Seniors’ groups warn government of retiree backlash if these benefits are scrapped

According to John Daley, chief executive of the Grattan Institute, the “taxed-nots” – older Australians who pay far less than
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Seniors' groups are warning the government of retiree backlash if tax breaks and rebates for over-65s are scraped.

According to John Daley, chief executive of the Grattan Institute, the “taxed-nots” – older Australians who pay far less than younger taxpayer on identical incomes – is unfair and unjustified. “So obviously seniors tend to have lower incomes and we’ve got a progressive tax system that says you pay less tax if you have got a lower income, but if you have the same income as a younger household, you still pay less tax,” he said as quoted by SBS. Seniors don’t pay tax until they earn more than $30,000 a year and for couples in their 40s, it’s $20,000.

That means the income level before elderly couples pay the Medicare levy is more than $10,000 higher than younger Australians. On top of that, it is reported that the private health insurance rebate is also far more generous once you hit 65. But seniors’ groups are warning the government that if tax breaks and rebates for over-65s are scraped, they could face major voter backlash.

A report by the Grattan Institute says back in the 1990s, also most a third of seniors paid tax. Now, John Daley says, it’s fewer than two out of ten.

“Older households today are paying less tax in real terms than older households 20 years ago, despite the fact they’re living so much longer and they’re taking much, much more out of the government tin. So the average older household today is costing Australian governments $32,000 a year, and just ten years ago it was $22,000 a year. That big jump is something budgets cannot sustain.”

The report estimates a billion dollars a year could be saved if the Medicare levy thresholds and private health insurance rebates enjoyed by the elderly are reduced and aligned with what younger Australians are paying. The report also suggested that limiting tax breaks to seniors on the full aged pension can help save the government money.

Do it and face a retiree backlash

But the report was not released without strong feedback from the seniors’ groups. Council Of The Ageing chief executive Ian Yates warns it would spark a voter backlash. “Look, Australia’s full aged pension is one of the tightest, targeted, most modest in any similar country in the OECD. Living on the aged pension is difficult so the fact that we are talking about people who have a little bit more than that does not mean that they are living in luxury: it means that they are getting by, and if you were to take a $1000 or $2000 a year from them that would have a significant impact on their life.”

He says most retirees are living modest lives and have already suffered from recent government belt-tightening.

“And these tax breaks are not going to save the kind of money that we could look at if we were to close quite a few other tax loopholes that substantially benefit people on hundreds of thousands of dollars a year. I think that there would be a significant reaction if the Government was to adopt the recommendations of the Grattan Institute.”

Does he have a point? How does this make you feel and how will you be affected if this goes through?

  1. I would strongly suggest that John Daley leave his precious surrounds at the Grattan Institute and join the real world. Most seniors have to continually pull their belts in, while these overpaid bureaucrats live in a fantasy world and make statements regarding things that they have absolutely no knowledge about.

  2. For many years pensioners have been targeted by Governments. Put more into Super, pay off a house sooner, work longer if possible. For years my parents worked two jobs each to put all us kids through school, saved to have a home and if possible a car, day trips on a week-end instead of holidays, all these things were to make our lives a bit easier than theirs. They gave up the quality of life we now have/had for a short time, but now must give up for our kids. Is this the joys of retirement my parents never had because Governments said no you don’t, and now we are being told the same thing. Someone put in place a system where the growing older generation know exactly where they stand, not get to that place and get dumped on again. If Governments know the problem is there, and always has been, take the time for long term planning and not worry if the budget is in the red or black.

  3. Guy Flavell  

    Definitely an interesting and thought provoking article. As a pensioner I understand the concerns of retirees that their income should not be reduced by taxation.
    However, there really does appear to be some anomalies to be considered, ie:

    My 31 yo, non-home owning single son earns exactly $58,000 pa and pays $10,397 pa
    in taxation. But, a home owning retiree earning $58,000 pa pays NO tax whatsoever !!
    Why should my hardworking son be supporting the comfortable lifestyle of home-
    owning retirees who are making absolutely no contributions to our (shambolic) economy?

    • Peter Hancock  

      ??? didn’t they pay taxes during there working life? No contribution GST is a tax. And have you tried caring for some one with a terminal illness on that amount.

      • Guy Flavell  

        Peter, Yes they did pay taxes over their working lives but why does reaching the magical age of 65 entitle them to immediately cease making any contributions …
        especially if their income is $58 k (plus almost all of the Govt. pensioner benefits)?
        And Mate, GST is paid by everyone !!!
        As to caring for someone with a terminal illness … that same $58k pa retiree would
        find it far easier to address (financially) this awful situation than a non-home owning basic pensioner couple. I sincerely pray though that this is not the situation in your own case.

    • Kevin Hobbs  

      How much have they paid in tax in there working live..? I have payed 3 times that smount every year for the last 20 years.Hes driving on roads and using utilites that have been paid for by others before him ,harden up man

      • Guy Flavell  

        Sorry Kevin, not right !!! You stated “He’s driving on roads and using utilities that have been paid for by others before him”.
        No Mate, my son’s the one who’s paid for them over the past ten years with his taxation payments … NOT the non-contributing retiree who’s now paying NO tax at all !!!
        I agree with you that the same retiree has most definitely paid their share with their
        taxes during their working lives. BUT, does the golden age of 65 magically entitle
        them to cease making any contributions ? Sure, leave the $22 k pa old age pensioners alone … but not the more than comfortable retirees, who I remind you,
        still have most of the Government pensioner benefits too … as well as no tax liabilities.

  4. Phillip Worrall  

    Definitely a concerted move by Gov & media to condition people into accepting attacks on Retirees/ pensioners.Truth carefully avoided,Most pensioners can not afford anything other than a basic lifestyle,SF retirees,savings have withered away under a decade of low interest rate’s.Private health rates? present rate”s are outright extortion!”.
    Cost’s, 20% of a couples pension.$500 excess fee paid yearly.Rarely is full cover provided,usually thousands of dollars are payable in excess Doctors/ Hospital Fee’s.The Gov penchant for pork barrelling to win elections,usually involving handouts to wealthy & middle income voters.coupled with negligence in creating a dedicated pension fund, These are the real problems.But of course attacking low income retiree’s the easy solution.Also a clear indication of the caliber of our Gov

    • Guy Flavell  

      But Phillip, why do pensioners need to pay for health insurance when they have a
      TOTALLY FREE Government health service ? Read the list of benefits for pensioners
      (1-16) down the page a bit to qualify this. Oh, and I’d forgotten FREE hearing aids on
      my list.

  5. patricia dick  

    could someone who knows how start a petition warning the government to start respecting aged pensioners?
    We are all living so carefully, volunteering, babysitting etc etc. We are not worthless and we need much better treatment. If we could show the powers that be how many of us won’t vote for them perhaps it will show them we mean business.

  6. Guy Flavell  

    Firstly, I must state my absolute respect for the hardworking and frugal (perhaps lucky)
    self-funded retirees who carefully planned and diligently saved for a comfortable
    retirement. They have most definitely earned their stripes and should be extremely
    proud not to be existing on the Government’s welfare system.
    However, it seems to me that some of these people (I repeat, only some) appear to be
    the loudest ‘bleaters’ on these forums about how little support they receive from the
    Government. Heavens, how much do these whingers want ? Up to $58k pa TOTALLY
    TAX FREE for a home-owning single retiree and still with most of the pensioner benefits
    as well. Could they honestly be described as ‘parasites’ ? Sadly, I think the answer to
    this is YES !!! All you seem to hear from these people is “I’ve paid my taxes all my
    working life and the Government does nothing but rip me off”… blaah, blaah, blaah.

    Now, how about a few pertinent facts as to just how far our Governments actually go
    to ensure old age pensioners’ lives are quite comfortable and secure, ie:

    1) Single pensioners are paid $22,750 pa ($875 p.f.) … tax free.
    2) They have a completely FREE medical system … apart from $5.20 per medical script.
    3) They pay only minimal amounts for home help, meals on wheels, local transport,
    garden maintenance, etc. $6.35 for a healthy pensioner meal is good value.
    4) They are given free alarm systems within their homes in case of emergencies.
    5) They pay nothing for the use of ambulances.
    6) They receive free occupational therapy … including free mobility aids (scooters, etc).
    7) They receive FREE CPap breathing machines if they suffer from sleep apnoea, plus
    an annual allowance of $147 towards the energy cost of the CPAP machine.
    8) Totally free medical procedures with a wait of only 6-7 months for non-emergency.
    Emergency medical treatment is done immediately. NO unnecessary and costly
    health insurance cover is required.
    9) They receive $28 per visit comprehensive dental treatment, incl. FREE dentures.
    10) They receive half-price motor registration fees.
    11) They receive free annual optical tests and free glasses.
    12) Many enjoy $100 pw comfortable public housing rentals if they are not lucky
    enough to own their homes. Other renters receive healthy rental subsidies.
    13) Two FREE return train trips each year within state borders.
    14) Pensioner discounts off their energy costs.
    15) Six month payable, interest free loans from Centrelink in case of hardship or
    emergencies. Organised with a simple phone call.
    16) Discounted rates bills for home-owning pensioners.
    17) And I’m sure there are other benefits I’ve forgotten or are unaware of.

    So everyone, stop spouting this inane crap about the Government not doing much to
    help you. We are just so lucky to live in a country that looks after our pensioners/retirees so well. If you’re still willing to ignore these facts … then, get a life !!

    • Guy Flavell  

      Oh, and I forgot … FREE hearing aids replaced every five years at no cost.

  7. Pat Kelly  

    I think it is time to stop giving airspace to this Gratten mob of theorists and seat warmers.None of these clowns know anything of real life,or the poor buggers forced to cope with it.
    Like their proposed tax on suger in soft drinks,they only know how to lighten your wallet,not your body.

    • Guy Flavell  

      Pat, those disparaging and rather dumb comments just simply make you look foolish and uneducated.

      Look the Grattan Institute up on Wikipedia and TRY to comprehend the extent of their
      invaluable advice and assistance given to both sides of Parliaments (federal and state).
      Please also note that their Board and Working Committees are made up of some of the most brilliant minds in this Country … not “clowns” as you mindlessly indicated.

      No doubt you believe this organisation to be a ‘right-wing /capitalist’ group seeking to
      rip-off all you poor little “buggers”. Well, wrong again my friend as the Institute was the
      brainchild of the Vic Labor premier, Steve Bracks, in 2008. It’s funded by both sides of
      the political persuasions plus a great deal of the country’s largest service industries and businesses.

      Have a good read China, you might just learn something positive about this country(?).

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