Australian Aged Pension

[KhunHeineken]

On 9/22/2024 at 12:39 AM, Lacessit said:

The age pension can only be taxed if it is transferred to Thailand. If it is left to accumulate in a Australian bank account, there's nothing Thailand can do.

I agree. 

 

That's the current state of affairs.  Nothing Thailand can do, but what about Australia?

 

When the proposed changes are passed, interesting for when the pension is coming to an Australian who is a non resident for taxation purposes, and can be easily proven so. 

 

You see, yourself, and many others, only see Thailand wanting to tax residents for tax purposes, but many don't want to even contemplate Australia wanting to tax non residents for tax purposes.  That's only for guys like Paul Hogan, right?   

 

No issue before, with the "domicile" law, but that's going to change, for sure.   

 

What pensioners want, when the proposed changes are passed, is to remain a tax resident of Australia, for the tax free threshold, and I have no idea how, when they are living full time in Thailand, but to also escape Thailand taxation, despite living in Thailand more than 180 days a year. 

 

Tough gig to pull off, particularly for pensioners, as the payer is also the taxer, which is Centerlink and the ATO.

 

 

[KhunHeineken]

On 9/22/2024 at 12:48 AM, Fat is a type of crazy said:

I haven't been keeping up with it that much but isn't the point that now your world wide income would be taxed. So in theory they may not know about anything not transferred but it would be taxable as such. With all the intergovernmental information transfers it may pop up I suppose. But a lot of water to go under the bridge till it is a thing. 

Correct. 

 

Times are changing. 

 

It's not rocket science to see the direction all of this is going. 

 

I look at it this way, basically, an Interpol, but for taxation of the masses.    No where to run, no where to hide, from the tax man.  

[KhunHeineken]

On 9/22/2024 at 2:18 AM, LosLobo said:

I would much prefer to pay my tax liability on the age pension in Thailand, where in my case it's approximately 7%, rather than face KH's prediction of an ATO 32.5% tax rate as a non-resident for tax purposes.

I believe it changed on the 1st July 2024 to 30%.  See below.

 

Now, I know what you would all like to think.  You are an Australian citizen, so not a foreign tax resident, but they are two completely different things.  

 

No, the below is not just for the super rich Chinese investing in Australia, or Paul Hogan. 

 

In the future, the law will be for every Aussie deriving an income within Australia, who has been outside Australia for more than 183 days. 

 

I agree.  I would rather be taxed for small in Thailand as a tax resident, than taxed for 30% in Australia, as a non resident. 

 

Interesting times ahead. 

 

Note below, from $0.   No tax free threshold for non residents of Australia for tax purposes. 

 

Foreign resident tax rates 2020 to 2025

Foreign resident tax rates for 2019–20 to 2024–25.

Foreign resident tax rates 2024–25

Taxable income	Tax on this income
0 – $135,000	30c for each $1
$135,001 – $190,000	$40,500 plus 37c for each $1 over $135,000
$190,001 and over	$60,850 plus 45c for each $1 over $190,

[KhunHeineken]

On 9/22/2024 at 4:00 AM, Lacessit said:

Part of the ATO's tax structure is the fact one can opt out of submitting a tax return if one's income is below the threshold, using a non-lodgment advice form.

There is no tax free threshold for non residents.  If you have a link to show there is, post it. 

 

As I have said, pensioners WANT / NEED to be a resident of Australia for taxation purposes, to avail themselves of the tax free threshold, but they live in Thailand full time.  How will they be able to continue this "domiciled" appearance, after the 183 day law is passed?  

 

On 9/22/2024 at 4:00 AM, Lacessit said:

I submitted the form three years ago. I have not heard from the ATO since. I have not filed a tax return for three years.

That's the luxury, or loopholes, of the current 90 year old laws.  They are set to change.  

 

On 9/22/2024 at 4:00 AM, Lacessit said:

I assume someone in the ATO looked at my returns for a few years prior to submitting the form, and concluded there would be no tax payable in future years.

In the future, the ATO will have information from immigration that you are a non resident for taxation purposes, thus, 30%.  

 

Immigration is already talking to Centerlink, hence the pension supplements being cut off after 6 weeks, despite expats not reporting their departure from Australian.  

There have been many reports of this.   

 

The ATO data base will line up also, and there will be no way to request a review, or appeal.  183 out is 183 out, in the same way 180 days in Thailand is 180 days in. 

 

On 9/22/2024 at 4:00 AM, Lacessit said:

I would have to be reinstated in the tax system before I could be taxed again. IMO I would be too small a fish to fry.

They will reinstate you for you. 

 

Why do you think you are running the show?  They are. 

 

On 9/22/2024 at 4:00 AM, Lacessit said:

As far as Thailand goes, I have enough non-taxable pre-2024 savings to last for 5-6 years.

I have a feeling it's not going to be as simple that. 

 

In my opinion, they will not understand, nor care, about any documents you may produce about pre-2024. 

 

Here's your bill, pay, or leave, or take us to Court and die trying. 

 

You'll pay, because the alternative is soooo much worse. 

 

 

[KhunHeineken]

On 9/22/2024 at 4:08 AM, Fat is a type of crazy said:

As has been said most  pensioners  don't need to lodge in Australia - pension is taxable but rebates would mean nil tax.

Correct.

 

On 9/22/2024 at 4:08 AM, Fat is a type of crazy said:

There's the residency issue but lets not go there.

The elephant in the room. 

 

On 9/22/2024 at 4:08 AM, Fat is a type of crazy said:

The only issue is that last sentence - I think what you state is the existing system - but I think now they are saying you are taxed on world wide income regardless of whether it is taken to Thailand.

Yes, and not just for guys like Paul Hogan. 

 

On 9/22/2024 at 4:08 AM, Fat is a type of crazy said:

As the other poster said the worst case likely is pretty low tax. The way they could catch up in a simple way is if they linked immigration and lodging tax returns but that's all likely years ahead if at all. 

Perhaps not as many years as you think. 

 

Computers doing most of the heavy lifting. 

[KhunHeineken]

On 9/22/2024 at 4:31 AM, Lacessit said:

If I really wanted to mess with bureaucratic heads, I could bring across just enough non - exempt funds to result in a tax bill of 5 baht.

How do you propose to get around the non resident tax bracket in Australia?  

 

As many members have said in the tax forum, it's not Thailand's tax rate you have to be worried about, it's your home country's tax we should be concerned about.

 

On 9/22/2024 at 4:31 AM, Lacessit said:

As you say, getting the entire structure in place will take years.

Perhaps in Thailand, but most of it is already in place in Australia.  Eg.  Cutting off the pension supplements after 6 weeks outside of Australia, despite the recipient not informing Centerlink they are leaving Australia.  

[CygnusX1]

26 minutes ago, KhunHeineken said:

The ATO data base will line up also, and there will be no way to request a review, or appeal.  183 out is 183 out, in the same way 180 days in Thailand is 180 days in. 

My understanding is that the proposed new legislation is not as clear cut as Thailand’s 180 days. If you genuinely maintain a domicile in Australia, and have certain long term links to Australia, you would still be a tax resident, while being present for less than 183 days, possibly need to be there minimum of 45 or maybe 90 days. Can’t see the Australian tax office declaring someone a non resident for tax purposes just because they had a 7 month round the world holiday post retirement.

 

For some wealthy people, it’s a big advantage to be non resident for tax purposes, and the tax office wouldn’t want to make it as easy for them as just being out of the country for 183 days. Of course, things don’t look so good for someone who’s obviously not been living in Australia for several years.

[KhunHeineken]

On 9/22/2024 at 6:11 AM, Will27 said:

Just waiting for KH to get off of his meds and see all of these new posts.

 

Looking forward to 50 plus replies that we're all wrong, Paul Hogan and non-resident tax.

I've been in Singapore for the F1, so catching up on some posts. 

 

Brought a wad of cash back.  Not over the declarable amount.  May just help lower any possible tax liability early next year.  I'm giving Thailand a chance this year.  

 

So, Will27, perhaps you can clarify, and go on the record.

 

Is the pension deemed an income?  Yes, or no? 

 

Is the pension taxable?  Yes or no?

 

Are expats who have been living in Thailand for several years non residents for tax purposes?  Yes or no?

 

After the proposed changes have been passed, will expats be able to continue to declare they are residents of Australia for tax purposes?  Yes or no? 

 

Is there are tax free threshold for non residents for tax purposes?  Yes or no? 

 

Are there any exemptions in the proposed changes for pensioners?  Yes or no? 

 

Is the non resident for tax purposes for income derived from Australia 30% from $0 to $135,000?  Yes or no?

 

Given your answers to the above questions, how do you propose any expats deriving an income from Australia escape paying no resident tax? 

 

Ah, so now the DTA gets wheeled out.  Good old Article 18 and Article 19.  Article 18 relies on the provisions of Article 19, and Article 19 is all about "Governmnet Service" and their pensions.  I have posted a youtube video, with input from a Chartered Accountant in Australia about it.  I posted it in the tax forum.  I'll post it here also.  Another member posted some screenshots from it.  No exemptions for the aged pension in the DTA.  Is that a yes or no from you? 

 

It's not about who is right and wrong.  It's about the correct answers to the above questions. 

 

Bear in mind, Centerlink already know when a pensioner is outside of Australia for 6 weeks, thus the cutting off of the supplements.  Many accounts of this in this forum.  Why is it difficult to contemplate they could also withhold 30% in non resident tax? 

 

Just waiting for you to get off your meds and deflect all of the above with a one line personal attack, but I am interested in why you, and every other aged pensioner, thinks the aged pension will stand outside of ANY non resident tax. 

 

If I could hear that argument with more than comments about Paul Hogan and Medicare Cards, I would be happy to consider replies.    

 

Sell it to me how YOU are right, and the answers to the above questions, and the below accountant, are wrong. 

 

 

[KhunHeineken]

On 9/22/2024 at 6:28 AM, TroubleandGrumpy said:

I was talking about returning to Australia and then getting the Pension and then leaving again.

Do you know how long before, with a half serious attempt at "pretending" you have the "intention" of staying? 

[KhunHeineken]

On 9/22/2024 at 6:45 AM, TroubleandGrumpy said:

My read is the same as several other tax lawyers - but the truth is others have said they think it is taxable.

That's the way I read it, and has been said by tax professionals.  The aged pension is not exempt under the DTA.  That's it.  Happy to read any other links etc. 

 

On 9/22/2024 at 6:45 AM, TroubleandGrumpy said:

MO are just touting for business and reading it the way they want to read it - it is ambiguous.

Article 18 relies on the provisions of Article 19, and Article 19 is about government service pensions, not the aged pension.

 

On 9/22/2024 at 6:45 AM, TroubleandGrumpy said:

But at this point I have not found or heard of any Pensioner paying income taxes to Thailand.

True, and I haven't heard of anyone earning a passive income in Australia being taxed in Thailand also, including myself. 

 

Why do you think they want to update 90 year old laws? 

 

On 9/22/2024 at 6:45 AM, TroubleandGrumpy said:

I think the issue is not so much a legal one 'is it taxable' - IMO the issue is will TRD try to tax retired Expat's Pensions.

The TRD won't miss their chance to make "something" out of this. 

 

As said before, it could be as simple as 1000 baht for a TRD certificate for the annual extension, and have nothing to do with the correct amount of tax one should pay. 

 

It could all end up being laughable. 

[KhunHeineken]

On 9/22/2024 at 6:46 AM, TroubleandGrumpy said:

STFU mate - he is asleep or something 😁

I was at the Singapore F1, and lowering my Thai tax liability at the same time. 

[KhunHeineken]

On 9/22/2024 at 10:26 AM, scorecard said:

" Income earned inside Thailand during retirement is the only income subject to tax, while personal income from pension, interest, or other income sources in your home country is not subject to income tax in Thailand. This creates a 100% tax-free retirement in Thailand."

Do you think it's going to 100% tax free living in Australia, also? 

 

 

[KhunHeineken]

On 9/22/2024 at 10:29 AM, scorecard said:

 

If correct, good news for Aussies living in Thailand and dependant on regularly receiving  OAP transfers into Thailand, and no other income.

No mention of Australia and world wide tax.  Have you considered it? 

[KhunHeineken]

On 9/22/2024 at 12:15 PM, norbra said:

Exactly what was quoted to me when I applied for a TIN at BKK Revenue department for personal tax.

My application was denied as I had no income from Thai employment.

But you have world wide income, right? 

 

Watch this space. 

[KhunHeineken]

On 9/22/2024 at 5:47 PM, georgegeorgia said:

I never promised you a rose garden!

And governments never promised you a tax free retirement. 

[KhunHeineken]

On 9/22/2024 at 7:30 PM, scorecard said:

After transferred to Thailand, taxed by: Australia or Thailand or both?

It's Australia's 30% that is the most concerning.  Thailand's tax is chicken feed. 

[KhunHeineken]

On 9/23/2024 at 12:00 AM, norbra said:

 

i

If I had applied for a  TIN for withholding tax purposes I am sure it would have been  approved

Why didn't you? 

 

They like bureaucracy here.  Also, can't hurt to have a TIN up your sleeve,  

[KhunHeineken]

On 9/23/2024 at 12:37 AM, Lacessit said:

As yet, there is no indication the 32.5% tax rate for non-residents will apply to those whose sole income is the OAP.

Changed to 30% on 1st July 2024.

On 9/23/2024 at 12:37 AM, Lacessit said:

It MAY be taxed after transfer to Thailand. Again, there is no indication the TRD intends to tax pensions from any country.

At this stage, but they have given warning of of world wide taxation.  They have signed up for it. 

 

I have posted Article 19 of the DTA deals with "government service pensions."  Posted a youtube video about it also.  Are they wrong?  

 

On 9/23/2024 at 12:37 AM, Lacessit said:

I guess the first person to have their pension taxed will let us know quite speedily.

By Australia, after the proposed changes are passed, or by Thailand, early 2025? 

 

 

On 9/23/2024 at 12:37 AM, Lacessit said:

Due to double tax agreements, it's highly doubtful a pension could be taxed in both Australia and Thailand.

 

Foreign resident tax rates 2020 to 2025

Foreign resident tax rates for 2019–20 to 2024–25.

Foreign resident tax rates 2024–25

Taxable income	Tax on this income
0 – $135,000	30c for each $1
$135,001 – $190,000	$40,500 plus 37c for each $1 over $135,000
$190,001 and over	$60,850 plus 45c for each $1 over $190,000

[KhunHeineken]

On 9/23/2024 at 1:07 AM, LosLobo said:

You mention that the Age Pension won’t be taxed due to the taxable threshold, but non-residents don’t benefit from a tax-free threshold.

Something discussed months ago, yet, some either forgot, disbelieve, or refuse to accept. 

 

On 9/23/2024 at 1:07 AM, LosLobo said:

Non-residents are taxed at 32.5% on all Australian-sourced income, from the first dollar.

Changed to 30% recently.  Not much better though. 

 

The pension is deemed and income. 

 

The pension is taxable. 

 

Expats are non residents, but hey, it's only for guy guys like Paul Hogan. 

 

Centerlink know you are outside Australia, but fear not Centerlink, it's the TRD an Aussie pensioner must fear. 

[KhunHeineken]

1 hour ago, CygnusX1 said:

My understanding is that the proposed new legislation is not as clear cut as Thailand’s 180 days. If you genuinely maintain a domicile in Australia, and have certain long term links to Australia, you would still be a tax resident, while being present for less than 183 days, possibly need to be there minimum of 45 or maybe 90 days. Can’t see the Australian tax office declaring someone a non resident for tax purposes just because they had a 7 month round the world holiday post retirement.

 

For some wealthy people, it’s a big advantage to be non resident for tax purposes, and the tax office wouldn’t want to make it as easy for them as just being out of the country for 183 days. Of course, things don’t look so good for someone who’s obviously not been living in Australia for several years.

46 days inside Australia every 3 years should see you ok, but that will come out in the wash. 

 

Is that the majority of expats living in Thailand?  Many haven't been back to Australia in several years. 

 

Any advice for those guys, and they are many? 

 

 

[Nemises]

5 hours ago, KhunHeineken said:

So, after being away for years, if over 60, can one fly straight back to Australia and claim Newstart, whilst waiting for the aged pension and portability? 

 

Do you have to re-establish residency for Newstart?

Yes, you can claim the dole the moment you walk off the plane after living abroad, aged over 60 
 

No, you don’t have to re-establish residency to get the dole.

 

Dole payments maybe delayed if you have too much cash in the bank. 
 

 

[Nemises]

Think you would have been better off staying in Australia, owning your own house there and living on the pension?

 

Think again.

 

 

 

[Fat is a type of crazy]

On 9/22/2024 at 4:45 PM, TroubleandGrumpy said:

Here is the DTA - australia : article 1-5 | The Revenue Department (English Site) (rd.go.th)

 

Do you have legal contracts training and experience - I do - many years of it.

My read is the same as several other tax lawyers - but the truth is others have said they think it is taxable.

IMO are just touting for business and reading it the way they want to read it - it is ambiguous.

 

But at this point I have not found or heard of any Pensioner paying income taxes to Thailand.

The current law/rule is that if earned this year (as the Pension is) you pay tax this year - if it is remitted. 

 

I think the issue is not so much a legal one 'is it taxable' - IMO the issue is will TRD try to tax retired Expat's Pensions.

 

Your experience in contracts would normally mean you would not have an opinion positive or negative - based on the agreement itself - unless you can point to a paragraph that suggests it is excluded. You say other tax lawyers think it is excluded  - but apparently none of them put it to writing. So your opinion appears to be based on heresay which is fine but keep in mind that is based on past experience and we are talking about proposed new laws.

I am not saying it is or not but I can't see anything to exclude it and apparently you can't either. 

[georgegeorgia]

5 hours ago, Nemises said:

Yes, you can claim the dole the moment you walk off the plane after living abroad, aged over 60 
 

No, you don’t have to re-establish residency to get the dole.

 

Dole payments maybe delayed if you have too much cash in the bank. 
 

 

Probably be better off financiallu if you can get the Disability pension,I believe you can also receive it living  overseas ?

I'm thinking about going for the DSP and not touching my super 

 

[Lacessit]

5 minutes ago, georgegeorgia said:

Probably be better off financiallu if you can get the Disability pension,I believe you can also receive it living  overseas ?

I'm thinking about going for the DSP and not touching my super 

 

I suppose it depends on whether Munchausen's syndrome is a recognized medical condition.

[georgegeorgia]

5 minutes ago, Lacessit said:

I suppose it depends on whether Munchausen's syndrome is a recognized medical condition.

Must admit I have never heard of it

Will have to research 

[Peterw42]

29 minutes ago, georgegeorgia said:

Probably be better off financiallu if you can get the Disability pension,I believe you can also receive it living  overseas ?

I'm thinking about going for the DSP and not touching my super 

 

You cant get disability pension overseas, that was shut down years ago.

 

[CygnusX1]

9 hours ago, KhunHeineken said:

46 days inside Australia every 3 years should see you ok, but that will come out in the wash. 

 

Is that the majority of expats living in Thailand?  Many haven't been back to Australia in several years. 

 

Any advice for those guys, and they are many? 

No, afraid I have no advice for those guys. If I did know of a way around it, I’d have been  living in Thailand full time for the last six years myself. Instead, I’m forced to permanently lock up a large amount of money in my flat in Australia, along with paying thousands each year in council tax, body corporate fees, fixed charges for electricity and water, air fares between Sydney and Bangkok. I do save on health insurance that I would have had to purchase were I living in Thailand full time.

 

 

[4MyEgo]

16 hours ago, KhunHeineken said:

What I am getting at is, what about prior to turning pension age?  Could one go back to Australia, rent a little 1 bedroom unit somewhere, get the electricity / gas connected, maybe buy a cheap secondhand car, join the local bowlo etc etc, and BS Centerlink with these documents to only have to do 6 months to achieve portability, immediately on their pension birthday?

 

I would think there would be a question or more in the application form, e.g. have you resided overseas in the last 12 months, if yes, for how long, etc, etc, etc, then I would imagine if you answered no, they would do a check with border control, then your busted.

 

16 hours ago, KhunHeineken said:

Or, is there a define amount of time, like the 2 years, one must return to Australia BEFORE pension age, or could one BS their way with the above appearance of their "intention" to remain in Australia?  

 

There is no discretionary power to allow portability of Age or DSP during the 2-year period (note, some exceptions to the 2-year rule apply - see below).

 

Payment may be suspended for short overseas absences during the 2-year period and does not have to be reclaimed on return to Australia. A short absence from Australia (as long as the person is still classed as an Australian resident) will not impact on the end date of the 2-year period (that is, the absence still counts towards the person's 2-year period).

 

16 hours ago, KhunHeineken said:

As mentioned, 6 months before is a lot easier than 2 years after.  

 

Is it possible?   

 

Why do you think that they have the 2 year rule, it's there to stop people returning to claim the OAP and F off again.

 

Anyone good with math who doesn't want to live in a caravan or a depressing room for those 2 years, knows the cost on rent doesn't really recoup those 2 years, especially if living in Sydney where a one bedroom unit will set you back more than the OAP.

[4MyEgo]

12 hours ago, KhunHeineken said:

There is no tax free threshold for non residents.  If you have a link to show there is, post it. 

 

As I have said, pensioners WANT / NEED to be a resident of Australia for taxation purposes, to avail themselves of the tax free threshold, but they live in Thailand full time.  How will they be able to continue this "domiciled" appearance, after the 183 day law is passed?  

 

https://www.etax.com.au/aged-pension/