Government advised to tax age pension and completely phase it out… 602



View Profile

The pension is something we went our entire lives knowing we would receive. We planned our entire finances around it with the peace of mind that although we weren’t so well off as a generation, we would have enough security to get by on once we retired. However younger generations may never know that luxury and in fact, what little we actually receive from the government we may have to pay back a portion of.

Recommendations made by economics and research firm Rice Warner suggest that the government need to dramatically re-asses and re-structure the aged pension in Australia. So much so, that they actually recommend that it is phased out over time. This was outlined in their response to the government paper, Re: Think Tax.

According to SMSF Adviser Online, the firm suggested that the “age pension should be phased out”.

“Retirees should first spend their own assets and be eligible for a full Age Pension when they fall below a threshold,” Rice Warner said.

While the firm argued it would be appropriate for a couple to keep a family home up to the value of $1.5 million and all other assets, including superannuation of no more than $500,000, and to continue to receive the age pension, individuals with assets above this should not be able receive it.

The submission said that under the proposal, if people have a valuable home they have the choice of downsizing or requesting a government pension that is paid as a loan with the home as security.

“At present, people won’t downsize as the cash generated impacts on their age pension,” the submission said.


In addition to this, Rice Warner recommended a reduction in the taxation of accumulated superannuation earnings from 15% to 12% and they also recommended that pension accounts be taxed at 12%.

“We consider it sensible to have a single rate of tax across accumulation benefits and superannuation pensions,” Rice Warner said.

Currently, the pension is tax free and already puts Australian pensioners below the breadline as recommended by the OECD. If the pension was to be taxed at a rate of 12%, the highest annual income from the pension would be reduced to just $20,201. That’s inclusive of medical bills, food, accommodation, entertainment, transport and everything else one needs simply to survive.

The reality is that our generation should be safeguarded from this. We have no other choice but to live off the government due to the way our lives have been planned. But for our children, it’s a very different story. It’s now when they should be investing, saving and squirrelling away every dollar they can to make sure they aren’t hit by what the government could decide to do in the future.

Tell us, do you think it’s wrong to tax the pension? Do you think the pension will always be necessary or will our generation be the last to rely on it? Share your thoughts in the comments below… 


Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. He:s got to be kidding

    3 REPLY
    • More muck raking from sooky looser labor o they can’t even write policy

      1 REPLY
      • Bruce, there’s no muck-raking going on here: it is a report about an article online which appears on the website SMSF Online (Self Managed Super Funds). That website is reporting about a submission made to the Tax Discussion Paper by an economics and research firm called Rice Warner. That chain of reporting has nothing whatsoever to do with the Labor Party – the report simply states what is in a particular submission by Rice Warner to the Government via the Tax Discussion Paper. You can access the original online reports by clicking on the hyperlinks in the report above.

    • if I read that correctly this not come from The ALP, it came from people who are paid by this Abbott Government to advise them

  2. We, as pensioners have already paid tax on our wages all the years we have worked!!

    23 REPLY
    • I am old , I am sick, and I tired of fighting this Government just for the right to survive and perhaps this is their plan to wear us all out and hopefully we will drop dead. I am a lot sicker now than I was before they came into Government.

    • Next Tony will want to solve the problem by euthanasing everyone over the age of 60

      1 REPLY
      • That’s his idea tax the pension raise the age so no one can afford to buy food ,clothes, heating etc so no need for a pension

    • we are all sick of it.. it has gone on ever since they came into Government and they got elected by telling lies. We now all older than when this started and our hair has gone a lot greyer..the sooner they are gone the better

    • I’m 39, and I too have paid tax and will continue to pay tax until I’m 70. Or will it be 80 by the time I get to retire? Who knows, but I do know that whenever retirement is finally granted to my old bones, I’ll have paid for my pension no matter how much super I have accrued. Sure, asset test me, no worries, but what if there’s another stock market crash when I’m 69 and my super disappears into an already rich persons pocket?
      Thanks for reading 🙂

      1 REPLY
      • what do you think in 2006 and we all got burnt

    • I understand it will be harder for your generation Rob, many of us have children your age and older, but we started work at 14 years and 9 months old, we have worked longer than generation after us have worked, we paid our pensions without complaint, we also paid for our children with no Government handouts , our parents never had to through what we are going through with this Government. And many have little Super because it never started to be compulsory till the 1990’s

    • Whilst we were working, we were paying for the age pensioners at that time. The people who are now working are paying income tax to pay for our pensions!

      1 REPLY
      • Hi Jean the problem is there is not enough people paying taxes now to pay/support the pension. They say only 1/3 of the population is paying taxes not enough to support a future pension. And yes I have worked for over 30 years and paid tax all the time, never accessed the dole but would like to access the pension when I reach my time. Yes I have some super but it was never compulsory from the commencement of my work life so it will not be enough to support me entirely.

    • As with all investments (which is exactly what super is), there is an inherent risk factor that account holders have little to no control over. Even self managed funds are at the mercy of global markets. We all saw what happened in 2008.. People lost everything.
      As long as there’s a safety net for WHEN markets crash again, I’m quite happy with retiring on my super.
      As to raising children with no handouts – compare the wage increase since 1975 with that of the cost of living and you’ll see that in real terms wages for the average Joe have actually decreased.

      1 REPLY
      • Rob, thank you for yiour pertinent and insightful comments – which make a lot more sense than some of the “political” rubbish that has been posted. You are right, we didn’t have compulsory Super until the 90’s. Those of us who had “non-contributory super” lost it if we changed positions, it was not portable. Although Equal Pay came in in 1974 (yeah right), women continue to earn less than men. Therefore, our Super grew much more slowly. For the last 10 years of my employment, I made contributions myself, but it doesn’t go far. Like so many others in this Group, I raised my daughter without any assistance from the Government (I was a young widow). At times I paid very high taxes and didn’t resent that as it was going to assist those who needed it. The only time (before Age Pension) that I received Government assistance was when I took over custody of my Granddaughter – and am grateful for it. Now it is becoming more and more difficult to balance the budget. I hope you are never faced with this.

    • They’re not talking about in our lifetime. This is quite a way into the future, and planning will have to be very long term.

    • Exactly Rob Crawford…it is not only current pensioners who are being shafted…pensioners of the future are also at risk if Mr Abbott’s policies are passed through the parliament…thank you for your foresight and support

    • you need to tell your own generation Rob, we are are not so old and senile that we need to be told what to do by someone who is younger than our children, and by the way Rob, my daughter voted Liberal in the last election, she is 2 years older than you, she will be NOT be voting Liberal in the next

    • Oh please don’t take my comments personally. I wasn’t having a go at any ones state of dementia lol. I was simply trying to explain contemporaries.
      I could go on about globalisation and privatisation and how both of those economic changes made already wealthy people even wealthier at the expense of the globally over populated majority but that would be heading off on a tangent. So I’ll stay on topic.. 😀

    • You can all thank Rudd, Gillard and Swan, they emptied the bank account and borrowed and borrowed and borroed.

    • Rob hopefully you have parents who will leave their home to you and your right about if there is a crash, you and our children will be well and truly screwed and it has happened before..good luck

    • Bill Sunny Ogle, I really think you should do some research. Costello spent the mining boom giving Super Concessions, Capital gains tax that benefit primarily the wealthy (do you realise there are people with hundreds of properties and with Neg. gearing pay NO TAX at all). Super Conc. and Cap. Gains alone cost $170 billion and he spent another $140 billion that could have been saved. The time for Austerity measures comes with a rise in the Surplus. Swan had the GFC and kept hundreds of thousands of workers occupied with a stimulus. hockey is trying this now with the sm. business policy. I’m afraid there will never be a surplus under his tenure and unemployment rampant

      1 REPLY
    • Thanks Libbi, Mucho gracias for your understanding. We are living in volatile times and strange days indeed. 🙂

    • And by the way Leanna, I appreciate any wisdom my elders have for me, but to lable my reasoning as condescension beggars belief. If you have any advice I’m more than willing to listen 🙂

    • pay no attention to me Rob I am like everyone worn out and tired of fighting for our rights, I have been out there marching as well it just seems to never end..I wish all the best love, if we get this fight finally finished, we will fight for you and our kids

    • Lots of love Leanna 🙂 I hope for all of our sakes that things we as the 99% cannot change, change very soon..

  3. What about those of us that have nothing what do we do when we get to 70???

    3 REPLY
    • We are but numbers Judith…the fact that we care for kids and adults with special needs…is irrelevant….the fact that we can’t work due to sickness chronic…..or beyond their comprehension.we need another Menzies…..where are you..!!!!!

    • I have no 54 and cant get a job for health reasons.worked since I was thinking I might be out in the street when im money to go to a home

  4. Please note people it is a recommendation, not a law. Australia has a problem money wise, and then it has the problem of damned if they do and damned if they don’t on all issues. just saying.

    3 REPLY
    • If Abbott has his way it will become law. if you do not believe this you are living in dream land

    • Wonder where the problem of the money debts came from? One guess !! It starts with L and ends with R.

    • You’re right Anne. I think we have a lot of alarmists here who haven’t taken time to read the entire story.

  5. why not do what they use to do with used horses shoot them and make glue is that what abbott wants your no good to us now even though you did your fair share for Aussie But when he retires he will get a fat pension

    6 REPLY
    • Don’t blame Abbott, this is some crackpot economics and research firm Rice Warner, whoever they are, and it’s just another Liberal smear campaign that the left wing media likes to pick up on to terrorise pensioners and the like.
      People power works, and rather than sit back and whinge about it, pensioners should be furiously writing letters and sending emails to this disgraceful firm and abuse the crapola out of them.

    • Isn’t the govt mandate to just make old people comfortable….don’t treat them too expensive…look at nursing homes.

    • Lillyn I volunteer in a nursing home in NSW and was shocked to learn how much it costs to buy into AND the additional costs to live there! My husband and I won’t both be able to live in one when the time comes!

  6. So does that mean these FUCKWIT politicians forfeit their million dollar pensions.HA that would be the day.

  7. Out of touch and proven liar as he might be I don’t think even Tony “NO Cuts” Abbott would try that. Not while we’re all still voting. Sounds a bit sus.

  8. Time for this cruel stupid crowd to go. And I don’t like Labor at the moment either. As for the Greens I used to vote for them. Now they are just a joke. First time in my life I’ve had no one I could vote for and I’m 71.

    4 REPLY
    • Jill I vote ALP and I would tell you to vote for who you doesn’t have to be one of the major parties, just check who they give their preferences to..we don’t want to go through this again

  9. Bet their nice little payoffs for life,won’t be affected…omg they are just not in our world these bloody well off idiots living in million dollar homes, ripping us off every day.grrrrrrr

Leave a Reply

Your email address will not be published. Required fields are marked *