Tax changes could hit home hard
PENSIONERS have had a scary couple of months.
Senator David Leyonhjelm started the ball rolling with a major newspaper article in which he stated, "We are not entitled to an age pension merely because we have paid taxes all our life.
"Pensions are not for everyone; fundamentally they are welfare reserved for the poor."
Minister for Social Services Scott Morrison was quick to take to radio to assure pensioners the government had no such agenda.
He promised that if means-testing the family home ever became policy, it would be grandfathered and not affect existing pensioners.
Mr Morrison pointed out that the present system had anomalies. Suppose an asset-rich, cash-poor pensioner couple live in a house they bought many years ago in a suburb that has become fashionable. The house may be worth $2 million today because of general property appreciation, but it does not put a dollar in their pockets.
Their rates bill might be escalating and they might be unable to live on the full pension of $33,000 a year.
Last year's Audit Commission report recommended that only homes over $500,000 for singles and $750,000 for couples be included in the assessment.
It would favour areas where prices were lower, and unfavourably affect those in expensive cities such as Sydney, where the median price is $812,000.
The key is to stay informed as governments at all levels continue to float ideas.
Watch this space.