Australian Aged Pension

[KhunHeineken]

7 minutes ago, Will27 said:

So you're pretty much saying you're correct on this matter and the ATO are incorrect?

Interesting.

Not just the ATO being incorrect, every other link and Youtube clip, they are all incorrect, yet he is correct.  When does "interesting" give way to "trolling?" 

[KhunHeineken]

11 minutes ago, Will27 said:

IMO, even if the new laws aren't passed, people who pretty much live in Thailand fulltime are living in Laa Laa land if they think having a residential address or a property in Australia would make them a resident.

It's been working for many, including myself, for decades.  Why do you think they proposed the changes? 

 

12 minutes ago, Will27 said:

Under audit, how could anyone make a case, if for example they've lived in Thailand for 10 years and haven't even visited back home?

Good point, and as I have said, the current 90 year old laws are mainly about "domicile" and "intention" thus, a lot of loopholes. 

 

It's all set to change to a system that will automatically flag an individual as a non resident after 183 days outside of Australia which will be linked to immigration, ATO, and Centerlink data bases.  

 

The proposed changes will be passed in the future, by either government.  No point trying to discuss the loopholes in the current legislation that many have benefited from in the past. 

[4MyEgo]

56 minutes ago, KhunHeineken said:

You claim to have done some "research" so it should be easy to post some of that "research" so we can all see how you came to your conclusion. 

 

Read Blakes reply, which confuses not only Bob, but a few others I take it, as Bob asked a simple question, yet gets a totally different answer, i.e. Blake didn't address his question as if he only receives the pension as his only source of income.

 

I will be retiring overseas soon on Australian age pension. I will be non-Australian resident for tax purposes and therefore I will not have the benefit of the tax threshold. My basic tax calculation on ATO site show that I will be paying approx. 30% tax on the age pension, where there would be no tax if resided in Australia. Is this correct?

 

Hi @bob1306

 

Not quite.

 

As an Australian resident for tax purposes, you would pay income tax according to resident rates. This means you'd be eligible for the tax-free threshold up to $18,200, and your tax on the income between $18,200 and $45,000 would be 19c per dollar. You would need to report and pay tax on your worldwide income, not just the age pension.

 

This is where Blake starts to confuse the issue at hand, by carrying on about your worldwide income, then adds on, "not just the age pension", Bob didn't ask about that, did he, he just asked about the age pension, and Blake didn't answer it clearly in my opinion. It's tax on top of the Age Pension, e.g. other source of income combined.

 

As a foreign resident for tax purposes, you will pay income tax according to foreign resident rates. This means for all income under $180k, you'll pay 32.5c per dollar. You would only report and pay tax on your Australian-sourced income to us.

 

You'll likely be eligible for the seniors and pensioners tax offset (SAPTO) though, meaning you'll get a tax offset to help counter the tax payable. You don't have to be a resident for tax purposes to receive this.

 

You can read about individual income tax rates and SAPTO on our website.

[KhunHeineken]

18 minutes ago, 4MyEgo said:

Read Blakes reply, which confuses not only Bob, but a few others I take it, as Bob asked a simple question, yet gets a totally different answer, i.e. Blake didn't address his question as if he only receives the pension as his only source of income.

You're joking, right? 

 

19 minutes ago, 4MyEgo said:

This is where Blake starts to confuse the issue at hand, by carrying on about your worldwide income, then adds on, "not just the age pension", Bob didn't ask about that, did he, he just asked about the age pension, and Blake didn't answer it clearly in my opinion. It's tax on top of the Age Pension, e.g. other source of income combined.

No confusion here. 

 

Blake tells Bob he will have to pay 32.5% tax on his pension.  Seems clear to me. 

 

"As a foreign resident for tax purposes, you will pay income tax according to foreign resident rates. This means for all income under $180k, you'll pay 32.5c per dollar. You would only report and pay tax on your Australian-sourced income to us."  - what don't you understand about this????????  Are you suggesting the pension is not "Australian sourced income?" 

 

 

[4MyEgo]

44 minutes ago, KhunHeineken said:

You're joking, right? 

 

No confusion here. 

 

Blake tells Bob he will have to pay 32.5% tax on his pension.  Seems clear to me. 

 

"As a foreign resident for tax purposes, you will pay income tax according to foreign resident rates. This means for all income under $180k, you'll pay 32.5c per dollar. You would only report and pay tax on your Australian-sourced income to us."  - what don't you understand about this????????  Are you suggesting the pension is not "Australian sourced income?" 

 

 

 

Just for the sake of it, I have sent an email to the ATO moderators to clarify if Blake is correct or incorrect, let's not hold our breath, but I will reply as soon as I hear something back, to put this to bed, whether I am correct, e.g. no tax for Age Pensioners as Non Residents if the Age Pension is their only source of income, or tax payable at $32.5c in the $ as a Non Resident with or without any additional income source.

 

[4MyEgo]

 

2 hours ago, KhunHeineken said:

Well, you could start with trying to post some links to "prove" you opinion, interpretation, theory etc. 

 

You claim to have done some "research" so it should be easy to post some of that "research" so we can all see how you came to your conclusion. 

 

Read it how you like, but I see no reason why it would be any different to Non Residents.

 

https://superguy.com.au/retirement/how-much-can-a-pensioner-earn-before-paying-tax/

 

 

[LosLobo]

12 minutes ago, 4MyEgo said:

 

Just for the sake of it, I have sent an email to the ATO moderators to clarify if Blake is correct or incorrect, let's not hold our breath, but I will reply as soon as I hear something back, to put this to bed, whether I am correct, e.g. no tax for Age Pensioners as Non Residents if the Age Pension is their only source of income, or tax payable at $32.5c in the $ as a Non Resident with or without any additional income source.

 

Hi, though it is extremely difficult for me to admit, I agree with KH here, sorry.

[4MyEgo]

6 minutes ago, LosLobo said:

Hi, though it is extremely difficult for me to admit, I agree with KH here, sorry.

 

That's quite ok, we all have differences of opinions, especially when there isn't enough clarity in my opinion that states that Age Pensioners, because they are deemed as Non Residents, pay tax on their Age Pension.

 

Until such time that I also obtain such clarification, I will believe what I have researched and read, suffice to say, I cannot understand why some people (with respect) believe an Age Pensioner, because he/she chooses to reside overseas on Welfare (Age Pension), would be taxed any different to a Resident.

 

The above said, Age Pensioners do not pay tax unless they have other sources of income, on top of their Age Pension and that is my argument.  

 

https://superguy.com.au/retirement/how-much-can-a-pensioner-earn-before-paying-tax/

 

Feel free to read the link above and as it doesn't stipulate the word Non Resident, I still see no reason why the ATO would stick it to a Welfare recipient because he/she decides to reside overseas.

 

[Nemises]

40 minutes ago, 4MyEgo said:

I still see no reason why the ATO would stick it to a Welfare recipient because he/she decides to reside overseas

That’s my take as well.
 

Budget Night is getting closer and soon this speculation will all be over.  Until next year 🤦‍♂️

 

 

 

 

[KhunHeineken]

1 hour ago, 4MyEgo said:

 

Just for the sake of it, I have sent an email to the ATO moderators to clarify if Blake is correct or incorrect, let's not hold our breath, but I will reply as soon as I hear something back, to put this to bed, whether I am correct, e.g. no tax for Age Pensioners as Non Residents if the Age Pension is their only source of income, or tax payable at $32.5c in the $ as a Non Resident with or without any additional income source.

 

Good to see you are being proactive. 

 

If I was to do the same, and report back here, people would still not believe me. 

 

Check out this link.  It specifically mentions "The pension is my sole source of income."

 

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

 

Could "Caro" from the ATO also be wrong? 

[KhunHeineken]

1 hour ago, 4MyEgo said:

 

 

Read it how you like, but I see no reason why it would be any different to Non Residents.

 

https://superguy.com.au/retirement/how-much-can-a-pensioner-earn-before-paying-tax/

 

 

Where does it mention in your link if the pensioner is residing overseas? 

[KhunHeineken]

1 hour ago, LosLobo said:

Hi, though it is extremely difficult for me to admit, I agree with KH here, sorry.

Not about agreeing with me, it's about the links I, and some others, have put forward that show the pension is deemed an income, the pension is taxable, and there is no tax free threshold in the non resident tax brackets, and then the proposed changes with the 183 day "bright line test." 

 

If you agree with the links, then say so.  It's not personal. 

[KhunHeineken]

1 hour ago, 4MyEgo said:

 

That's quite ok, we all have differences of opinions, especially when there isn't enough clarity in my opinion that states that Age Pensioners, because they are deemed as Non Residents, pay tax on their Age Pension.

 

Until such time that I also obtain such clarification, I will believe what I have researched and read, suffice to say, I cannot understand why some people (with respect) believe an Age Pensioner, because he/she chooses to reside overseas on Welfare (Age Pension), would be taxed any different to a Resident.

 

The above said, Age Pensioners do not pay tax unless they have other sources of income, on top of their Age Pension and that is my argument.  

 

https://superguy.com.au/retirement/how-much-can-a-pensioner-earn-before-paying-tax/

 

Feel free to read the link above and as it doesn't stipulate the word Non Resident, I still see no reason why the ATO would stick it to a Welfare recipient because he/she decides to reside overseas.

 

Did your research extend past more than just one link?

 

Surely you researched more than just this one link. 

 

As for "seeing no reason why the ATO would stick it to a welfare recipient" this is just opinion, and not worth much.  Can you post a link showing that the ATO "does not stick it to a welfare recipient?" 

 

Every link I have posted you have said is "wrong."  Can you post some link/s from some credible sources that state "non resident pensioner pay no tax?"   

[KhunHeineken]

53 minutes ago, Nemises said:

That’s my take as well.
 

Budget Night is getting closer and soon this speculation will all be over.  Until next year 🤦‍♂️

 

 

 

 

As I have said in the past, which is debatable, in my opinion, it's not if, just when.  The current Labor government never binned the proposed changes that were proposed by the previous Liberal government.  

 

Should Labor put them to parliament, why would the opposition block them? 

 

We all may escape them in the May budget, but they are coming for sure.   

[Nemises]

34 minutes ago, KhunHeineken said:

We all may escape them in the May budget, but they are coming for sure.   

 

"...coming for sure"   ???

 

That is not a fact, that is your opinion and opinions are similar to a$$holes.... everybody's got one. 

 

If and when they come, let's discuss it then. Until then, please spare us your scaremongering opinions.

[KhunHeineken]

22 minutes ago, Nemises said:

 

"...coming for sure"   ???

 

That is not a fact, that is your opinion and opinions are similar to a$$holes.... everybody's got one. 

 

If and when they come, let's discuss it then. Until then, please spare us your scaremongering opinions.

Yes, it's my opinion, but there are indications that it will be the case.  (links previously provided) 

 

How is discussing it "scaremongering?" 

[Nemises]

32 minutes ago, KhunHeineken said:

How is discussing it "scaremongering?"

Oxford dictionary:

the spreading of frightening or ominous reports or rumours.

 

 

32 minutes ago, KhunHeineken said:

[Nemises]

35 minutes ago, KhunHeineken said:

(links previously provided

You mean link singular. And it was a link to a measly discussion paper  which meant nothing. 

[LosLobo]

8 hours ago, KhunHeineken said:

Not about agreeing with me, it's about the links I, and some others, have put forward that show the pension is deemed an income, the pension is taxable, and there is no tax free threshold in the non resident tax brackets, and then the proposed changes with the 183 day "bright line test." 

 

If you agree with the links, then say so.  It's not personal. 

You seem to forget I am the one who first posted the link about Blake last year.

Do you remember Blake the guy you have dreamt of and fantasized about ever since.

I would post my contribution again so you could memorialize it, but it is too difficult to find in this monster of 620 reposts, that you have created, Herr Frankenstein.

[4MyEgo]

9 hours ago, KhunHeineken said:

Did your research extend past more than just one link?

 

Surely you researched more than just this one link. 

 

As for "seeing no reason why the ATO would stick it to a welfare recipient" this is just opinion, and not worth much.  Can you post a link showing that the ATO "does not stick it to a welfare recipient?" 

 

Every link I have posted you have said is "wrong."  Can you post some link/s from some credible sources that state "non resident pensioner pay no tax?"   

 

As you are aware, there is no link that states that Age Pensioners pay no tax, or that they pay tax.

 

I have posted links before and I have stated my opinion/s, and as it stands, as far as I am aware, Age Pensioners are not taxed on their pensions, i.e. unless they have additional income sources.

 

When I do find such a link that states that Age Pensioners do not pay tax on their Age Pension as non residents, unless they have additional income sources, the same as Australian Residents for tax purposes, you will be the 1st to know, but will you accept it then LoL

[4MyEgo]

11 hours ago, KhunHeineken said:

Did your research extend past more than just one link?

 

Surely you researched more than just this one link. 

 

As for "seeing no reason why the ATO would stick it to a welfare recipient" this is just opinion, and not worth much.  Can you post a link showing that the ATO "does not stick it to a welfare recipient?" 

 

I have said it till I have turned blue, Age Pensioners do not pay tax if their only source of income is the Age Pension.

 

Do you accept this or not ?

 

https://www.thenewdaily.com.au/finance/superannuation/2022/06/05/pension-taxable-income

 

Nowhere on the ATO website does it state that Age Pensioners have to pay tax when living overseas, do you agree ?

 

https://www.ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/australians-living-overseas

 

[LosLobo]

1 hour ago, 4MyEgo said:

 

As you are aware, there is no link that states that Age Pensioners pay no tax, or that they pay tax.

 

I have posted links before and I have stated my opinion/s, and as it stands, as far as I am aware, Age Pensioners are not taxed on their pensions, i.e. unless they have additional income sources.

 

When I do find such a link that states that Age Pensioners do not pay tax on their Age Pension as non residents, unless they have additional income sources, the same as Australian Residents for tax purposes, you will be the 1st to know, but will you accept it then LoL

 

With respect, you are trying to use a logical fallacy called an “Argument from Ignorance” or “Ad Ignorantiam.” commonly known as 'trying to prove a negative', to prove your argument.

This fallacy occurs when it’s assumed that a claim is true because it hasn’t been proven false, or it’s assumed that a claim is false because it hasn’t been proven true.

In this case, you are suggesting that because there is no link stating that Age Pensioners pay tax, it must mean that Age Pensioners do not pay tax.

Nevertheless, I suggest that there are links that say the aged pension is taxable income.

'Taxable government payments, pensions and allowances include age pension'

 

Government payments and allowances | Australian Taxation Office (ato.gov.au)
 

I can see where you are coming from there is a perception that if your aged pension payment is your only source of income, then you do not need to pay tax.

But the aged pension is still taxable and the reason for not paying tax in this case is only because of thresholds and offsets.

 

 

Ergo, according to the Australian Taxation Office (ATO), Australian non-residents who receive the Australian Age Pension are also subject to taxation but without the threshold.

 

As a foreign resident for tax purposes, you will pay income tax according to foreign resident rates.

 

This means for all income under $180k, you’ll pay 32.5c per dollar.

You’ll likely be eligible for the seniors and pensioners tax offset (SAPTO), meaning you’ll get a tax offset to help counter the tax payable.
 

[4MyEgo]

 

Double post

[4MyEgo]

1 hour ago, LosLobo said:

I can see where you are coming from there is a perception that if your aged pension payment is your only source of income, then you do not need to pay tax.

 

That is my strongest argument, "only source of income", i.e. as I have always maintained, if you have other sources of income, then that gets added on top and you are taxed appropriately.

 

If they do tax Age Pensioners as Non Residents, if they don't have any other source of income, then worse case scenario as I have mentioned in previous posts, it's $120 per week after SAPTO, which I believe isn't a great amount living here.

 

So you drop from 49,833 baht per month to 45,448 baht per month - (4,385 baht) per month, I suggest a single bloke can still live here on that amount.

 

[Will27]

10 minutes ago, 4MyEgo said:

 

As I have mentioned before, if that is the case, a worse case scenario would be that the pension would be reduced by about $120 per week after SAPTO.

 

SAPTO is available to all, not just age pensioners.

 

I will continue to dig into this, as I don't believe welfare is taxable, even for non residents, even if a non resident resides overseas and is an Age Pensioner, but like you said, need the proof, which is out there, or I am delusional.

It was really well articulated by LosLobo.

 

The pension is taxable, that isn't in dispute.

The only reason you don't pay tax on it if it's your only source of income,

is because of thresholds and tax offsets.

[Will27]

4 minutes ago, 4MyEgo said:

 

That is my strongest argument, "only source of income", i.e. as I have always maintained, if you have other sources of income, then that gets added on top and you are taxed appropriately.

 

If they do tax Age Pensioners as Non Residents, if they don't have any other source of income, then worse case scenario as I have mentioned in previous posts, it's $120 per week after SAPTO, which I believe isn't a great amount living here.

 

So you drop from 49,833 baht per month to 45,448 baht per month - (4,385 baht) per month, I suggest a single bloke can still live here on that amount.

 

Are your sums correct or have I got them wrong?

 

If you lose $120 per week, that's a lot more than 4385 Baht a month.

[4MyEgo]

7 minutes ago, Will27 said:

Are your sums correct or have I got them wrong?

 

If you lose $120 per week, that's a lot more than 4385 Baht a month.

 

It's been a while since I did the calculations, maybe it's per fortnight, I will revisit it, thx.

[4MyEgo]

35 minutes ago, 4MyEgo said:

 

It's been a while since I did the calculations, maybe it's per fortnight, I will revisit it, thx.

 

Correction, the per month reduced amount of the Age Pension would be 11.960 baht using 23 baht as the exchange rate for this calculation.

 

I previously used the fortnightly amount as the monthly amount, my bad, suffice to say the Age Pension for a single bloke, would still be reduced by $120 per week after the 32.5c in the $ was enforced, and SAPTO came off of that, meaning the pension amount would be around 38,000 baht per month, down from around 50,000 baht per month.

 

I would say that a single bloke could still live off of that here, rents are cheap, food is cheap and electricity isn't too bad, depending on where you live, that said, you wouldn't be running a car, a bike is doable.

 

Workings as follows:

$26,000 annual pension x 23 baht per $ = 598,000 baht -

a Non resident tax of 32.5c in the $ = $8,450 @ 23 baht - $2,230 SAPTO = $6,220 to the ATO.

 

Therefore $26,000 - $6,220 = $19,780 @ 23 baht = 454,940 baht/12 = 37,911 baht per month.

[Lacessit]

28 minutes ago, 4MyEgo said:

 

It's been a while since I did the calculations, maybe it's per fortnight, I will revisit it, thx.

The full OAP in Australia is $1002.50, not including allowances which are only paid when actually in Australia.

Equals $26,065 pa.

It seems to have escaped the notice of most posters the tax rate is reduced from 32.5 % to 30 % after July 1, 2024.

Tax on the above is $7820. Less SAPTO at $2230 = $5590

On current exchange rates, pensioners in Thailand would lose about 11,000 baht/month from their OAP, assuming the change ever happens.

[Will27]

9 minutes ago, 4MyEgo said:

 

Correction, the per month reduced amount of the Age Pension would be 11.960 baht using 23 baht as the exchange rate for this calculation.

 

I previously used the fortnightly amount as the monthly amount, my bad, suffice to say the Age Pension for a single bloke, would still be reduced by $120 per week after the 32.5c in the $ was enforced, and SAPTO came off of that, meaning the pension amount would be around 38,000 baht per month, down from around 50,000 baht per month.

 

I would say that a single bloke could still live off of that here, rents are cheap, food is cheap and electricity isn't too bad, depending on where you live, that said, you wouldn't be running a car, a bike is doable.

That is quite the decrease if it happens.

Especially for people who have commitments.

 

It will also drop below 40 000 Baht per month for those

who use it as a monthly income for a marriage extension.

 

I also imagine a lot of expats will have partners.

 

Some people will have no option but to make it work if they want to live here.

 

I'm still of the opinion it won't get passed.