ACOSS rejects pension indexation changes, proposes cuts to well off

The Australian Council of Social Services has released a report into an alternative way the gov can save on pensions without clobbering those who can least afford it with an $80 a week cut after ten years. Honestly, how does the gov expect pensioners to survive? Do they think landlords are going to cut the rent? Are electricity companies going to cut their prices? Are groceries going to magically go down? Just no idea.

Anyway, indexation changes for the poor haven't a hope in hell of getting past the senate. These ACOSS propositions are, as always, much more sensible than the viscous cuts dreamed up by Abbott. 

1. Tighten the Age Pension assets test 

• Reduce the assets test free area for home owners to $100,000 for singles and $150,000 for couples, and increase the taper rate for both home owners and non-home owners from $1.50 per $1,000 of additional assets to $2 per $1,000, so that the cut out point for the part pension for couples is reduced from $1.1 million in assets besides the family home to $794,250 in assets besides the family home - Savings: $1,350 million ($1,450 million in 2016-17).

2. Abolish the Seniors Supplement

• Abolish the Seniors Supplement (available to people who do not qualify for the Age Pension due to their income and assets) from 1 July 2015 leaving the Pension Supplement in place for Age Pensioners - Savings: $240 million ($250 million in 2016-1).

3. Reform Superannuation system

• Increase the preservation age so that it corresponds to the Age Pension access age by 2027 - with early access arrangements for people with disabilities and caring roles that effectively require them to retire earlier. May include allowing access from age 55 for Aboriginal and Torres Strait Islander people and people whose disabilities or caring roles would ordinarily qualify them for certain social security payments (such as the Disability Support Pension or Carer Payment) or by allowing withdrawals earlier than 55 for any purpose up to modest annual and lifetime limits - Revenue neutral.

• Replace existing tax concessions for superannuation contributions with a simpler taxation structure, in which employer contributions are taxed at the employee's marginal tax rate and a capped superannuation rebate is paid into employee's superannuation accounts - Revenue neutral.

• Extend the 15% tax rate on superannuation fund earnings to accounts in the ‘pension phase', in three annual steps of 5% each year - Saving $300 million in 2016-17.

• Stem the avoidance of personal income tax by individuals over 55 years of age who ‘churn' their earnings through superannuation accounts: From 1 July 2016, reduce the annual cap for concessional contributions by $1 for every dollar withdrawn from a superannuation account in the same year by a fund member - Saving $500 million in 2016-17. more

I like the sound of early access being available to us DSP'ers. Have been banging my head against the bureaucratic wall trying to get my hands on it. It's not as if I'm going back to work anytime soon, and in 4 years I'll be able to draw on it anyway. Yet until then I'm supposed to live in poverty. Still dunno WTF to do about this huge unpayable credit card debt.