Australian Aged Pension

Nemises · January 22

18 minutes ago, KhunHeineken said:

proposed changes

proposed changes?? Please send a link showing the proposed changes.

KhunHeineken · January 22

On 1/20/2024 at 1:50 AM, 4MyEgo said:

Fair enough mate, we all have different opinions and that's ok, hence the reason we are discussing the issue at hand.

Interesting comment.

With so many links from credible sources, even government websites, the proposed changes seem pretty clear to me, and not really open to "opinion" or "interpretation."

183 days outside of Australia = non resident for taxation purposes.

45 days inside Australia and meeting two of the factor tests - resident for taxation purposes.

That said, you are entitled to your opinion, and I have no problem discussing this serious issue with you.

On 1/20/2024 at 1:50 AM, 4MyEgo said:

The guys I know have been here for decades and don't lodge tax returns, and one of them worked overseas for years.

I don't believe anyone declares themselves as non residents when they leave Australia, perhaps except for myself as I earn interest from banks & they with hold tax and give it to the ATO. My other investments are not taxable as a non resident or the tax is already taken out when payments are made to me.

Th pension is interesting to me because I am 50/50 on getting applying for it when the time arrives, albeit it the 2 years in jail is the stickler i.e. is it feasible for me, and from what I have worked out, it isn't unless I buy a 2 bedroom pad for that period vs renting, but that would then mean taking my funds out of investments which earn me money, so there would be a loss of income for those 2 years, and I earn more than what the pension would provide me, anyways, it is what it is and we will cross that road when the time comes, depending on what the world is doing and how economics play out then.

The people that want to be declared as a non resident are people working, or have sizeable investments in a low tax country, who neither derive or generate zero income in Australia.

You are correct, why would any expat retiree who derives or generates an income in Australia declare themselves a non resident for tax purposes, or even tick the "Leaving Australia Permanently" box on the departure card? I have given a reason for why non residents have been able to get away with this for decades in a previous post, and it's exactly what the proposed changes are going to stop.

On 1/20/2024 at 1:50 AM, 4MyEgo said:

The question I have is why haven't Age Pensioners being paying tax while overseas and all of a sudden there is TALK that's all, TALK that things are going to change come 1 July 2024 because they are going to change the days that will determine your residency status.

Now Centrelink are linked up to border control and know when you leave the country, as soon as you pass through immigration, and if you are on the dole, your payments stop straight away, and as soon as you enter the country, they start again.

The above said, why doesn't that happen with the Age Pensioner, ask yourself that, it's because Age Pensioners have the right to exit without an issue, even though the same government department is paying you.

I don't like TALK, links to government legislation is what I read and like to see, because that is what makes law.

Until such time I see that Age Pensioners are taxable if they live overseas on their Age Pension, then I am sticking with what I hear at the coal face with the guys I know that live here and don't pay tax on their Age Pensions, can you name one you know that pays tax as a non resident, just asking for a friend :)

I believe an aged pensioner who does not inform Centerlink they are going overseas, after 6 weeks, they stop some of the supplements. Can a pensioner conform this? If this is the case, the framework / infrastructure for the proposed changes to work the same way for the 32.5% withholding of the pension is already in place.

You say it's just "Talk" but I have posted links to the current 90 year old tax residency laws. The pages and pages and pages of this legislation will be simplified with a physical presence and time based model. Basically, the legislation around residency for taxation purposes will eventually change, either under Labor, or the next Liberal government.

I have posted links showing the pension is deemed an income. I have posted links showing pensions are taxable. I have posted links showing there is no tax free threshold for non residents. If you put these fact together with the proposed changes, things aren't looking good for continuing to pay no tax.

What you need to understand is, the way we have ALL been getting away with it for decades will come to an end when these proposed changes are passed.

As I have said, it's not a new tax. It's n existing tax that was too cumbersome for the ATO to collect because of so many loopholes, not to mention, how can the ATO prove my "intention: in a Court when my intentions are in my own head? All I have to say is I am on a long holiday, and have maintained a domicile back in Australia, and have every intention of returning to Australia to live. The proposed changes do away with this loophole and the government will simply declare you a non resident for tax purposes based on immigration department data. There will be no way to get around this, and that's why they designed it that way.

See the quote in a recent post about how strictly they will be enforcing the days.

KhunHeineken · January 22

On 1/20/2024 at 2:11 AM, Nemises said:

Mate be mindful of the current falling market in some areas of Sydney! From memory you too are also from the St G area of Sydney, so this excerpt from p22 of today’s Syd Telegraph article on the subject maybe of interest:

“Ramsgate Beach was also the coastal suburb with the biggest fall in prices over the past year, with unit values dropping by an average of about 27 per cent or $329,000”

I can PM you the full article if interested.

Just trying to help, not alarm.

If you ad together the stamp duty to buy, the agent's fees to sell, the taxes and fees and maintenance for 2 years, then the loss of the earnings on the capital invested elsewhere, then the high cost of living, it may not be worth buying a property for the 2 years, not to mention the risk that the property market goes down, creating further losses.

KhunHeineken · January 22

On 1/20/2024 at 2:26 AM, Will27 said:

The guys who aren't lodging tax returns obviously aren't paying tax.

Some should be lodging them, but as I've said previously, the ATO

prioritises debt collection and tax return lodging normally on tax/debt levels.

This is something I've tried on numerous occasions to explain to KH but either doesn't get it or just doesn't believe it.

I've posted links previously.

He seems to think the ATO would waste time, money and resources on trying to chase down small debts. Don't bother replying to this KH because we've been over it countless times.

The reason why Age Pensioners haven't been paying tax is because they more than likely declare themselves as non-residents.

Pensioners going in and out of the country at the moment are relevant to Centrelink, not the ATO.

I think most agree to a point, people will still be classing themselves as non-residents and so will avoid non-resident tax rates.

Our tax system is based on self assessment so what you put down on your tax return will be taken as gospel, until it's not.

So the bottom line is, keep things the same until legislation changes.

We can then deal with it then.

I get it, but what you don't accept, or understand, is when the proposed changes are passed, computers will do all the heavy lifting. What part of this don't you understand?

Guys like me, who appear to be tax residents on a long holiday, will end up getting a non resident tax bill. Part pensioners will be the same on their supplement income. Aged pensioner will have a 32.5% reduction in their pension.

There's no way the government will pay the full pension every fortnight, then chase the 32.5% on the 1st July every year. Like the supplements,the 32.5% will be withheld after 183 days.

The immigration data base already talks to the Centerlink data base, and they will be set to talk to the ATO. It's not like the ATO have to employ another 500 staff for this.

Some of your post is incorrect.

I think what you mean is, currently, pensioners, part pensioners, and even self funded guys like me, have always declared ourselves as residents for taxation purposes, not non residents, as you have posted. This may have been a typo on your behalf, because if we did declare ourselves as non residents, we would have to pay non resident tax.

How can you class yourself as a non resident to avoid non resident tax. The way to avoid non resident tax is to be a resident. Once again, maybe a typo on your behalf.

Interesting comment about self assessment. Do you think we will all be able to "self assess" ourselves out of the immigration department knowing we have been outside of Australia for 183 days? :smile:

Yes, we continue on as we have been, but the proposed changes are there for all to see, and in my opinion, it's only a matter of time before either political party passes them into law.

Will27 · January 22

1 minute ago, KhunHeineken said:

I get it, but what you don't accept, or understand, is when the proposed changes are passed, computers will do all the heavy lifting. What part of this don't you understand?

Guys like me, who appear to be tax residents on a long holiday, will end up getting a non resident tax bill. Part pensioners will be the same on their supplement income. Aged pensioner will have a 32.5% reduction in their pension.

There's no way the government will pay the full pension every fortnight, then chase the 32.5% on the 1st July every year. Like the supplements,the 32.5% will be withheld after 183 days.

The immigration data base already talks to the Centerlink data base, and they will be set to talk to the ATO. It's not like the ATO have to employ another 500 staff for this.

Some of your post is incorrect.

I think what you mean is, currently, pensioners, part pensioners, and even self funded guys like me, have always declared ourselves as residents for taxation purposes, not non residents, as you have posted. This may have been a typo on your behalf, because if we did declare ourselves as non residents, we would have to pay non resident tax.

How can you class yourself as a non resident to avoid non resident tax. The way to avoid non resident tax is to be a resident. Once again, maybe a typo on your behalf.

Interesting comment about self assessment. Do you think we will all be able to "self assess" ourselves out of the immigration department knowing we have been outside of Australia for 183 days?

Yes, we continue on as we have been, but the proposed changes are there for all to see, and in my opinion, it's only a matter of time before either political party passes them into law.

I said I wont go around in circles with you.

But I will say this, as other have.

It's "if" the proposed changes get up, not when.

You, like all of us have no idea if they'll pass, so stop talking like you do.

KhunHeineken · January 22

On 1/20/2024 at 3:10 AM, Lacessit said:

I put in a non-lodgment advice 3 years ago, the ATO accepted it without comment. I have not put in a tax return for two years, again no communication.

I have only been audited by the ATO once in my entire lifetime, and that was when I was on a six-figure salary back in the eighties.

I think you are correct, the ATO has better things to do than chase a minority of pensioners for trifling sums.

Besides which, the ATO may have absorbed the Robodebt lesson. Persecuting the poor and vulnerable just because you can has a high cost in terms of credibility and careers.

You have stated you are on a part pension. What about the supplement income you receive? How can that stand outside the proposed changes in the future?

The rest of your post is just wishful thinking.

As I have said, computers will do it all, and there can be no asking for a review or appeal because one has simply been outside of Australia for 183 days, proven by immigration records, and there's no getting around that.

KhunHeineken · January 22

9 minutes ago, Will27 said:

I said I wont go around in circles with you.

But I will say this, as other have.

It's "if" the proposed changes get up, not when.

You, like all of us have no idea if they'll pass, so stop talking like you do.

The previous Liberal government had then drafted.

The current Labor government has allowed the consultation phase which started in July 23 and ended September 23. (link already provided)

Here's the Assistant Treasurer telling expats in Singapore the proposed changes are in the government's "in tray."

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

So, out of these facts, can you tell me why you think neither political party will get them passed?

How can Liberal try to block them in parliament when they were all for them and had them drafted? How can Labor try to block them when in opposition when they didn't bin them and were looking to tweak the 45 days?

I can simply see the writing on the wall.

Will27 · January 22

2 minutes ago, KhunHeineken said:

The previous Liberal government had then drafted.

The current Labor government has allowed the consultation phase which started in July 23 and ended September 23. (link already provided)

Here's the Assistant Treasurer telling expats in Singapore the proposed changes are in the government's "in tray."

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

So, out of these facts, can you tell me why you think neither political party will get them passed?

How can Liberal try to block them in parliament when they were all for them and had them drafted? How can Labor try to block them when in opposition when they didn't bin them and were looking to tweak the 45 days?

I can simply see the writing on the wall.

Again, they're proposed.

If they come in, I'll deal with it.

KhunHeineken · January 22

21 hours ago, 4MyEgo said:

Agree with your point 110%,, noting that as a non resident, it is my understanding that you are not required to lodge a tax return, i.e. unless you have other sources of income from Australia.

I don't lodge one, haven't for years, and if the only source of income in Australia is your pension, i.e. retirement income, then my understanding is, you wouldn't be required to lodge a tax return as well.

As mentioned in a previous post, if you have other sources of income in Australia and are a non resident, then you will be taxed on that income, plus the Age Pension as well, this is what makes sense to me, in other words, why would the ATO bother an Age Pensioner living overseas, especially if he has no other income sourced from Australia.

The ATO knows that the time and expense it would cost to collect small fish isn't feasible, so they put on bigger hooks to catch bigger fish.

If you agree 100%, then you are contradicting yourself.

Can you see how convenient the proposed changes make it for the government to either collect, or withhold pensions money, from people outside of Australia for 183 days? No tax returns needed. Just post out a bill to self funded and part pensioners for 32.5%, and withhold 32.5% of the pension from pensioners, all physical presence and time based, with the work done by computers.

21 hours ago, 4MyEgo said:

Below is copy and pasted from Google:

The below scenario from my interpretation, while it typically would relate to the Age Pension in Australia, it could also apply to non residents in my opinion as well, e.g. a non resident could have a case to argue with the ATO, if they were pulled up, and if took it to court and won the case, would set a precedent. So better left alone, it could also create an uproar politically by those seeking to obtain the Age Pension down the track and move to greener pastures overseas, so to speak.

The Age Pension whilst not taxable for Australian residents if it is your only source of income as a retiree, in my opinion, shouldn't change because of your residency status, i.e. because you choose to retire overseas (as a retiree), while deemed to be a non resident, and the Age Pension is still your only source of income. (See below).

The Age Pension forms part of your taxable income. However, if it is your only source of retirement income, you will pay no tax. If you're on the Age Pension, you also receive health benefits and reduced charges on rates, telephones, gas and electricity, car registration and public transport.

I see the words "my interpretation" and "it could also apply to non residents in my opinion."

You have posted, "the age pension forms part of your taxable income." So, basically, as I have posted many times, and provided links, the pension is deemed to be an income, and is taxable.

I have also posted the non resident tax brackets.

So, can you post a link showing the pension is exempt from non resident tax? Can you post a link showing a tax free threshold for non residents?

If you can't, all we have is your "interpretation and "opinion."

The rest of your post is basically a personal attack.

Why don't you put up or shut up? Post some links to back up your "interpretation" and "opinion."

KhunHeineken · January 22

22 hours ago, 4MyEgo said:

If memory served me correctly, I think I posted something with regard to an offset and if taxed at 32c to the $, Age Pensioners would be $120 a week worse off, so yes agree, the time and cost to track people down would cost more than that IMO, not to mention would cost the government more than that per week, if those Age Pensioners returned, as they would be entitled to rental allowances, electricity supplements, health care and pension cards, etc, etc.

Who are they "tracking down?"

Those who lodge a tax return, they have them cold. They will get their non resident tax bill in the usual way. They will have pensioners cold as well. Immigration tells ATO and Centerlink an individual has been outside of Australia for 183 days and next fortnight the pension is reduced buy 32.5%. Where's the "tracking down" about this?

KhunHeineken · January 22

22 hours ago, 4MyEgo said:

doesn't matter which way you to try to play the game, they have you checkmate.

I agree with you 100%, however, I find it strange you do not accept that there could be another "checkmate" on the way, as we have been discussing.

Australia is edging closer to $1 trillion debt. The money has to come from somewhere. They will be looking to implementing every "checkmate" they can.

KhunHeineken · January 22

21 hours ago, scorecard said:

And no response.

Did you ever work out which pension you were on?

One day it was a vet's pension, the next day it was the aged pension.

KhunHeineken · January 22

9 hours ago, Will27 said:

It's my understanding that most people in Thailand (residents) should be lodging tax returns if they earn above the threshold.

Having said that, it's a bit like declaring yourself as a resident.

Just hope to fly under the radar.

Myself, and some friends, and I am sure many others around the world who are self funded, lodge tax returns. We pay resident tax rates, due to the loopholes previously mentioned. That will change when the proposed changes are passed. We will be paying non resident tax rates at 32.5% from $0.

Where this is relevant to pensioners and part pensioners is there are no exemptions for pensions in the proposed changes, nor any mention of a tax free threshold being added to non resident tax brackets, hence why I posted about it a long time ago, because a pension is deemed income, and is also taxable, and this caused some debate, which is still continuing.

KhunHeineken · January 22

8 hours ago, Nemises said:

Agree with your math mate and sorry to hear that you might not be returning to do the 2 year stint in order to grab the extra 50K baht per month.

Surely there must be a cost effective way to return to AU for 2 years?

Maybe a fellow AN forum member on here can rent out their AU property at a cheap rate?!

So even if you own an empty caravan in Aus, please let us know!

A friend of mine returned and bought a mobile home and cruised around Australia, sometimes with the Thai missus. It was his cost effective method for transport and accommodation in one, whilst filling his day and showing the missus his country. This may not be for everyone, but it is an option.

KhunHeineken · January 22

8 hours ago, Peterw42 said:

I am the same, I don't think I will go back. Although I own a place, it would mean kicking out the tenant (my current income), then a house fit out, appliances furniture, beds, plates cooking ($20k). I would want my Thai wife to come so that's another $10k for her visa. A basic car $5-10k. And, I would basically be on the dole for 2 years as nobody employs a 65 yo.

All correct.

Unfortunately, the unknown factor in the maths as to whether it's financially beneficial or not to return is the individual's life span.

Return and pay all that money and die not long after serving the 2 years and it was wasted. Return and go on to live a very long life and it was financially beneficial to do so.

ozimoron · January 22

11 minutes ago, KhunHeineken said:

A friend of mine returned and bought a mobile home and cruised around Australia, sometimes with the Thai missus. It was his cost effective method for transport and accommodation in one, whilst filling his day and showing the missus his country. This may not be for everyone, but it is an option.

I agree but for many returning to Australia to collect the pension this solution might be out of reach. A couple of years ago campervans were selling for outrageous prices.

KhunHeineken · January 22

4 hours ago, 4MyEgo said:

Ouch, did you hear of the new Capital Gains Tax changes to non residents ?

It's ok if you never intend to sell, also that 32c in the $ from rents got to hurt, plus not being able to negatively gear your losses, i.e. if your a non resident, otherwise you should be fine, providing that you can prove your residency.

Yet, you seem to think pensioners will get a free pass from the very same laws, despite no mention of an exemption. :smile:

KhunHeineken · January 22

2 hours ago, Nemises said:

proposed changes?? Please send a link showing the proposed changes.

Been posted many times before by me and others. Google it and you will see many pages from accounting firms, financial planning firms, also government websites about them. They are no secret.

KhunHeineken · January 22

1 hour ago, Will27 said:

Again, they're proposed.

If they come in, I'll deal with it.

Sure, so will I, as we will all have to.

Nothing wrong with considering the options though.

KhunHeineken · January 22

5 minutes ago, ozimoron said:

I agree but for many returning to Australia to collect the pension this solution might be out of reach. A couple of years ago campervans were selling for outrageous prices.

Have you seen the price of houses and rents across the country lately?

LosLobo · January 22

29 minutes ago, KhunHeineken said:

Myself, and some friends, and I am sure many others around the world who are self funded, lodge tax returns. We pay resident tax rates, due to the loopholes previously mentioned. That will change when the proposed changes are passed. We will be paying non resident tax rates at 32.5% from $0.

Where this is relevant to pensioners and part pensioners is there are no exemptions for pensions in the proposed changes, nor any mention of a tax free threshold being added to non resident tax brackets, hence why I posted about it a long time ago, because a pension is deemed income, and is also taxable, and this caused some debate, which is still continuing.

With respect, I thought you would have retired after you achieved 500 superfluous, redundant and unnecessary posts, after well informing us of your point the first time.

Yet, Khun Herr Schadenfreude, in the past hour, you have imposed your nonsense on us at least 10 times.

Please stop this obsessiveness and perhaps troll a more deserving audience.

KhunHeineken · January 22

29 minutes ago, LosLobo said:

With respect, I thought you would have retired after you achieved 500 superfluous, redundant and unnecessary posts, after well informing us of your point the first time.

Yet, Khun Herr Schadenfreude, in the past hour, you have imposed your nonsense on us at least 10 times.

Please stop this obsessiveness and perhaps troll a more deserving audience.

Another useless troll post from you. That makes it 500 superfluous, redundant, and against forum rules posts you have made in reply to me. It may simply come down to who lives longer as to who will prevail. :cheesy:

Lacessit · January 22

1 hour ago, KhunHeineken said:

You have stated you are on a part pension. What about the supplement income you receive? How can that stand outside the proposed changes in the future?

The rest of your post is just wishful thinking.

As I have said, computers will do it all, and there can be no asking for a review or appeal because one has simply been outside of Australia for 183 days, proven by immigration records, and there's no getting around that.

Repetitive posting.

KhunHeineken · January 22

3 minutes ago, Lacessit said:

Repetitive posting.

Hardly. Serious question.

Lacessit · January 22

29 minutes ago, KhunHeineken said:

Hardly. Serious question.

Trolling.

KhunHeineken · January 22

6 minutes ago, Lacessit said:

Trolling.

Nope.

Those on a full pension have posted. I am self funded and posted. I think you are the only member actively posting who is on a part pension.

Are you considering some financial restructuring after the changes come in?

Lacessit · January 22

13 minutes ago, KhunHeineken said:

Nope.

Those on a full pension have posted. I am self funded and posted. I think you are the only member actively posting who is on a part pension.

Are you considering some financial restructuring after the changes come in?

If, not after. I'll cross that bridge when I come to it.

KhunHeineken · January 22

I could do 45 days, and even cop 60 days, but 90 days a year is not good.

Dated October 23.

https://www.afr.com/politics/federal/business-travellers-tourists-could-be-caught-in-new-tax-rules-20231017-p5ecvy

KhunHeineken · January 22

6 minutes ago, Lacessit said:

If, not after. I'll cross that bridge when I come to it.

Why do you think the changes will not be passed? Who is going to object to the legislation?

The previous Liberal government proposed them, and the current Labor government is running with them.

I can't see it being an election issue, so who is going to stand in the way of them being passed?

Lacessit · January 22

3 minutes ago, KhunHeineken said:

Why do you think the changes will not be passed? Who is going to object to the legislation?

The previous Liberal government proposed them, and the current Labor government is running with them.

I can't see it being an election issue, so who is going to stand in the way of them being passed?

Labor is running with trying to find an antidote for the poison pill Stage 3 tax cuts, bequeathed to them by the Liberals. Bigger fish to fry, as does the ATO.

You have documented evidence of draft legislation, or are you still relying on discussion papers?

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