Living overseas on the Pension

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#26
That madcampaigner seems to have an issue with people that do not own homes paying the pensions of people that own these $2 million dollar homes. Since the boomers are the only ones old enough to be getting the old age pension of course they are going to be the focus.

This is not about a boomer in a 350k house retiring with little super. This is about those asset millionaires.
Whatever. Gonna be hard legislating for intergenerational offended cos for every winner in toorak theres many losers in some town the mining boom left behind

Do you pay out for those poor people on the same principle?
 

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Hawk Dork

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#27
My neighbour moved to Thailand and another friend moved to Bali and a relative just does the English winter in India for the last 20 years other relatives just did 6 months in Croatia with a view to buy or build a place.
When I was in Vietnam early in the year, there was a retired couple who did the Australian winter in Vietnam 3 months a year.

I would go to live in Asia or the Med but my wife doesnt want too leave Australia so it will only be short term trips maybe a few years but with a place here to come back too
 

Sainteric

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#30
Interesting post.
I just checked and it is confusing, so many rules and conditions but I think you still get the pension.

I actually thought that the government was going to change the rules last year. Maybe it didn't get through the Senate.

https://www.humanservices.gov.au/individuals/subjects/australians-overseas
https://www.dss.gov.au/about-the-de...lity-of-australian-income-support-payments#03
Progressively both the alp and libs have made it harder to get the pension and retire OS starting with iirc Greeks retiring back to Greece and then a myriad of others as it stands now if you have worked in Australia for 30 years you are good to go, but as that number gets down the pension is limited on how many year you retire OS to a point where its cut.
 

Simon_Nesbit

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#31
It's not just young people - and it's not just the value of the pension. It's that the system (perversely) provides an incentive for people to horde land. If a pensioner that has a $1.5m property sells up and buys a $500k apartment and pockets the rest suddenly loses their entire pension despite having no change whatsoever to their asset position. So a lot of pensioners just won't sell up and sit on the land. It distorts the supply side of the market.
What I would like to see happen, is that the property is included in the Assets test, BUT - the government is able to place a mortgage against the property, with the balance of payment to the standard "Age Pension" instead being treated as a payment in advance - either interest free, adjusted for inflation, or very low interest (lower than banks).

The loan amount is then paid out on transition of the property - either from the estate, or from sale proceeds.

Even at $900pf, (ie, 100% excluded from pension due to assets) it would take 10 years to reach $250k, and almost 30 years to hit the $1 million.

Government reduces it's outgoings for Centrelink, increases it's asset base, and gets to introduce an informal "inheritance tax".
Old people get to stay in their homes, and don't have to live on dog food.
 

Hawk Dork

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#32
What I would like to see happen, is that the property is included in the Assets test, BUT - the government is able to place a mortgage against the property, with the balance of payment to the standard "Age Pension" instead being treated as a payment in advance - either interest free, adjusted for inflation, or very low interest (lower than banks).

The loan amount is then paid out on transition of the property - either from the estate, or from sale proceeds.

Even at $900pf, (ie, 100% excluded from pension due to assets) it would take 10 years to reach $250k, and almost 30 years to hit the $1 million.

Government reduces it's outgoings for Centrelink, increases it's asset base, and gets to introduce an informal "inheritance tax".
Old people get to stay in their homes, and don't have to live on dog food.
Then its just an inheritance tax on the poor only

Government spends as much money subsidising the super system as what they do paying the pension and most of the benefits go to the richest people
 

madmug

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#34
How many poor people own multi million dollar homes?
Absolute poor are rare in Australia. The relatively poor are quite numerous. Poverty is defined in Australia as individuals earning <50% of average wages. That would be hard to live on in this country.

Some have lived in a house for many decades. The house value may have boomed. Their income has probably shrunk. So they really are struggling. Its easy to say they should down size or move. But they would find it hard to move from their home of many decades & away from their social support networks.
 

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Rob

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#37
Then its just an inheritance tax on the poor only

Government spends as much money subsidising the super system as what they do paying the pension and most of the benefits go to the richest people
Hang on, there's a difference between subsidising and simply having lower tax rates. Other than the super co-contribution (which in theory only goes to those on low incomes), the government don't subsidise superannuation. They just impose less tax on it.

Not that I can't find plenty of things to improve about the way superannuation is taxed, but it's not correct to say that it spends a lot of money subsidising it.
 

Hawk Dork

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#38
Hang on, there's a difference between subsidising and simply having lower tax rates. Other than the super co-contribution (which in theory only goes to those on low incomes), the government don't subsidise superannuation. They just impose less tax on it.

Not that I can't find plenty of things to improve about the way superannuation is taxed, but it's not correct to say that it spends a lot of money subsidising it.
http://www.tai.org.au/node/1884
 

Simon_Nesbit

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#40
Then its just an inheritance tax on the poor only

Government spends as much money subsidising the super system as what they do paying the pension and most of the benefits go to the richest people
How is it an inheritance tax on poor people when you are receiving an asset likely valued over 1 Million? I would presume more "rich" people have million dollar, unencumbered homes than "poor" people, but regardless it something I will never see.

My dad and probably lots of other pensioners who own their own houses in a nice suburb in Melbourne or Sydney that they paid about 10 g for over 50 years ago
Congratulations to your dad for making a wise investment. You obviously have a personal interest in my comment, but if you can exclude your own potential loss, can you see the benefit to the economy and community as a whole?

Absolute poor are rare in Australia. The relatively poor are quite numerous. Poverty is defined in Australia as individuals earning <50% of average wages. That would be hard to live on in this country.

Some have lived in a house for many decades. The house value may have boomed. Their income has probably shrunk. So they really are struggling. Its easy to say they should down size or move. But they would find it hard to move from their home of many decades & away from their social support networks.
I agree, and it's why I like this idea so much. They can continue to live there for the remainder of their days without any issue or concern. It is only once they sell and move, or pass away and the estate processes the property that the debt is repaid.
 
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Elroo

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#41
In addition, those pensioners who retire overseas will potentially be hit with CGT on their principle place of residence in Australia if they sell the property, or if they die whilst retired overseas;

https://www.afr.com/personal-financ...anges-by-canberra-and-beijing-20181003-h166nt

Expats brace for tax changes by Canberra and Beijing

The federal government is facing growing calls to scrap or overhaul controversial changes to capital gains tax (CGT) exemptions for Australian expats, but tax watchers say now is the time to plan ahead and avoid getting slugged.

Set to affect about 100,000 Australians living and working overseas, the changes would deny CGT exemptions for homes sold while the owner was outside Australia, a retrospective slug as far back as September 1985 for some owners.

The existing laws would apply for any property sold before June 30, 2019, provided it was owned before budget night on May 9, 2017.

Some experts have labelled the moves a new death tax for expats who die overseas and the beneficiaries of their will.

HLB Mann Judd Sydney tax partner Peter Bembrick says Australians overseas should take careful steps to avoid bill shock from the ATO.


"It may sound like a dream come true — you've been offered a fantastic job and the opportunity to live in, say, London or New York or Singapore for a few years," he explains.

"The changes mean that anyone who moves overseas and rents out their family home, and then decides to sell the home back in Australia while they stay on overseas, will need to pay CGT on the proceeds of the sale. While these changes haven't yet been passed into law, they have the support of both parties and should be considered as inevitable."

Bembrick says the laws are a significant change from the previous "six-year absence" rule, which meant that if the home was sold within six years of moving overseas, it would be exempt from CGT.

The new rules could apply from July 1, 2019, but Labor has asked the government to reconsider in light of potentially unintended consequences.
https://www.afr.com/news/cgt-change...ath-tax-for-australian-expats-20181004-h1680d

"If a person is living in Australia and have a residence, retires and decides to live overseas to experience a different life but then dies while they're away, we're passing on a death tax to their beneficiaries," he told The Australian Financial Review.
 

Hawk Dork

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#42
How is it an inheritance tax on poor people when you are receiving an asset likely valued over 1 Million? I would presume more "rich" people have million dollar, unencumbered homes than "poor" people, but regardless it something I will never see.
Usually the only asset the poor will ever have to pass on is the family home,the only chance for a generation to get ahead.
My relative owns heaps of houses, factories, hotels and commercial property none of it is his name,its all in family trusts.
My relative's wife has dementia he is living on the family farm, he has millions in tied up assets, he was told by his accountant that he would qualify for assistance to put his wife into a home, because of the way the money is structured.
Poor people dont have access to this level of avoidance/aversion



Congratulations to your dad for making a wise investment. You obviously have a personal interest in my comment, but if you can exclude your own potential loss, can you see the benefit to the economy and community as a whole?
Had nothing to do with wisdom just luck,its the family home.
Doesnt benefit my retirement plans, it would just push me and my siblings onto the aged pension,so no benefit to the community either.

I agree, and it's why I like this idea so much. They can continue to live there for the remainder of their days without any issue or concern. It is only once they sell and move, or pass away and the estate processes the property that the debt is repaid.
All for death duties that tax everything if it had a reasonable floor.
Almost impossible to re introduce now.
Taxing super withdrawals was the original plan in and out it would hurt the poor more on the way in and the rich more on the way out,Howard got rid of that.

Theres a whole generation of people, who had no opportunity to use the tax system to avoid tax and create a tax free nest egg to pass onto their family, they put their after tax dollars into paying off their mortgage and gritting their teeth to survive on the pension.

Dont give tax cuts to multi nationals who pay no tax and actually get them to pay and it will sort itself out
Pensions really are just economic stimulus anyhow what gets paid gets churned straight back in and creates jobs and taxes
 
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madmug

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#43
How is it an inheritance tax on poor people when you are receiving an asset likely valued over 1 Million? I would presume more "rich" people have million dollar, unencumbered homes than "poor" people, but regardless it something I will never see.



Congratulations to your dad for making a wise investment. You obviously have a personal interest in my comment, but if you can exclude your own potential loss, can you see the benefit to the economy and community as a whole?



I agree, and it's why I like this idea so much. They can continue to live there for the remainder of their days without any issue or concern. It is only once they sell and move, or pass away and the estate processes the property that the debt is repaid.
I think some sort of reverse mortgage for pensions paid where the home value exceed say $1mil or at least on the capital gain potential of a property. Other assets are covered in the current legislation. I think its conceptually fair. The self interested will bitch about it but 'middle class welfare' is out of control under this Government.

The ALP policy to attack the rampant problem/expense we have with negative gearing for older homes is a good idea. It'll boost the investment in & building of new homes.
 

Hawk Dork

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#44
Good luck taxing the family home

Looks like the housing boom is going to eat pensioners super up when they retire then they go on the pension.
Rapid rise in retirees with mortgage debt

The number of Australian homeowners over the age of 65 still carrying mortgage debt has trebled since 2002, raising concerns the nation's retirement savings could be absorbed into the housing boom.
In 2002 only 4 per cent of homeowners aged over 65 carried mortgage debt, figures from the Australian Bureau of Statistics show. By 2015, the latest figure available, that had grown to 12 per cent.
it was a "worrying trend" and set to continue because the percentage of homeowners in their 50s and early 60s with mortgage debt had also increased.
The number of 55-64 year-old homeowners with mortgage debt had more than doubled, from 23 per cent in 2002 to 47 per cent in 2015.
The percentage of homeowners aged 45-54 with mortgage debt climbed from 55 per cent to 77 per cent over the same time frame.
https://www.theage.com.au/money/bor...irees-with-mortgage-debt-20181018-p50aea.html

Sell up and settle your debts and move somewhere cheaper maybe dump some more in your super will be an option if theres buyers
 

Simon_Nesbit

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#45
It makes sense though. The average age of first home buyers is rapidly increasing, and with longer repayment periods, it's taking longer to clear the debt, without selling first.

There is a significant concentration of property ownership occuring. The average #properties/property owner is also rising dangerously IMO.

The only real winners are those lending out the money, or those with enough behind them to invest beyond their own home.

I draw the analogy to the "Unskilled Generation". Whole areas, even suburbs where Mum and Dad (if they're lucky) stopped school at Grade 10, The kids grow up not knowing anything else - it becomes normal, and the concept of higher education becomes completely foreign. The same concept applies to Centrelink benefits, and soon, housing.
 

Hawk Dork

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#47

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#48
Progressively both the alp and libs have made it harder to get the pension and retire OS starting with iirc Greeks retiring back to Greece and then a myriad of others as it stands now if you have worked in Australia for 30 years you are good to go, but as that number gets down the pension is limited on how many year you retire OS to a point where its cut.
My father-in-law, has lived and worked here for over 40 years. He's eligible for a pension now and receives one. As soon as he goes to NZ for a visit, they stop paying him until he gets back. (pretty sure he's not an Aussie citizen). Drives me mad with his bitching and moaning about it.
 

Herne Hill Hammer

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#49
Absolute poor are rare in Australia. The relatively poor are quite numerous. Poverty is defined in Australia as individuals earning <50% of average wages. That would be hard to live on in this country.

Some have lived in a house for many decades. The house value may have boomed. Their income has probably shrunk. So they really are struggling. Its easy to say they should down size or move. But they would find it hard to move from their home of many decades & away from their social support networks.
Correct. Plenty of shit houses on blocks of land where the value is all in the land.
 

Herne Hill Hammer

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#50
What I would like to see happen, is that the property is included in the Assets test, BUT - the government is able to place a mortgage against the property, with the balance of payment to the standard "Age Pension" instead being treated as a payment in advance - either interest free, adjusted for inflation, or very low interest (lower than banks).

The loan amount is then paid out on transition of the property - either from the estate, or from sale proceeds.

Even at $900pf, (ie, 100% excluded from pension due to assets) it would take 10 years to reach $250k, and almost 30 years to hit the $1 million.

Government reduces it's outgoings for Centrelink, increases it's asset base, and gets to introduce an informal "inheritance tax".
Old people get to stay in their homes, and don't have to live on dog food.
So people that retire without ever owning a home get everything for nothing then? If that were the case, I'd never bother to buy one, I'd just rent and spend. When I retire, I'd just claim a pension and rent assistance.

In an ideal world, the governments want the elderly to sell up their homes and downsize, a couple of problems that spring straight to mind is the prohibitive cost of actually doing this, if the person / s have ongoing medical issues and networks that help care for them, they have to move away from these services.

It's a tough fix. I wouldn't begin to know how to balance it out. Either one side is going to get smashed or not.
 
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