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Australian pension

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On 12/9/2018 at 10:48 PM, Lacessit said:

I'm actually saving the Australian Government money by not calling on the various emoluments of living in Australia as a senior citizen. Such as subsidised transport, plus electricity, water and phone concessions.

I've paid truckloads of taxes all my working life, so politicians can piss it up against a wall. Pollies like Bronwyn Bishop and Joe Hockey ring any bells?

But for the abject incompetence of politicians and ASIC before, during and after the GFC, I would not even need to rely on an Australian OAP. That, plus getting screwed by the Australian Family Law system.

I live in Thailand because if I lived in Australia, it would be in a caravan park, on a daily diet of bowl noodles.

Shameless? You betcha. I'll take the pricks for every cent I can get. And you know what you can do with your moralising.

 

You talking nonsense I live in Australia have no savings in my bank account I am living 

on my pension I don't have a house which I lost due to bad marriage in Thailand 

I pay rent live by my self in a cheap condo eat good meals every day(meat,fish) drink quite 

a bit of red wine pay electricity run my own car(old) pay registration and buy petrol 

and don't eat mama noodles and at the end of the fortnight I still have some money 

left to enjoy a good meal in a Restaurant and some cash and don't tell me i live on 

handouts by the government I had my business for 30 years which I also lost and 2 supers

as well free healthcare and very cheap medication and I live better than I did in Thailand 

where I constantly got ripped of   

 

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I have a question for all you trendsetters out there that know "first hand" about the OAP.

 

Having done some research, and read countless replies to posts etc etc, I know you have to be in Australia at least 2 years prior to the OAP age to be able to have the OAP made portable, i.e. have it paid to your account with you being allowed to transfer it over here, naturally you have to advise Centrelink that you are going overseas for a while or indefinitely, Mr/Mrs Centrelink, I am going away overseas, don't know when I will be back, kiss my left one, etc, etc.

 

What the question I have is, about assets, I did read that if you are single/married and own a house there is a threshold. Well I don't own a house but have money invested within Australia and the actual question is, how much in $'s can I have invested to be just under the threshold to receive the OAP.

 

I am married to a Thai girl naturally and will be applying for the OAP if I decide to return down the track, i.e. if they haven't moved the goal posts and know they will reduce the OAP married pension down to about the single age pension because she is younger, so if I get the single OAP of about $400 or just under, I'm ok with that, but really want to know about the assets test, i.e. does it only apply to homeowners or does it also apply to those who don't own a home and have funds invested.

 

I also know that I would have to shift some $'s at least 5 years before I apply to either get under the threshold which I don't know how much that threshold is, if there actually is one for non homeowners, and if I am correct in saying I would get a single rate pension, even though I am married to a Thai who is also an Australian Citizen. 

 

Just keeping options open and any input would be appreciated.

Edited by 4MyEgo

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10 hours ago, 4MyEgo said:

I found the answer in another post that I must have overlooked:

 

https://www.linkedin.com/pulse/age-pension-ultimate-article-australian-expats-ryan-cullinan-acsi/

That article mentions nothing about deeming so I don't see how you could find anything about investment thresholds there.

 

With respect, It seems like the author collected and rewrote a lot of Centrelink information without a full understanding of the current legislation.

 

Edited by LosLobo

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Excuse me being late to the conversation , 

 

How much is the pension these days ? ( for australian couple ) and what are the qualifications as far as the assets test goes ? 

 

Im 57 , some time to go I know if wanting to claim pension , could have planned for retirement a bit better , but you cant change the past now , 

 

Have very little super , maybe 150,000 between the two of us , have 2 modest houses , maybe 1.2 mill between them .  mortgage 200,000 grand , 

 

long time traveler to thailand , retirement there is something we are seriously considering 

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11 hours ago, LosLobo said:

That article mentions nothing about deeming so I don't see how you could find anything about investment thresholds there.

 

With respect, It seems like the author collected and rewrote a lot of Centrelink information without a full understanding of the current legislation.

 

Scroll down to the bottom, on the left hand side of the page you will see sub headings in blue, click on Financial Investments and then scroll down to For the Income Test, on that line you will see the link to what you are looking for.

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8 hours ago, Silverfern said:

Excuse me being late to the conversation , 

 

How much is the pension these days ? ( for australian couple ) and what are the qualifications as far as the assets test goes ? 

 

Im 57 , some time to go I know if wanting to claim pension , could have planned for retirement a bit better , but you cant change the past now , 

 

Have very little super , maybe 150,000 between the two of us , have 2 modest houses , maybe 1.2 mill between them .  mortgage 200,000 grand , 

 

long time traveler to thailand , retirement there is something we are seriously considering 

Per fortnight Single Couple combined
Maximum basic rate $834.40 $1,258.00
Maximum Pension Supplement $67.80 $102.20
Energy Supplement $14.10 $21.20
Total $916.30 $1,381.40

 

Full pension

From 1 July 2018, pensions reduce when your assets are more than the amounts below.

If you're Homeowner Non-homeowner

Single

$258,500

$465,500

A couple, combined

$387,500

$594,500

A couple, separated due to illness, combined

$387,500

$594,500

A couple, 1 partner eligible, combined

$387,500

$594,500

Based on what you have stated above, I would say you will be getting zero with two properties, and as far as I know, once you earn $50,000 in income, the pension gets whipped out, but you have passed the assets threshold so it's a big NO from Centrelink.

I think with a million $ you can retire gracefully in Thailand, however you should start doing your homework, because once you decide to live here, the ball game can change as far as your residency status and taxes go, however I am not going to go into that as it's very lengthy.

 

Best do your own due diligence and seek the advice of a certified accountant, because residency status is not cut and dry as some will have you believe regardless if you keep your properties you can keep your residency status, but if you believe the words that come out of people's mouth without getting qualified advice and your residency status changes, the tax on non residence who hold property in Australia is 32.5c in every $ with no $18,200 threshold, then you have the land tax for non residence which is different to Australia residence, the list goes on, and capital gains tax will shortly have no 50% discount for non residence, it will be 32.5c from the 1st $ you make on capital gains up to $80,000 then 37c for every $ thereafterver $80,000 and once that 50% capital gains tax discount is removed, it is going to hurt a lot of Xpats, and I believe it comes into play on 1 July 2019 if it has passed through legislation, and it also hits your principal place of residence, so if your going to hold onto your assets, you might want to do 6 months in Thailand and 6 months in Australia to be 100% sure, remember, to hold your residency you must spend 6 months of the financial year in Australia, but then again, nothing is concrete, you have to look up the ATO website and also do a lot of research, Australia will not let you go so easily without wanting to tax you to the hilt, you can ask the ATO to assess your residency status, i.e. make a decision based on your information, keep it as straight as possible and see what the big boss says, that's one way to find out for sure, and you would have it in writing, but watch the fine print.

 

Good luck

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50 minutes ago, 4MyEgo said:
Per fortnight Single Couple combined
Maximum basic rate $834.40 $1,258.00
Maximum Pension Supplement $67.80 $102.20
Energy Supplement $14.10 $21.20
Total $916.30 $1,381.40

 

Full pension

From 1 July 2018, pensions reduce when your assets are more than the amounts below.

If you're Homeowner Non-homeowner

Single

$258,500

$465,500

A couple, combined

$387,500

$594,500

A couple, separated due to illness, combined

$387,500

$594,500

A couple, 1 partner eligible, combined

$387,500

$594,500

Based on what you have stated above, I would say you will be getting zero with two properties, and as far as I know, once you earn $50,000 in income, the pension gets whipped out, but you have passed the assets threshold so it's a big NO from Centrelink.

I think with a million $ you can retire gracefully in Thailand, however you should start doing your homework, because once you decide to live here, the ball game can change as far as your residency status and taxes go, however I am not going to go into that as it's very lengthy.

 

Best do your own due diligence and seek the advice of a certified accountant, because residency status is not cut and dry as some will have you believe regardless if you keep your properties you can keep your residency status, but if you believe the words that come out of people's mouth without getting qualified advice and your residency status changes, the tax on non residence who hold property in Australia is 32.5c in every $ with no $18,200 threshold, then you have the land tax for non residence which is different to Australia residence, the list goes on, and capital gains tax will shortly have no 50% discount for non residence, it will be 32.5c from the 1st $ you make on capital gains up to $80,000 then 37c for every $ thereafterver $80,000 and once that 50% capital gains tax discount is removed, it is going to hurt a lot of Xpats, and I believe it comes into play on 1 July 2019 if it has passed through legislation, and it also hits your principal place of residence, so if your going to hold onto your assets, you might want to do 6 months in Thailand and 6 months in Australia to be 100% sure, remember, to hold your residency you must spend 6 months of the financial year in Australia, but then again, nothing is concrete, you have to look up the ATO website and also do a lot of research, Australia will not let you go so easily without wanting to tax you to the hilt, you can ask the ATO to assess your residency status, i.e. make a decision based on your information, keep it as straight as possible and see what the big boss says, that's one way to find out for sure, and you would have it in writing, but watch the fine print.

 

Good luck

Thanks mate , to be honest , if it was possible , to live a bit in both countries would suit me down to the ground anyway , I have kids , and grand kids are on the way , so that would be the ultimate for me , but wasnt sure if I could afford that 

 

Its a matter of working out a way to maximise my retirement income so i can afford thye best possible lifestyle  , both my houses are good development blocks , both corner blocks that can be subdivided , which is another option over the next few years . build - sell , build sell , 

 

My thoughts without professional advice would be to have one property to come back and forward to , maybe even an apartment , and roll the rest into a super fund , with maybe the pension supplementing that 

 

I remember being told, you can declare real estate outside of the house you live in to be part of your super fund , not sure if that is true or not and whether that would make it exempt from assets , which would be another option if that was the case . 

 

need to sit down with an expert and run my thoughts by him to see if im on the right track . 

 

Cheers 

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After reading  the link from a few posts back , it looks like im out of luck then on assets test , and if i roll it over into super , it still counts as assets ?  

 

It looks like Im in that middle ground where I dont have a great deal of money to retire on , and dont qualify for pension anyway 

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56 minutes ago, Silverfern said:

After reading  the link from a few posts back , it looks like im out of luck then on assets test , and if i roll it over into super , it still counts as assets ?  

 

It looks like Im in that middle ground where I dont have a great deal of money to retire on , and dont qualify for pension anyway 

I have a family of 6 and I budget on 60,000 baht a month, that's about 2k AUS, however I would say it's more like 100,000 baht, by the time you add holidays and other bits and pieces into it, I mean that's a comfortable life, no skimming on food, however house paid off, no debts, run a car and bike.

 

If you live 6 months here and 6 in Oz, you should be able to enjoy both worlds, but then again see what a professional advises you on, it might be that you need to shift a property over to one of your kids and of course take out a caveat to the value of the property, i.e. you being 1st mortgagee on the property, like a bank, so kid cannot and I am not saying will, stick it too you or if married and the wife, husband splits and wants to claim on that property, might be an option to reduce your assets ?

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49 minutes ago, 4MyEgo said:

I have a family of 6 and I budget on 60,000 baht a month, that's about 2k AUS, however I would say it's more like 100,000 baht, by the time you add holidays and other bits and pieces into it, I mean that's a comfortable life, no skimming on food, however house paid off, no debts, run a car and bike.

 

If you live 6 months here and 6 in Oz, you should be able to enjoy both worlds, but then again see what a professional advises you on, it might be that you need to shift a property over to one of your kids and of course take out a caveat to the value of the property, i.e. you being 1st mortgagee on the property, like a bank, so kid cannot and I am not saying will, stick it too you or if married and the wife, husband splits and wants to claim on that property, might be an option to reduce your assets ?

Thanks mate you have been really helpful , 

 

I have a few options open to me , one , which is probably the most sensible , is to stick it out here for a bit longer ,keep working and  develop the properties , to maximize their potential financially , 

 

Borrow to build another home on each property one at a time , live in each one for 2 years before selling to avoid capital gains , invest wisely after selling , maybe apartments in my kids names like you say , leaving one in our name 

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5 hours ago, 4MyEgo said:

 "and as far as I know, once you earn $50,000 in income, the pension gets whipped out"

Hmmm.... a single non homeowner will lose pension at $58k if earned from a salary but a $50k draw down from super of $500k or earnings from $500k of shares the person will still draw a pension of $696/Fn.

 

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1 hour ago, Silverfern said:

Thanks mate you have been really helpful , 

 

I have a few options open to me , one , which is probably the most sensible , is to stick it out here for a bit longer ,keep working and  develop the properties , to maximize their potential financially , 

 

Borrow to build another home on each property one at a time , live in each one for 2 years before selling to avoid capital gains , invest wisely after selling , maybe apartments in my kids names like you say , leaving one in our name 

Sometimes developing doesn't work out, i.e. timing has to be crucial and the loan to valuation ratio has to be practical, suffice to say you might also look at selling each site with DA approval as opposed to developing.

 

If your financial and can live in one assuming its a "duplex style" development, then sell it, i.e. the one you live in, your free from capital gains tax on that one, as for the 2nd one, you move into after you sell the first one, and let's assume for an example its two years after, you live in the 2nd one for two years, you should pay zero capital gains tax because if you move into an investment property, its capital gains tax is apportioned e.g. you rented it for two years and you moved into it for 2 years, therefore rendering zero capital gains tax payable as the time frame you rented it and lived in it equals the same amount of time, therefore equalling it out, that said, always talk to a certified accountant before you start something for confirmation.

 

Now if you really want to get funky, talk to another qualified person, maybe a financial planner and invest the proceeds into the Australian stock market ASX, buying only fully franked dividends as there is no tax payable on shares if they are fully franked, i.e. the dividend is already taxed when you get your payment, usually every 6 months, sure the stock might drop and of course it will go up, the added bones is that there is no capital gains tax payable when you sell, so you live off your investment, i.e. dividends from fully franked shares, as long as your a non resident, your home free, however if you remain an Australian resident, you will pay the usual tax and capital gains tax, now go figure that one out, i.e. if you work in Australia, and have shares in Australia, you pay tax on your income, plus the money you make on your dividends which gets added to your salary, and then you cop capital gains tax.

 

This guy I know, sort of a smart kind of guy, got rid of his property and invested in the ASX and is living a tax free life in the Land of Smiles, suffice to say, you got to do the research and play the game, their rules not mine, like I said, just paying the by the rules, that said, my share portfolio is a little down of late, but prior to that, it was up, and I have been averaging about 120,000 baht tax free on half a mil invested which works out to be about 12.25% on my investment, however I do not have a broker, I do it all myself, although I have been told brokers can make you more, but they get 1% in and 1% out so they are making about what you are making, but each to their own, and I feel more comfortable controlling my own, as for the money in the bank (back up), I pay 10% tax on what I make there as a non resident.

 

The world is your oyster, just do your research and start planning, and NEVER go all in. 

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35 minutes ago, LosLobo said:

Hmmm.... a single non homeowner will lose pension at $58k if earned from a salary but a $50k draw down from super of $500k or earnings from $500k of shares the person will still draw a pension of $696/Fn.

 

 I learn something every day.

 

Are you certain that if you have shares and earn $50,000 you can still draw a pension of $696/Fn ?

 

I thought you can only earn $172/Fn, after that they reduce your pension by $.0.50c for each $ ?

 

Now are we talking draw downs or earning here, which could be the difference, because if what you're saying checks out, it's too good to be true, but then again so was the time when I found out that you don't pay any tax on fully franked shares if you invest in the ASX as a non resident.

Edited by 4MyEgo

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