thanks for the link.

 

My interest is in DVA pensions (Service Pension and Disability Pension etc.), I searched the site you quoted but it seems it's devoted specifically to centrelink based matters.

 

Any comments?

 

 

Join the membership (free) and there is someone that would help you ,especially if you are disabled.Just start a thread and they will help .

[scorecard]

3 hours ago, kevvy said:

Join the membership (free) and there is someone that would help you ,especially if you are disabled.Just start a thread and they will help .

Thanks, will do. Appreciated.

 

[Nemises]

Has anyone had any recent experience with a loan from an Aussie bank. NAB, CBA or the likes.
Say you were looking at buying a property to raise goats for meat export, as live goat meat prices seem to be strong over the past 5-10 years. US buys most of the Aussie goat meat.
Would a bank loan 15-20% of the property purchase price to use for buying stock ( rangeland goats )  and fencing etc ....
So I provide 85% deposit .... and borrow 15% .....  but the income is based on working the farm and exporting 6 month old goats, not a salaried job.
Would the bank lend for this at reasonable interest rates ... ?
 

Have obtained the previously mentioned business card/email address of the CBA of a popular NSW Southern Tablelands town known for it’s stock raising quality! Will PM to you if still interested.

[Ozman52]

Any OAP still maintaining Oz residence will have received $75 one-off energy Supplement today.

[Nemises]

Today’s Aus newspapers:



Aged pension deeming rates under the microscope as interest rates plunge


Aussie retirees are set to benefit from an aged pension boost after Treasurer Josh Frydenberg acknowledged the deeming rate was not in line with record-low interest rates.
|
July 6, 2019
HERALDSUN


Deeming rate to be lowered

More than half a million retirees could benefit from a review of how their aged pension is calculated after being hit by a further reduction in interest rates this week.

Treasurer Josh Frydenberg says the federal government has accepted the argument that the deeming rate, which issued work out a pensioner’s financial assets, is too high.

Deeming rates for the pension, which are as high as 3.25 per cent depending on individual’s circumstances, were last set in March 2015.

Since then, the Reserve Bank has cut the official cash rate five times, hitting a new record low of just one per cent after this week’s central bank board meeting.

More than half a million retirees could benefit from a review of how their aged pension is calculated.

“Since the deeming rates were last changed ... interest rates have come down by more than a per cent and this is now a goodtime to look at the issue,” the Treasurer told Nine Newspapers.

However, Mr Frydenberg said any cut to the deeming rate would not directly follow the falling cash rate because retirees not only invested their savings in term deposits, but also managed funds, shares and superannuation accounts that had far higher rates of return than bank accounts.

“It’s not a straight line equation, you know, that the interest rate comes down, which affects the bank deposit rate, which therefore should affect the deeming rate, it’s not linear,” he said.

Mr Frydenberg said any cut to the deeming rate would not directly follow the falling cash rate. Picture: Kym Smith
The five-year average rate of return on ASX 200 shares had been more than 12 per cent and about 6.9 per cent for superannuation income, whereas a $5000 term deposit over six months was paying between 1.75 per cent and 2.45 per cent. At the moment, for singles, the first $51,800 of financial assets is subject to a deeming rate of 1.75 per cent and anything over $51,800 is deemed to earn 3.25 per cent.

For a couple of which at least one receives a pension, the first $86,200 of combined financial assets has a deeming rate of 1.75 per cent and anything over $86,200 is deemed to earn 3.25 per cent.

While Mr Frydenberg declined to nominate the size of any potential reduction in deeming rates, he said a change would hit the budget bottom line, although not to the extent to jeopardise a return to surplus this financial year.

In 2015 deeming rates were reduced by 0.25 percentage points, which cost the budget $200 million a year and gave part-pensioners an extra $83 a year.

[LosLobo]

5 hours ago, Nemises said:

Aussie retirees are set to benefit from an aged pension boost after Treasurer Josh Frydenberg acknowledged the deeming rate was not in line with record-low interest rates.

Deeming rate to be lowered.

The Treasurer made no such undertaking!

 

This is just poetic licence from the Herald Sun.

 

I cannot see it happening anytime soon.

[Nemises]

Pension payments could increase with change to deeming rate

By 9News Staff
6:00pm Jul 7, 2019



More than half a million Australians could have their pension payments increased with the government on the cusp of making a significant change.
Labor claims if the government lowers the deeming rate by the same amount the Reserve Bank has lowered interest rates, some part-pensioners will be anywhere between $62 and $3875 a year better off.
The government is unlikely to lower it by that much because it would almost wipe out its surplus but hundreds of thousands of pensioners will almost certainly get more cash sometime this week.
Deeming is how the government works out the income made from a person’s investments – regardless of what they really earn.
Currently, the government assumes pensioners are getting a 3.25 per cent return on any investment over $51,200 and 1.75 per cent on anything less than that.
They’re allowed to earn up to $172 per fortnight in extra income before their pension payments are reduced.
But with the cash rate now at one per cent, anyone who has money tied up in savings accounts or term deposits isn't making anywhere near that, so they’re having their pension payments unfairly reduced and are living off less money.

[LosLobo]

The Age/SMH 8th July.....

 

DEEMING DRAMA

 

Retirees are demanding a permanent fix to pension “trickery” as the government prepares to make a decision on deeming rates, The Age/SMH report.

 

Seniors Australia is demanding a new, independent mechanism for setting the rate, used to work out the income made from financial assets to assess pension payments, as pressure mounts to reduce the rate from 3.25% to closer to the official interest rate of 1%. Seniors Australia advocate Ian Henschke told The New Daily that the government was short-changing pensioners: “How can you go to an election accusing Labor of having a retirees tax, when you’ve been running your own pensioner tax?” 

 

New analysis by Labor shows that part-pensioners stand to gain between $62 and $3875 a year, depending on the size of their assets, if the government cuts the rate by 1.25%.

[Brer]

Well the SMH is predicting a cut in the deeming rates is likely in September.

Its well overdue and the cost is really peanuts when you consider what Australia denotes to Indonesia every year plus what we give away to every economic refugee that arrives on our shores.

[LosLobo]

Federal Government announces $600 million boost for pensioners as cuts made to deeming rate

ABC News 14/07/19

 

The Federal Government has announced it will spend $600 million on a pension boost for older Australians, under long-awaited changes to deeming rates.

 

The Government will promise up to $1,053 a year for part-pensioners and those who receive other federal allowances in a change to the rules on earnings from term deposits, shares and other investments.

 

Retiree groups have been urging the Government to cut the official deeming rate, which assumes how much a pensioner earns on private investments.

 

The lower deeming rate will decrease from 1.75 per cent to 1 per cent for financial investments up to $52,000 for single pensioners and $86,000 for pensioner couples, while the upper deeming rate will be cut to 3 per cent.

 

"It will mean more money in the pockets of older Australians," Minister for Families and Social Services Anne Ruston said in a statement.

 

"Under the new rates age pensioners whose income is assessed using deeming will receive up to $40.50 a fortnight for couples, $1,053 extra a year, and $31 a fortnight for singles, $804 a year."

 

Pensioners will see the extra money come into their bank accounts from the end of September, in line with the regular indexation of the pension. The payments will be backdated to July 1.

https://www.abc.net.au/news/2019-07-14/federal-government-announces-600-million-pension-boost/11307454

 

[Nemises]

The Treasurer made no such undertaking!
 
This is just poetic licence from the Herald Sun.
 
I cannot see it happening anytime soon.

It’s already happened.... “The Morrison government has now moved to cut deeming rates - with the adjusted payments to be BACKDATED TO JULY 1”

[ThaiBunny]

Sadly it isn't a boost to the pension at all, otherwise all pensioners would be getting it. It's merely a reduction in the income those pensioners with savings are "deemed" to have earned which has the effect of increasing their pension (marginally). Typical spin by politicians - and you can expect the tax bludging pensioners will be in full cry about the injustice of it all

[LosLobo]

The full deeming rate should have matched the RBA cash rate.

 

The greater than $52k investment deeming rate was only reduced from 3.25% to 3%.

 

Pensioners with savings above $52k will now have to move their funds to higher risk investments.

[ThaiBunny]

4 minutes ago, LosLobo said:

The full deeming rate should have matched the RBA cash rate

Why? That assumes all pensioners have their savings solely in cash. The evidence from their tax returns and other data suggests that that simply isn't true

[LosLobo]

2 minutes ago, ThaiBunny said:

Why? That assumes all pensioners have their savings solely in cash. The evidence from their tax returns and other data suggests that that simply isn't true

Divergent cash rates and deeming rates are forcing retirees to take on more risk to match deemed income. 

 

A lot of pensioners are adverse to the risk of high growth investments and prefer investing in cash.

 

Some don't have the income or the time left on this earth to recoup any losses!

[LosLobo]

Choose your investments (ASIC May 2019 before recent RBA changes)

Short-term investments (1-3 years)

A short-term investor should be looking for investments with:

• Risk - very low risk of losing your money
• Volatility - very low, unlikely the value of your savings will fall
• Expected return - 2-3% per year (long-term average return)

Suitable products could be:  

• Online savings account (if you could need the cash at any time)
• Term deposit (if you know how long your money can be locked away). Don't let it rollover automatically as it may not be in your best interests

These products could be suitable because the money is available when you need it but they still give a reasonable return.

Ask yourself:

• How quickly will I be able to get my money when I need it?
• Is it easy to add more savings?
• Am I getting a good interest rate?

https://www.moneysmart.gov.au/investing/invest-smarter/choose-your-investments

 

[LosLobo]

18 minutes ago, LosLobo said:

Choose your investments (ASIC May 2019 before recent RBA changes)

Short-term investments (1-3 years)

A short-term investor should be looking for investments with:

• Risk - very low risk of losing your money
• Volatility - very low, unlikely the value of your savings will fall
• Expected return - 2-3% per year (long-term average return)

Suitable products could be:  

• Online savings account (if you could need the cash at any time)
• Term deposit (if you know how long your money can be locked away). Don't let it rollover automatically as it may not be in your best interests

These products could be suitable because the money is available when you need it but they still give a reasonable return.

Ask yourself:

• How quickly will I be able to get my money when I need it?
• Is it easy to add more savings?
• Am I getting a good interest rate?

https://www.moneysmart.gov.au/investing/invest-smarter/choose-your-investments

 

A lot of pensioners who are risk adverse would be taking ASIC's (aka the Govt) advice with short term investments.

 

Hence the problem, after the recent RBA cash rate changes, savings accounts and term deposits returns can be less than the overall deeming rate.

 

The RBA cash rate was 2.25 per cent when the current deeming rates were set in 2015.

[LosLobo]

Weekend Australian 14/07/19

 

‘Slap in the face’: row erupts over cuts to deeming rates for pensioners

 

https://www.theaustralian.com.au/nation/planned-easing-of-deeming-rates-to-deliver-cash-boost-to-one-million-aussie-pensioners/news-story/d331db29d2e500f605ad575e0c73ad8f

[Brer]

Seems to me that the change in deeming rates which will occur on the 20th Sept will coincide with the normal reassessment of outside Australia pension rates. 

So give us a couple of bucks by lowering deeming rates and forget the normal reassessment because we will back date your deeming rates to 1st July.

Screwed again possibly.

 

[LosLobo]

13 minutes ago, Brer said:

Seems to me that the change in deeming rates which will occur on the 20th Sept will coincide with the normal reassessment of outside Australia pension rates. 

So give us a couple of bucks by lowering deeming rates and forget the normal reassessment because we will back date your deeming rates to 1st July.

Screwed again possibly.

Pensioners assessed by deeming will see the extra money come into their bank accounts 20th September, along with the regular indexation of the pension.

 

There is no special reassessment of "outside" Australia pension rates.

[RJRS1301]

2 hours ago, Brer said:

Seems to me that the change in deeming rates which will occur on the 20th Sept will coincide with the normal reassessment of outside Australia pension rates. 

So give us a couple of bucks by lowering deeming rates and forget the normal reassessment because we will back date your deeming rates to 1st July.

Screwed again possibly.

 

What reassessment rate  outside Australia?

Cost of living indexation occurs automatically, outside Aust no pharmaceutical /utilities paid.

 

[Brer]

18 hours ago, LosLobo said:

Pensioners assessed by deeming will see the extra money come into their bank accounts 20th September, along with the regular indexation of the pension.

 

There is no special reassessment of "outside" Australia pension rates.

Never said there was a special reassessment or suggested such, I referred to the normal reassessment which you term regular indexation of the pension.

This government is out to screw pensioners any way they can and will use any excuse they can not to pass on entitlements.

If you own a house watch out because that will be your pension down the track, taking out money against the value of the house, it’s coming no matter Libs or Labs.

[LosLobo]

1 hour ago, Brer said:

Never said there was a special reassessment or suggested such, I referred to the normal reassessment which you term regular indexation of the pension.

This government is out to screw pensioners any way they can and will use any excuse they can not to pass on entitlements.

If you own a house watch out because that will be your pension down the track, taking out money against the value of the house, it’s coming no matter Libs or Labs.

Sorry, your use of the word "outside" in "normal reassessment of outside Australia pension rates" wrongly gave me the impression that you thought that there were two assessments, one for pensioners inside and one for pensioners outside of Australia.

 

Actually as from 1 July, there is a new scheme where pensioners can take out a reverse mortgage on their home where the Govt will supplement their pension with regular payments up to 1.5 times their pension without any penalty for additional income. It's called the Pension Loans Scheme.

 

https://www.humanservices.gov.au/individuals/services/centrelink/pension-loans-scheme

 

https://www.moneysmart.gov.au/superannuation-and-retirement/income-sources-in-retirement/home-equity-release/reverse-mortgages

 

The upside is that you can get 50% more pension, ideal for people with million dollars homes and no cash who want to enjoy their retirement and not worry about how much their kids will inherit.

 

The downside is the interest rate of 5.25% compounded.

 

 

[RJRS1301]

7 minutes ago, LosLobo said:

Sorry, your use of the word "outside" in "normal reassessment of outside Australia pension rates" wrongly gave me the impression that you thought that there were two assessments, one for pensioners inside and one for pensioners outside of Australia.

 

Actually as from 1 July, there is a new scheme where pensioners can take out a reverse mortgage on their home where the Govt will supplement their pension with regular payments up to 1.5 times their pension without any penalty for additional income. It's called the Pension Loans Scheme.

 

https://www.humanservices.gov.au/individuals/services/centrelink/pension-loans-scheme

 

The upside is that you can get 50% more pension, ideal for people with million dollars homes and no cash who want to enjoy their retirement and not worry about how much their kids will inherit.

 

The downside is that the interest rate is 5.25% compounded.

 

 

I think the mentality of "inheritance" by younger generation needs to change drastically.

The family home may need to be downsized, to assist with costs of ageing and care, with a break given on associated costs (stamp duties etc) to allow smaller homes for those who downsize

 

Seems outrageous that some living multimillion homes can access part or full pensions  and keep huge superannuation investments and still receive benefits. 

Yes I know there is an argument about forcing people to downsize, but if living in a home valued at over two million (average home Sydney /Melbourne one million).

Surely one should contribute to using assets for care and living, not to leave to ? 

 

[Brer]

9 hours ago, LosLobo said:

 

Actually as from 1 July, there is a new scheme where pensioners can take out a reverse mortgage on their home where the Govt will supplement their pension with regular payments up to 1.5 times their pension without any penalty for additional income. It's called the Pension Loans Scheme.

 

https://www.humanservices.gov.au/individuals/services/centrelink/pension-loans-scheme

 

https://www.moneysmart.gov.au/superannuation-and-retirement/income-sources-in-retirement/home-equity-release/reverse-mortgages

 

The upside is that you can get 50% more pension, ideal for people with million dollars homes and no cash who want to enjoy their retirement and not worry about how much their kids will inherit.

 

The downside is the interest rate of 5.25% compounded.

 

 

I wonder what the uptake will be.

I guess that they won’t be adjusting the interest rate for a while if that figure was arrived at before the July reserve bank meeting, it should be with deeming rates etc on September 20th and back dated too. 

I had no idea about this scheme I will have to tune in more to the ABC and the SMH.

Many Thanks

[LosLobo]

3 hours ago, Brer said:

I wonder what the uptake will be.

I guess that they won’t be adjusting the interest rate for a while if that figure was arrived at before the July reserve bank meeting, it should be with deeming rates etc on September 20th and back dated too. 

I had no idea about this scheme I will have to tune in more to the ABC and the SMH.

Many Thanks

I can see a scenario, with the current low exchange rate in Thailand, where the scheme could be attractive to a lot of expats, keen on repatriation, who only have enough funds to just purchase a house in Oz.

 

They could return home from overseas to claim residency, the aged pension and/or supplements and purchase a home.

 

This scheme could allow them to have their own home, get the full pension (coz all their assets are now in the family home) and then supplement it with payments from a Govt reverse mortgage.

 

Though a lower interest rate would make it more attractive!

 

 

[giddyup]

Has anyone on a pension ever been asked for an update of income by Centrelink? I ask because in 9 years of living in Thailand Centrelink has never asked me if my financial circumstances have changed, the pension has been paid into my Aussie bank regularly every month with no questions asked. Is this normal?