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Heads up for people on or wanting the age pension

Bluey's Dad
in General Discussion

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Hi All,

I don't want this to get all political but just a heads up for people receiving (or planning to receive) the age pension.

Looks like the government is likely to pass a bill changing the way income is assessed from account based pensions.

http://www.humanservices.gov.au/corporate/publications-and-resources/budget/1314/measures/older-australians/29-10728

If you're looking at retiring after 1 Jan 2015 and you need the age pension, you'll want to look at this.

Obviously not relevant to the more wealthy amongst us, but worth looking into if you're on the pension or planning to claim it.

Worth noting that if you're already on the pension you can keep your current concessional rules under the income test as long as you continuously receive a social security payment.

PS - Please don't turn this thread into a political debate over who's legislation this is and who broke what promise or social welfare policy. I figured a lot of the readers here would be in the retirement or pre-retirement age bracket and might find this interesting.

  • Quote
    • 1 month later...
     

    Choke this could eventuate to be the most important topic on Demonland ever and its being totally ignored .

    Almost 2 months after you started it, today its not only open to conjecture about the unsustainable aged and disabability pension

    affordability to our country but all other forms of welfare payments are also " on the table " .

    I'm loathe to quote the Kiwi factor which was also mentioned without substansciated facts.

    Please keep the heads up coming

  • Quote

    thanks for the alert PK and the original article choke.

    Probably ignored as this is the first of many reviews and changes that will occur and you will need to check with the appropriate advisor when your time comes to access or utilise.

    The most interesting comment was "Obviously not relevant to the more wealthy amongst us"

  • Quote
    • 3 weeks later...
     
    • Author

    thanks for the alert PK and the original article choke.

    Probably ignored as this is the first of many reviews and changes that will occur and you will need to check with the appropriate advisor when your time comes to access or utilise.

    The most interesting comment was "Obviously not relevant to the more wealthy amongst us"

    Correct. This policy has no effect on wealthy people as they don't receive the age pension anyway.

    Even more staggering, it will actually LIMIT the choices people have.

    For example:

    You have a pension account with company A now. It's fine and you're happy. But 3 years down the track, you see that the admin has turned to crap and the returns are horrible. You want to roll over you funds to Company B. Normally, this would be fine. Under the proposed laws though, rolling to a new account with a new company constitutes a new pension, which means you'll be subject to the new deeming rules and your centrelink age pension may reduce. All because you don't like Company A any more. The legislation does not allow the grandfathering of the old deeming rules to carry over when you change providers, even if the account is the same amount. It's a really silly oversight that will force people to retain their current (possibly inferior) pension products simply to retain their deeming rules.

    Worth noting that if you don't receive the age pension (ie have over $1.1m in assets excluding your home), you will be able to move to whatever product you like. Wealthy people will retain their right to chose their financial products, where the poorer amongst us have to take into account reduction in centrelink pension income vs the better product.

    This policy will save the government on paying out some age pensions. Good for the government, but bad if you happen to be ON the age pension.

    The policy won't even let someone start a transition-to-retirement pension now to lock in the rules and roll into full pension later. They say the full pension counts as a new account and therefore the rules will not be grandfathered.

    This is an extraordinarily important issue that the media just hasn't given much attention to. I hope that they do before 1 Jan 2015.

    I haven't heard of any changes to the originally proposed legislation since my OP, but I'll update if I hear more.

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