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Super matters no media wants to let people know

September 6th, 2017 No comments
6th Sept 2017

Debate: is the new means test for the aged pension fair?

The meanest means-test of the age pension.
The Australian government provides every retired person with the safety net of the age pension, subject to the means test.

According to the means test of income, a single pensioner loses 50 % of the age pension after his/her income exceeds $162 a fortnight or $4212 per annum; a couple loses after an income of $4288.00 per fortnight or $7488.00 per annum.
If a single self funded retirees income falls below $1896.00 per fortnight or $49296.00 a year, or a couples income falls below $2902.00 per fortnight or $75452.00 per annum they can claim a part age pension.
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No media wants to print this super data.

September 3rd, 2017 No comments
3’rd Sept

Debate: is the new means test for the aged pension fair?

The meanest means-test of the age pension.
The Australian government provides every retired person with the safety net of the age pension, subject to the means test.

According to the means test of income, a single pensioner loses 50 % of the age pension after his/her income exceeds $162 a fortnight or $4212 per annum; a couple loses after an income of $4288.00 per fortnight or $7488.00 per annum.
If a single self funded retirees income falls below $1896.00 per fortnight or $49296.00 a year, or a couples income falls below $2902.00 per fortnight or $75452.00 per annum they can claim a part age pension.

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The rotten systems and is there an alternative

January 8th, 2017 No comments

The Rotten Systems, and is there an Alternative?

The so called Civilizations since mankind came out of the cave, or maybe  down from the trees have hardly changed over thousands of years, because we are now as brutal to each other as they were in the stone ages; the only difference is, that thousands of years ago, men fought each other with sticks and stones, and now destructive weapons are used to the point that the planet on which we live could be completely destroyed in matters of minutes, if the potent weapons, designed by very clever people, put into the hands of not so clever, so called leaders, be they Kings, Dictators or just Politicians, and none of the latter display any scruples or courage to speak up against what should be spoken up against.

But in the so called Democracy, are the Politicians only to be blamed?

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The impact of the superannuation means test on the average worker …

January 18th, 2015 No comments

 

The problem with the Australian superannuation system, is, that even after a working- lifetime of contribution, the majority of retirees will still depend for a large part of their retirement income on the age pension, and being held close to the poverty line, by the means test of the age pension, while the self funded retirees will live in opulence.

… in my humble opinion, it would be very appropriate if a much watched and noted program like Four Corners would bring the “Great Australian super fraud” to the attention of the general public.

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Means test of age pension creates two classes of citizens

July 20th, 2014 No comments

5th July 2014

Dear Mr.Southcott.

Thank you for your letter of the 25’th of June 2014 in which you state “There have been no adverse changes to the superannuation system for self-funded retirees”, and then you give some figures on pensions and their indexation, all of which I,am well aware, because they are easily accessible either from Centrelink or government data.

 My concern is the means test of the age pension.

By using the means test for the basic age-pension, the government splits the Australian retirees into two groups; the 80% of either full or part-pensioners, which are greatly affected by the means test, and the other 20% of self-funded retirees, who greatly benefit from the tax-free super, if the income is derived from a so-called taxed fund, and the recipients of large defined super income, with more than $200,000 of super, who benefit to the tune of $20,000 from the 10% tax offset, which is more than a single pensioner receives in age-pension.

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Government dodges super elephant

May 9th, 2014 No comments

Government dodges the super elephant.
Superannuation tax breaks described by Australia Institute as the Hindenburg of the federal budget
AM, by James Glenday
Audio: Think tank wants big change to retirees’ benefits (AM)
“Superannuation concessions are unfair … the top 5 per cent of income earners get a third of the benefit, and the bottom 20 per cent get literally nothing.”

The report suggests scrapping concessions entirely, introducing a universal or non-means-tested age pension and upping the current rate by about 7.5 per cent to $26,273 a year for singles and nearly $39,611 for couples.

The Australia Institute says that plan would cost about $52 billion annually, leaving the budget between $13 billion and $22 billion better off. It says more money would flow to women and poor people.

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Safety net of age pension

February 1st, 2013 No comments

Super changes
Now the government proposes some changes to the unsustainable tax concessions for super, and the super industry, the self funded retirees are all up in arms.
Will the government have the courage and abolish all tax concessions for super, abolish the means test of the age pension and the government can be in surplus immediately.
There is talk about tax on withdrawals over certain limits, but why would any retiree withdraw more than he/she needs from a SMSF which pays no tax on its earnings. Its a no-brainer.

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Treatment of three different retirees

January 11th, 2013 No comments

This is how different groups of current retirees are treated.

Retiree: 1)
Worked for 45 years and paid taxes, but did not accumulate enough assets to be completely independent of the age-pension. For every dollar of extra income for him and his wife above $6,500, the couple loses $0.50 of age pension, and if their income exceeds $45,000 per annum, the couple will pay tax of $0.315 in the dollar including medicare levy, leaving them with an income of $0.185 from every dollar extra income. For the defined benefit income a 10% tax-offset applies if paid from an Australian super fund, but not if the income comes from an overseas fund.
Retiree 2)
Has accumulated assets of $1.5million,mostly with huge tax concessions, and the assets are in a so-called taxed Self Managed Super Fund. To be very conservative, the assets are in a term deposit earning 7.0% income of $122,500 per annum and even if the retiree is single, he/she will not pay a cent of tax.
Now if the assets are in fully franked shares, like banks and return $100,000 worth of franked dividends, he/she will again pay no tax on the dividend, and the government will send him/her a cheque of $30,000 for the franking credits.
Retiree 3)
Is an ex-politician or highly paid public servant, in receipt of a defined benefit pension of $100,000, on which he/she will have to pay tax, but he/she gets a 10% tax offset, which equals %10,000 after reaching retirement age, but before retiring, the public servant can establish a SMSF and contribute into it extra with tax concessions if the $25,000 total for under fifty and $50,000, if over fifty is not exceeded and in addition he/she can contribute $150,000 from after tax income, and the earnings from the SMSF will only attract 15% tax, and when the person reaches the age of 60 even the income will be completely tax-free from the SMSF.
Retiree’s 2) are well represented by the media and the super industry and retiree’s 3) are represented by the government and ironically by the leadership of various retiree Associated, like ACPSRO and its affiliated Associations, but who represents retiree’s 1) who are robbed of a decent standard of living in retirement by the means-test of the age pension
What is the fairest solution; scrap the mean test of the age pension and scrap all tax concessions for super.

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ACPSRO on means test of age pension

January 1st, 2013 No comments

ACPSRO Australian Council of Public Sector Retiree Organisation.
On means-test of the age-pension
The means test of the age pension keeps, and will keep the retirees dependent on some age pension, and that is some 70% of retirees, close to poverty line, while retirees with incomes well above the age-pension entitlements enjoy tax concessions in excess of the age pension, if their income comes from a so-called taxed super fund, which accumulated the assets with huge tax concessions.
Tax-free super for over-60s remains in place
By Trish Power on December 16, 2012
Filed under: Accessing super, Retirement planning, Super & tax
Although there has been a lot of scaremongering in the media about the federal government clawing back promised tax concessions from superannuation fund members, this has not occurred. Tax-free super for over-60s remains in place – thank goodness!
Tax-free super has always been a feature of Australia’s retirement system but, before July 2007, you usually had to hire advisers and get involved in creative gymnastics to make it happen — not unlike what you still have to do to secure tax-free income when you retire before the age of 60. And before July 2007, how much super you could receive at concessional rates was limited.
Is this a fair social system? The majority of the retirees are kept as poor as possible, while rich retirees virtually swim in money.
The tax-free super was introduced by John Howard in 2007, but Trish Power writes that with financial know-how, it was even available then.
With the Labour government, one would think that it would rectify this unfair anomaly, but no such thing; because all the politicians and ex-politicians benefit from the tax-free super.
When Howard introduced the tax-free super for over sixties, if the income came from a taxed fund, he had to give the recipients of defined benefit super, also some benefit, which came in the form of the 10% tax-offset for their super income, but this was denied to recipients of super from overseas funds. At the same time, the means-test for the age pension was relaxed, by reducing the age pension for part-pensioners by only $0.40 of every dollar extra income instead of a reduction $0.50; but this only lasted for a short time, because when the government increased the pension for single pensioners, it reversed the previous change, by bringing the reduction for part-pensioner back to $0.50 in the dollar, thereby the increase of the pension for single pensioners was paid by the part-pensioner.
How can the government get away with this unfair treatment of part-pensioners by using the ‘meanest’ means test of the age pension, for which the majority of the pensioners paid taxes for at times 45 years or plus of their lives?
1. There are a number of Associations, mostly affiliated to ACPSRO
(Australian Council of Public Sector Retirees Association), of which SCOA, would probably be the largest, then the SA Superannuants, Defence Force Welfare Association, etc.
The majority of the members of these Associations are on super of $25-30k and are dependent on a part Centrelink pension, yet the leadership of these Associations did nothing when the tax-free super was introduced, or the reversal to the higher means test took place.
If these Associations would urge their members to vote against politicians who oppose the abolition of the means test of the age pension, the politicians would soon change their mind and start listening to their voters. The best example is the powerful American Rifle Association.
As long as the leadership of these Associations remain silent on this issues, they are tacitly approving the policies of the government and not truly representing the welfare of the majority of their members, and that is just not fair.

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Safety net of age pension

November 22nd, 2012 1 comment

Safety net of age pension.

The Australian government provides a financial safety net for any person above certain age and other qualification, in the form of the basic age-pension, which it means tests for both income and assets, yet it provides very generous tax concessions for people of considerable assets or income, which now equal the cost of the age-pension.
Would it not be more sensible and fairer for the government to abolish the means test of the age pension and abolish the tax concessions for super.

This is what the select committee had to say about the means test of the 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.

Why does the Australian government persist with the unfair treatment of the retirees, punishing the lower income ones with the means test of the age pension, while giving the rich retirees huge tax concessions?

I have put this question to numerous politicians, from all the parties and independents, yet none has so far given me a reasonable answer, to what I consider a reasonable question.

Why can all the politicians just ignore my question? Because I seem to be the only one asking it.

Who gives the politicians security that this unfair social treatment of the majority of age pensioners will not affect their chances of re-election at next election: It is organizations which should protect the interests of the age pensioners on low incomes, like COTA( Council on the aging), ACOSS, Australian Council on Social Service, ACPSRO,Australian Council Public Service Retirees Organization and its affiliated Associations, which are opposing a Universal Age Pension and are therefore endorsing the governments policy which keeps low income pensioners poor, yet almost seventy per cent of their members are on moderate incomes and are greatly affected by the means test of the age pension, while the rich pensioners are gallivanting all over the world, spending money outside the country which should be spent in Australia to support local businesses; Gerry Harvey must have missed his opportunity in broadcasting this.

The other influential group which tacitly supports the government, to keep the lower income earners and pensioners poor, are the Australian Union bosses, many of which sit on Superannuation Funds boards, earning incomes of $500,000, as is the case of David Atkin of industry superannuation fund, Cbus.

Then there are retirement scheme operators, which never miss an opportunity to remind the government to raise the compulsory super contribution to 12%;
Ms.Reynolds chief executive of the Australian Institute of Superannuation Trustees was reported as saying,” The move to 12 per cent needs to go ahead regardless”. Pauline Vamos also never misses an opportunity to promote the raise of super contributions to 12per cent.

It is not hard to see, for whose benefit the compulsory super was introduced; the super industry, union bosses, who earn large fees or union bosses who collect nice incomes for sitting on boards of industry super funds.

The SMSF’ owners are also very pleased with the large tax concessions for super, and should their income in retirement fall below a certain level, they can and will always avail themselves of the age pension.

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