Budget could see big changes to Age Pension, tax and super, says BT

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Budget could see big changes to Age Pension, tax and super, says BT

3 yrs ago

josh frydenberg

The government may consider significant changes to the Age Pension and the taxation of super in the budget this year, says BT Technical Services.

BT head of financial literacy and advocacy Bryan Ashenden said given the impact of COVID-19, the federal budget, due to be handed down on 6 October, could be a very interesting one.

“If the government wants to make some significant changes to the way things have worked in the past, they may decide this is the time to do it,” he said.

Depending on the outcomes of the retirement income review, the government may consider changes to income testing and asset testing for the Age Pension, said Mr Ashenden, who added that it could increase the preservation age to encourage people to work for longer.

“Is it a time where [they decide] to change the taxation of the superannuation system? Where we move from a 15 per cent flat rate and zero per cent rate in retirement to having some taxation on earnings? Will it become the marginal tax rate less 15 per cent during accumulation?” he asked.

He also suggested the government may consider income tax rate changes.

“There has already been talk about bringing forward the changes that were initially due to take effect from 1 July 2022 and whether they will be brought forward to 1 July 2021, or even brought forward to apply to this financial year and whether those other changes that were due to take effect 1 July 2024 will also be brought forward,” he said.

What do you think of these ideas?

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27 comments

Suze

3 yrs ago

Self Funded Retirees could come out very poorly from these measures.

Happily retired early

3 yrs ago

That's for sure. Any changes should be grandfathered to protect those who have already retired and based their retirement decisions on existing rules. Everytime a government especially the Liberals fiddle with super they mess it up.

arbee

3 yrs ago

If you think the Liberals are bad with our retirement money, then you have a very short memory in regards to what labour proposed prior to the last election if they got into power.

Lescol

3 yrs ago

Provide a universal age pension & tax upon total income i.e. abolish means & asset testing. Make life simpler.

Paicey58

3 yrs ago

Why not an increase to 12% for gst ? That way everyone contributes and not just some.

SuziJ

3 yrs ago

Everyone contributes to the income from GST, anyway. I don't believe that raising the GST would serve any major purpose other than taxing into extinction those who rely on pensions with no savings, super or assets to rely on, of which I am one.

How would you compensate the pensioners for an increase in the GST in the first place? Increase their pensions? Of course, there'd have to be some increase. And how do you imagine the government paying for the increase?

Which scenario would you be happy with? Leave the GST as it is and our pensions will still be indexed twice a year, or increase the GST and our pensions would have to be increased to counteract the rise in GST, which would cost the economy so much more with little to no extra income to compensate for the increases.

I've not been able to work for over 22 years, and still have just under 28 months to go before I can apply for the Age Pension. I'm currently living on the single rate of the DSP, which pays the same as the single Age Pension. How do you expect me to save or put super into an account, if there's not much left over each fortnight after the bills and rent are paid? I don't drink alcohol, smoke, gamble or have many luxuries like eating out on a regular basis. Some of my clothes are over 25 years old, as I can't afford to purchase new clothes every season.

Please give everyone a break and don't ask for the GST to be raised.

Sceptic

3 yrs ago

GST is a states tax not federal. All the federal Government does is collect it then distribute it to the states, so it cannot do anything for pensions nor replace income tax.

PlanB

3 yrs ago

But I bet these maggots of politicians won't lower THEIR wages or alter THEIR pensions AND LERKS AND PERKS!

Sandy

3 yrs ago

Plan B, There's nothing more certain!!!

CountryCatkin

3 yrs ago

Oh dear! Poor Plan B. Temper your pathetic use of language. You show yourself in a certain light and I for one one am sick of the way we describe each other if they don't do or say as we wish. Maybe stand for pre-selection yourself and see what's entailed.

There are better ways of speaking out without denigrating others, whatever their calling.

PlanB

3 yrs ago

Catkin, I would have stood BUT you can not be an honest person and a politician as well -- except for the wonderful Ted Mack

Triss

3 yrs ago

Instead of arguing we need to fight back. Insist that the Future Fund, made with taxpayers surplus is handed back to us. Insist that politicians‘ corrupt pensions are handed back to us. Insist that if Australia is broke we cannot afford politicians and bureaucrats high salaries.

4b2

3 yrs ago

I think it is reasonable to increase tax both income and busines. I also suggest that overseas companies are taxed at a turnover rate to avoid paying any tax at all. It is also time to restrict companies claiming deficits year after year.

cupoftea

3 yrs ago

As soon as a politicion opens his mouth regarding our super not thers you can garrentee that it is not good

Arvo

3 yrs ago

So the grubs want to bring in the residential home in to the Assets Test so that pensioners pay for the blowout in the Budget.

But, you don't hear anything from the grubs about reducing the member's of parliament wages and reducing their retirement entitlements that they should by 80% over next 10 years.

The grubs talk about lower taxes to help business and look to achieving this by inflicting hardship on retirees , aged pensioners. and other welfare recipients instead of rising revenue by increasing GST to counter the loss in Income Revenue.

It would not be a surprise if the grubs decide to raid all of the superfunds by a ponzi loan scheme that makes no profit for retirees so that they can reduce the deficit on their watch reaching to a trillion dollars.

Times will be very hard but watch the grubs making it easy for themselves and preserving their personal wealth.

Sceptic

3 yrs ago

Perhaps you are the grub as the only mention of a residence is from you, Arvo.

Arvo

3 yrs ago

Sceptic..septic...can't see the forest for the trees.

McDaddy

3 yrs ago

No mention of Franking Credits.

PlanB

3 yrs ago

Yes you can BET that these maggot politicians will make the people pay and they will be on the easy street like they have always been and always will be -- they even can leave politics with a HUGE pension AND still work at a VERY WELL paid job --- ( the job they take may not be at our/or the country's best interest either) --- and they STILL have their pension AND lurks and perks -- but we can't earn any but a pittance

After all it is OUR taxes that are paying for all this debt

They are only interested in their own pockets and the big business mates

Time we all stood up to be counted -- after all, there are more of us than there are of them --

Farside

3 yrs ago

newsflash champ, your taxes are not paying for the debt. What are you standing up to be counted for?

Big Kev

3 yrs ago

Money for the big end of town and screw the poor and retired.

Instead of Scomo should be Scroogeo!

Sandy

3 yrs ago

Oh Sceptic, don't you read the papers or listen to the news? I suggest you do, because it has been mentioned several times that they are considering making the residential home part of the assets.

Arvo, I agree.

Golden Oldie

3 yrs ago

I've heard about the inclusion of the family home in the Asset Test, and also about bringing in a Land Tax on houses to replace Stamp Duty. I know the latter is related to the States, but think it unjust if you have already paid stamp duty on the house already purchased, and then also have to pay a yearly Land Tax. It's called double dipping.

Farside

3 yrs ago

Inclusion of home in the assets test is totally separate issue to phasing out stamp duty.

ACT is only territory or state that has committed to phasing out stamp duty and they are transitioning over a 20 year period. Grattan reports "In 2012 the ACT government began phasing out stamp duty over 20 years, and replacing it with higher municipal rates. As a result, annual general property rates on a family home on land worth $500,000 have increased from roughly $2200 a year in 2012 to $3000 just four years later. At the same time, the stamp duty on a home worth $500,000 has fallen by more than five times that amount: from $18,050 to $13,460. "

https://grattan.edu.au/news/following-the-act-land-tax-approach-boosts-growth-and-state-budgets/

JKB

3 yrs ago

I can remember when the government encouraged people to save. To buy a boat, caravan or holiday home. This would encourage people to work and save for a better life.These we could leave to our children etc, but not now.

Children were encouraged to have a school account to teach them to save.

If one should be unlucky enough to have to go into a nursing home, the government sells the property to pay for your room. Then they take 85% of one's pension to pay just for keep.

These were not used as assets then, but over the years all we are left is our home & possibly a car that are not considered assets.

Thank you for reading.

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Budget could see big changes to Age Pension, tax and super, says BT

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