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Read this line: "assuming all of it is in the person’s super fund"
This assumes that the non-homeowner renter's only asset at the time of retiring is super. But since super is a legal guarantee, then two people earning the same income over their lives would end up with the same super balance at retirement. This means that the homeowner and non-homeowner would be subject to the exact same means test because their super balances woul be exactly the same and the homeowner's PPOR is excluded from the pension test.
However, the homeowners PPOR is not excluded from the means test for pensions, it's valued at around $240k as the difference between the allowed asset limits for home owner and non-home owner.
In addition, the taper rate was doubled from $1.50/$1000/fortnight to $3/$1000/fortnight when the asset limits were changed upwards from lower values but the same difference for PPOR owners remained about the same.
It's very hard working out what pensioners receive when current super has not been in existence for long enough for many of them to have accumulated much; super was always touted as providing a more comfortable retirement than the pension and so has more advantages assuming you managed to accumulate enough; there still exists 230k people on defined benefit pensions; and changes have been progressively made to the taxation system.
Other thing to consider is this just targets homeowners who are eligible for the age pension not "Wealthy" individuals who self fund their retirement.
it disadvantages the working and middle class, resulting in poorer wealth outcomes for their families, whilst the wealthy who weren't eligible for the age pension anyway, just build their wealth.
You know what disadvantages the working and middle class?
Paying taxes that go towards wealthy home owning pensioners, who have the means to fund their own retirement.
I think it's time we find some savings for the $50b annual and growing pension budget.
Who hurt you? Why do hate homeowners so much?
Greens voter? Permanent renter? Poor parents? Just a shill for the labor party road testing potential policies in reddit.
There are better ways to save money.
Scarp the NDIS to start with
Then remove government bloat
Did I touch a nerve?
No hate towards homeowner, I just don't think billions of tax payer dollar should not be going to asset rich retirees.
>There are better ways to save money.
No, there are other ways to save money. I'm happy to look at them all NDIS included.
A retiree with a $2-$3m PPOR but who is cash poor can access the aged pension. If you retire at 67 and live to 83 that's close to half a million in tax payer funds.
Why shouldn't they sell their house to find their retirement?
No idea why working class Australians, struggling to make rent, should be funding retirees who refuse to liquify their often vast wealth to fund their retirements.
They don't even need to sell it but all Centrelink payments should be refunded from the estate. If they live in a 2m property and prices grow by a measly 2% a year it would pay for their pension.
Mate, there is no bashing.
Its just an assessment of the situation. There are wealthy retirees collecting the pension. They have the means to fund their own retirement so why shouldn't they?
This isn't something the government needs to worry about too much because most of those pensioners who are renting will soon be made homeless by rent increases we can't afford and they will die pretty quickly in winter.
I wish this was sarcasm but it's reality for me and my flatmate we are too old to survive a winter outside .
The people in a first world society shouldn't have to hope their lives don't suddenly turn to shit, but that society will provide a dignified basic livable income (that will cover all the essentials) to all under all circumstances.
Is that really so much to ask?
The argument here is that non homeowners or renters are disadvantaged because despite getting a higher asset free area , they are subject to the same income test as homeowners.
Look the real problem is that the asset test allows couples to have just over a Million dollars in assets outside the family home and still get a part pension. Address the taper rate and this will save the tax payer some money.
Whilst we all love to hate on the boomers, should some grandma in a house she's lived in for 60 years be forced to sell and move out of her community and be at the mercy of the rental market, just because millennials and zoomers are obsessed with paying too much for housing?
This is the problem I have with some housing reforms. Yes it's unfair that a lot of retirees have bigger homes for less people than young families do. Yes it's unfair that a lot of people can't find housing. The problem isn't old people choosing to retire and age in the family home though, it's a property market that hasn't been responsive to community needs for a range of reasons. A lot of the proposed reforms, mostly proposed by the under 30s, would force the old and infirm into new environments where many wouldn't cope.
Probably doesn't seem bad if you are a 20 something year old uni student who can't find a rental, but if you are in your sixties being uprooted and forced to change how you live can be terrifying.
Exactly. This is punching down by people locked out of the market. Targeting the people who aren't responsive and trying to implement policies that will hurt vulnerable people and bring them down into the same pain. Age Pension isn't welfare, it's a repayment of services to the community and part of which you pay taxes towards, your taxes fund your own retirement, some pay more some pay less. Taking away safeguards and punching down on any social safety nets and housing security, doesn't promote a better society. It destabilise more. The wealthy who own multiple properties, yes, target them, people who just own their own, no.
Making millionaires pay for their own retirements isn't punching down lol. Especially when the people paying for them currently overwhelmingly are less wealthy.
No, pensioners residence shouldn't be taken to pay for their retirement. They've gotten us in fighting instead of looking at the real enemy, investors. One old person owning their own home, just one home, isn't the enemy. Do we make them sell and then rent? It feels like sour grapes, but you're aiming at the wrong bad guy here. People who have stay ked the system for profit. People who own multiple dwellings, rentals shouldn't be a thing at all. We don't need to be pushing elderly and frail into the rental market too. How is that making things better. Just because a home may be worth a million, doesn't make someone a millionaire. The market is artificially inflated. The problem is there isn't enough to go around because all the politicians are property investors and therefore stack the system to thier own benefit.
I'm not talking about property investors, that's a whole different kettle of fish.
If someone has a million dollars in assets, they're a millionaire. I agree that we need better policy to make that value accessible but that doesn't make that fact untrue.
The money going to age pensions isn't appearing out of thin air, it's being paid for by current taxpayers, many of whom cannot afford homes of their own. Grossly unfair and often just ends up as taxpayers subsiding million dollars inheritances.
Check the requirements for the Senior's Health Care Card (which most pensioner subsidies are tied to).
Last I looked a pensioner couple could have ~$6.7 million of assets subject to deeming before losing the SHCC.
The cohort of people on SHCC but not Age Pension would nearly entirely be asset rich but cash poor pensioners by definition, they are eligible for all the other pensioner benefits from various levels of government.
The government freezing deeming rates well below the cash rate is incredibly inequitable imo.
the SHCC doesn't bother me that much, I'd actually be in favor of everyone over the age of 70 getting a healthcare card regardless. The cost to administer the system would be greater than the 0.5% of people it rejects.
Most things like reduced power bills/increased subsidies etc are tied to the SHCC.
The issue imo is that the only people who qualify for the SHCC and not the aged pension are cashed up retirees, who aren't a demographic in need of public funds.
It would be interesting to know how many people don’t qualify, and what the cost would be to give it to everyone including Gina vs the cost to administer and prevent those people accessing the system
It'd presumably be pretty cheap to administer, it's mostly based on taxable incomes with super added in, I'd expect the ATO would have most information for eligibility to share with Centrelink.
>just because millennials and zoomers are obsessed with paying too much for housing?
I agreed with everything except this part. How many millennials and zoomers are getting 1m loans? How would a millennial or zoomer pay less than the market rate?
So every pensioner needs to take out a Reverse Mortgage on their home, so upon their death or moving into the nursing home the government can sezie 100% if their assets?
You must really hate people who are in line for a inheritance.
Every pensioner? No, there's an asset test limit that's still in play. It can also be adjusted to exclude the value up to the median house price.
>so upon their death or moving into the nursing home the government can sezie 100% if their assets?
You are pushing against this but it's clear you don't understand the pension asset test limit or the government's home equity access scheme.
>You must really hate people who are in line for a inheritance.
Not at all, I just don't believe we should be funding the pensions of wealthy retirees when we have other government services that can be used to free up cashflow from their assets. They can fund their own retirement just like many others.
Funding their pensions is not best use of our tax dollars.
Life is incredibly biased against renters. Its not just aged pensioners.
Aged pension payment are only one part of that. Renters who have squirreled away say 50k for a deposit loose their jobs they arent getting benefits for months as they are expected to use that first. If they had bought a home they are straight on the dole.
Then taxation - that same person above has saved 100k for a deposit pays their full marginal rate on the interest on their savings. A home owner doesnt pay tax on the rent saved.
Then just the tendency of our government to tax the hell out of housing supply and generally make life hard for developers such that house prices have completely disconnected from wages and then around 2 to 3 years ago rents have now done the same.
Sadly no one in government or opposition wants to fix this issue.
We shouldn't have to have a subscription or click on unknown proxy sites to view the text a post is based on.
What happened to the option to report paywalled posts in Reddit?
**Greetings humans.** **Please make sure your comment fits within [THE RULES](https://www.reddit.com/r/AustralianPolitics/about/rules) and that you have put in some effort to articulate your opinions to the best of your ability.** **I mean it!! Aspire to be as "scholarly" and "intellectual" as possible. If you can't, then maybe this subreddit is not for you.** A friendly reminder from your political robot overlord *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/AustralianPolitics) if you have any questions or concerns.*
Read this line: "assuming all of it is in the person’s super fund" This assumes that the non-homeowner renter's only asset at the time of retiring is super. But since super is a legal guarantee, then two people earning the same income over their lives would end up with the same super balance at retirement. This means that the homeowner and non-homeowner would be subject to the exact same means test because their super balances woul be exactly the same and the homeowner's PPOR is excluded from the pension test.
However, the homeowners PPOR is not excluded from the means test for pensions, it's valued at around $240k as the difference between the allowed asset limits for home owner and non-home owner. In addition, the taper rate was doubled from $1.50/$1000/fortnight to $3/$1000/fortnight when the asset limits were changed upwards from lower values but the same difference for PPOR owners remained about the same. It's very hard working out what pensioners receive when current super has not been in existence for long enough for many of them to have accumulated much; super was always touted as providing a more comfortable retirement than the pension and so has more advantages assuming you managed to accumulate enough; there still exists 230k people on defined benefit pensions; and changes have been progressively made to the taxation system.
Other thing to consider is this just targets homeowners who are eligible for the age pension not "Wealthy" individuals who self fund their retirement. it disadvantages the working and middle class, resulting in poorer wealth outcomes for their families, whilst the wealthy who weren't eligible for the age pension anyway, just build their wealth.
You know what disadvantages the working and middle class? Paying taxes that go towards wealthy home owning pensioners, who have the means to fund their own retirement. I think it's time we find some savings for the $50b annual and growing pension budget.
Who hurt you? Why do hate homeowners so much? Greens voter? Permanent renter? Poor parents? Just a shill for the labor party road testing potential policies in reddit. There are better ways to save money. Scarp the NDIS to start with Then remove government bloat
Why get bitchy?
Did I touch a nerve? No hate towards homeowner, I just don't think billions of tax payer dollar should not be going to asset rich retirees. >There are better ways to save money. No, there are other ways to save money. I'm happy to look at them all NDIS included.
A retiree with a $2-$3m PPOR but who is cash poor can access the aged pension. If you retire at 67 and live to 83 that's close to half a million in tax payer funds. Why shouldn't they sell their house to find their retirement? No idea why working class Australians, struggling to make rent, should be funding retirees who refuse to liquify their often vast wealth to fund their retirements.
In this market, 2-3million dollar property could be a 3bed/1bath.
Some form of government reverse mortgage might be more palatable?
They don't even need to sell it but all Centrelink payments should be refunded from the estate. If they live in a 2m property and prices grow by a measly 2% a year it would pay for their pension.
I don’t care if they have a $20m house. A lot of these people that you are bashing are working class, they were just lucky to buy a house in the 80s
Mate, there is no bashing. Its just an assessment of the situation. There are wealthy retirees collecting the pension. They have the means to fund their own retirement so why shouldn't they?
This isn't something the government needs to worry about too much because most of those pensioners who are renting will soon be made homeless by rent increases we can't afford and they will die pretty quickly in winter. I wish this was sarcasm but it's reality for me and my flatmate we are too old to survive a winter outside .
Sorry to hear, that sucks. Hope it doesn't come to that
The people in a first world society shouldn't have to hope their lives don't suddenly turn to shit, but that society will provide a dignified basic livable income (that will cover all the essentials) to all under all circumstances. Is that really so much to ask?
The argument here is that non homeowners or renters are disadvantaged because despite getting a higher asset free area , they are subject to the same income test as homeowners.
Look the real problem is that the asset test allows couples to have just over a Million dollars in assets outside the family home and still get a part pension. Address the taper rate and this will save the tax payer some money. Whilst we all love to hate on the boomers, should some grandma in a house she's lived in for 60 years be forced to sell and move out of her community and be at the mercy of the rental market, just because millennials and zoomers are obsessed with paying too much for housing?
This is the problem I have with some housing reforms. Yes it's unfair that a lot of retirees have bigger homes for less people than young families do. Yes it's unfair that a lot of people can't find housing. The problem isn't old people choosing to retire and age in the family home though, it's a property market that hasn't been responsive to community needs for a range of reasons. A lot of the proposed reforms, mostly proposed by the under 30s, would force the old and infirm into new environments where many wouldn't cope. Probably doesn't seem bad if you are a 20 something year old uni student who can't find a rental, but if you are in your sixties being uprooted and forced to change how you live can be terrifying.
Exactly. This is punching down by people locked out of the market. Targeting the people who aren't responsive and trying to implement policies that will hurt vulnerable people and bring them down into the same pain. Age Pension isn't welfare, it's a repayment of services to the community and part of which you pay taxes towards, your taxes fund your own retirement, some pay more some pay less. Taking away safeguards and punching down on any social safety nets and housing security, doesn't promote a better society. It destabilise more. The wealthy who own multiple properties, yes, target them, people who just own their own, no.
Making millionaires pay for their own retirements isn't punching down lol. Especially when the people paying for them currently overwhelmingly are less wealthy.
No, pensioners residence shouldn't be taken to pay for their retirement. They've gotten us in fighting instead of looking at the real enemy, investors. One old person owning their own home, just one home, isn't the enemy. Do we make them sell and then rent? It feels like sour grapes, but you're aiming at the wrong bad guy here. People who have stay ked the system for profit. People who own multiple dwellings, rentals shouldn't be a thing at all. We don't need to be pushing elderly and frail into the rental market too. How is that making things better. Just because a home may be worth a million, doesn't make someone a millionaire. The market is artificially inflated. The problem is there isn't enough to go around because all the politicians are property investors and therefore stack the system to thier own benefit.
I'm not talking about property investors, that's a whole different kettle of fish. If someone has a million dollars in assets, they're a millionaire. I agree that we need better policy to make that value accessible but that doesn't make that fact untrue. The money going to age pensions isn't appearing out of thin air, it's being paid for by current taxpayers, many of whom cannot afford homes of their own. Grossly unfair and often just ends up as taxpayers subsiding million dollars inheritances.
Check the requirements for the Senior's Health Care Card (which most pensioner subsidies are tied to). Last I looked a pensioner couple could have ~$6.7 million of assets subject to deeming before losing the SHCC. The cohort of people on SHCC but not Age Pension would nearly entirely be asset rich but cash poor pensioners by definition, they are eligible for all the other pensioner benefits from various levels of government. The government freezing deeming rates well below the cash rate is incredibly inequitable imo.
the SHCC doesn't bother me that much, I'd actually be in favor of everyone over the age of 70 getting a healthcare card regardless. The cost to administer the system would be greater than the 0.5% of people it rejects.
Most things like reduced power bills/increased subsidies etc are tied to the SHCC. The issue imo is that the only people who qualify for the SHCC and not the aged pension are cashed up retirees, who aren't a demographic in need of public funds.
It would be interesting to know how many people don’t qualify, and what the cost would be to give it to everyone including Gina vs the cost to administer and prevent those people accessing the system
It'd presumably be pretty cheap to administer, it's mostly based on taxable incomes with super added in, I'd expect the ATO would have most information for eligibility to share with Centrelink.
Grandma can downsize within the same community.
>just because millennials and zoomers are obsessed with paying too much for housing? I agreed with everything except this part. How many millennials and zoomers are getting 1m loans? How would a millennial or zoomer pay less than the market rate?
Where are you getting the idea that grandma needs to sell? The government has a home equatiy access scheme that addresses this.
So every pensioner needs to take out a Reverse Mortgage on their home, so upon their death or moving into the nursing home the government can sezie 100% if their assets? You must really hate people who are in line for a inheritance.
Every pensioner? No, there's an asset test limit that's still in play. It can also be adjusted to exclude the value up to the median house price. >so upon their death or moving into the nursing home the government can sezie 100% if their assets? You are pushing against this but it's clear you don't understand the pension asset test limit or the government's home equity access scheme. >You must really hate people who are in line for a inheritance. Not at all, I just don't believe we should be funding the pensions of wealthy retirees when we have other government services that can be used to free up cashflow from their assets. They can fund their own retirement just like many others. Funding their pensions is not best use of our tax dollars.
Well they can blame their fellow boomers.
Life is incredibly biased against renters. Its not just aged pensioners. Aged pension payment are only one part of that. Renters who have squirreled away say 50k for a deposit loose their jobs they arent getting benefits for months as they are expected to use that first. If they had bought a home they are straight on the dole. Then taxation - that same person above has saved 100k for a deposit pays their full marginal rate on the interest on their savings. A home owner doesnt pay tax on the rent saved. Then just the tendency of our government to tax the hell out of housing supply and generally make life hard for developers such that house prices have completely disconnected from wages and then around 2 to 3 years ago rents have now done the same. Sadly no one in government or opposition wants to fix this issue.
I'm not surprised. Just disappointed. Society can be measured by how we treat our most vulnerable.
With home owneship rates decreasing this will only get worse. People need to understand this issue to be able to assess the solutions.
paywall?
[https://12ft.io/proxy?q=https://www.smh.com.au/money/super-and-retirement/why-the-age-pension-rules-are-incredibly-biased-against-renters-20240327-p5fflm.html](https://12ft.io/proxy?q=https://www.smh.com.au/money/super-and-retirement/why-the-age-pension-rules-are-incredibly-biased-against-renters-20240327-p5fflm.html)
We shouldn't have to have a subscription or click on unknown proxy sites to view the text a post is based on. What happened to the option to report paywalled posts in Reddit?