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Means test of the age pension

July 10th, 2012 No comments

Means test of Australian age-pension.

As mentioned in the “Select Committee on Superannuation” report of 2003, Australia is the only OECD country which has a means test for the basic pension, and it is mean.
The Report’s recommendation for a review of the employment-superannuation nexus errs on the side of caution. This caution is well justified since it opens up a much broader debate on the structure of Australia’s retirement income system, including proposals for a universal pension than that originally envisaged in the terms-of-reference. The fiscal impact of widening the spread of tax concessions is also unclear.

This is what the ‘Select Committee on Superannuation” said, yet the government then just simply ignored it.
The means test of the age pension affects mostly retired superannuants, whose income is from “untaxed funds” and whose super is less than $30,000 per annum.

There are several Associations to represent these retirees, the main one being the “SA Superannuants Association, Superannuated Commonwealth Officers’ Association (SCOA), RETIRED DEFENCE OFFICERS ASSOCIATION – RDOAINDIA.According to their records, the majority of these Associations members are in receipt of less than $30,000 per annum, yet the leadership of these Associations will not pursue the abolition of the means-test of the age pension, and introduction of a Universal age pension, yet it would be the fairest outcome as mentioned by the Select Committee on Superannuation,

SA Superannuants Newsletter.
Letter from a member
Three pillar retirement policy
Australia has a three-pillar approach to the provision of retirement incomes, the three pillars comprising a means tested age pension and associated social security arrangements, compulsory superannuation savings through the superannuation guarantee arrangements, and voluntary superannuation and other private savings.(Quoted by Bill Shorten) .
This is very convenient for the government to keep the age pensioners which depend to some degree on the age pension as poor as possible by the means testing of the pension, while the voluntary and private savings provide the retirees in this group with huge tax benefits.
When the Howard government introduced the tax-free super for the over sixties, if the income came from a taxed fund, this gave people on high incomes huge tax savings possibilities.
According to OECD, Australian pensioners are the second poorest, after Ireland, among the OECD countries, and this is due to the means testing of the age pension. I have written numerous letters to politicians of all persuasions, complaining about the unfair treatment of the age pensioners, who, like myself, have been robbed of a decent standard of living in retirement. It would take too much space in the Newsletter, to place some letters that I wrote to Bill Shorten and others, but they can be accessed on my website “hawilspoint” or simply on Google by typing in “The great Australian Super Fraud”.
Mr.W.Hawil

Editors’ note: Willi Hajszan is an advocate of a universal age pension. This is not supported by the Executive Committee but interested members can find out more about Willi’s arguments by referring to the sources he has provided.

This note would be more appropriate, if it said; “The committee is mainly interested to look after the interests of the top 30% of the members who benefit almost as much, or more from the 10% tax offset, than they would be from a Universal age pension”.

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