Welcome Guest [Log In] [Register]


Reply
  • Pages:
  • 1
  • 12
About time the PPOR was included into the pension asset test
Topic Started: 18 Aug 2015, 11:38 AM (6,403 Views)
Fairgo
Unregistered

Call to count the family home for pensions and super

Read more: http://www.afr.com/news/policy/tax/call-to-count-the-family-home-for-pensions-and-super-20150817-gj0lzq
"REPLY WITH QUOTE" Go to top
 
Will
Unregistered

It is worth remembering that ultimately the pension sustainability problem is not a money problem but a productivity problem. In other words, pensioners need health care, housing (rent), food, transport etc. Since they wont be working to provide these for themselves, it needs to come from someone else's productivity. You can shuffle money around but the productivity wont change without other structural reforms.

The pension does already have some wealth means testing and is set to get more. And the pension does have quite a number of eligibility restrictions as well. I.E you have to now have 35 years continuous living in Australia over the age of 16 to get the full pension. And the pension is not particularly generous either.

Having said that, I don't have a problem with some means testing of the home. But not to the point where a medium home now starts cutting your pension.
"REPLY WITH QUOTE" Go to top
 
ThePauk
Member Avatar
Diamond Member
Will
19 Aug 2015, 10:07 PM
It is worth remembering that ultimately the pension sustainability problem is not a money problem but a productivity problem. In other words, pensioners need health care, housing (rent), food, transport etc. Since they wont be working to provide these for themselves, it needs to come from someone else's productivity. You can shuffle money around but the productivity wont change without other structural reforms.

The pension does already have some wealth means testing and is set to get more. And the pension does have quite a number of eligibility restrictions as well. I.E you have to now have 35 years continuous living in Australia over the age of 16 to get the full pension. And the pension is not particularly generous either.

Having said that, I don't have a problem with some means testing of the home. But not to the point where a medium home now starts cutting your pension.
Yep, only inc the amount over $750K of the VG amount into the asset test.
Profile "REPLY WITH QUOTE" Go to top
 
hoofarted
Member Avatar


Will
19 Aug 2015, 10:07 PM
But not to the point where a medium home now starts cutting your pension.
Nope... but anything above that should. And a second one should definately, even if the first is not more than the medium.
Edited by hoofarted, 20 Aug 2015, 01:38 PM.
Profile "REPLY WITH QUOTE" Go to top
 
zaph
Default APF Avatar


Will
19 Aug 2015, 10:07 PM
I.E you have to now have 35 years continuous living in Australia over the age of 16 to get the full pension.
Not according to centrelink. It's ten years. http://www.humanservices.gov.au/customer/services/centrelink/age-pension

Profile "REPLY WITH QUOTE" Go to top
 
ThePauk
Member Avatar
Diamond Member
zaph
22 Aug 2015, 09:15 AM
Zaph
Seems Will is confused about Pensions while living OS. Then 35 years makes a difference...
https://nationalseniors.com.au/sites/default/files/1409-NationalSeniorsAustralia-FactSheet-AgePensionPortability.pdf

"The full amount of age pension that a person is eligible for is payable while overseas for 26 weeks. However, once overseas for longer than 26 weeks, the amount of age pension payable to a person is dependent upon the person’s length of residency in Australia.
Residency is based upon how long a person has been a resident of Australia between the age of 16 and age pension age (currently 65 and moving to 67 in 2023) and the person does not have to be in paid employment within that period.
This length of residency is termed ‘Australian Working Life Residency’ (AWLR) and is set at 35 years. This means that if a person has a 35 year AWLR and spends longer than 26 weeks overseas, they will continue to receive the full amount of age pension that they are eligible for.
There is then a 2 year waiting period until the former resident’s age pension payment is portable. If the person leaves Australia before 2 years has passed, their payment is cancelled and they will have to return to Australia to reapply. If the person is residing within a country that has a Social Security Agreement with Australia then they are able to apply for the age pension in the country they are residing in."
Profile "REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


If they try and pull a stunt like this then we will all just need to get a little more creative.

Say you flogged your own joint which was worth $2m to your child. You sold it to them under a vendor finance deal where the consideration was say $200k but with massive IO repayments. They moved in and classified it as their PPR. Then they moved out and put it on the rental market and tenants then moved in (could be you) and paid the market rental for the place. Because you had saddled them with vicious debt terms they would be negatively geared to the max. Yes you would be up for the repayments in the asset test but overall you will still be ahead of where you could have been. You could also just sell it far lower with no repayments and have a very late pay out on the loan and only cop the paltry deeming rate, either way you can still minimise your liability.
Profile "REPLY WITH QUOTE" Go to top
 
Thanks
Unregistered

Bardon
22 Aug 2015, 11:09 AM
If they try and pull a stunt like this then we will all just need to get a little more creative.

Say you flogged your own joint which was worth $2m to your child. You sold it to them under a vendor finance deal where the consideration was say $200k but with massive IO repayments. They moved in and classified it as their PPR. Then they moved out and put it on the rental market and tenants then moved in (could be you) and paid the market rental for the place. Because you had saddled them with vicious debt terms they would be negatively geared to the max. Yes you would be up for the repayments in the asset test but overall you will still be ahead of where you could have been. You could also just sell it far lower with no repayments and have a very late pay out on the loan and only cop the paltry deeming rate, either way you can still minimise your liability.
Thanks, as with any changes, the ATO and Centrelink will have to prepare for such rorting of the system and while you 'think' you may be better off, I remain unconvinced by your example.
"REPLY WITH QUOTE" Go to top
 
ThePauk
Member Avatar
Diamond Member
According to Mark, Labor will be advantaged by the agequake, so I would fully expect the PPOR to be inc into the pension asset test sooner, rather than later...

Demographic wave of older voters can rejuvenate Labor
http://www.theaustralian.com.au/news/inquirer/demographic-wave-of-oldervoters-can-rejuvenate-labor/story-e6frg6z6-1227493616410
Profile "REPLY WITH QUOTE" Go to top
 
Bardon
Default APF Avatar


Thanks
22 Aug 2015, 11:16 AM
Thanks, as with any changes, the ATO and Centrelink will have to prepare for such rorting of the system and while you 'think' you may be better off, I remain unconvinced by your example.
Just putting it out there over a coffee, its not a rort either and necessity is the mother of invention.
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
ZetaBoards - Free Forum Hosting
Enjoy forums? Start your own community for free.
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply
  • Pages:
  • 1
  • 12



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy