{"id":607,"date":"2017-02-09T20:44:36","date_gmt":"2017-02-09T20:44:36","guid":{"rendered":"http:\/\/trustedagedcare.com.au\/?p=607"},"modified":"2017-02-09T20:44:36","modified_gmt":"2017-02-09T20:44:36","slug":"tax-changes-for-seniors-now-on-the-table","status":"publish","type":"post","link":"https:\/\/trustedagedcare.com.au\/newsite\/2017\/02\/09\/tax-changes-for-seniors-now-on-the-table\/","title":{"rendered":"Tax changes for seniors now on the table"},"content":{"rendered":"

The Grattan Institute says seniors are contributing less to the economy\u00a0<\/em>but taking a lot more out, which has to change.<\/em><\/h1>\n

Two main targets<\/h1>\n

The government is studying recommendations that would cut into the age-based tax breaks for some seniors.<\/p>\n

The suggestions come from independent think tank the Grattan Institute, which says the tax breaks are damaging the federal budget, and winding them back could save about $1 billion a year.<\/p>\n

It is targeting two generous age-based tax breaks \u2013 the seniors and pensioners tax offset (SAPTO) and the higher Medicare levy income threshold for senior Australians.<\/p>\n

As a result, seniors now pay less tax than younger people on the same income.<\/p>\n

\"infographic_tax-changes_chart-1\"<\/p>\n

Generational divide<\/h1>\n

The institute highlights the generational divide through the example of a self-funded retiree couple that has $500,000 in superannuation and $1.4 million in shares as well as a house. They still qualify for a Commonwealth Seniors Health Card that entitles them to cheaper pharmaceuticals and other concessions. Their assets earn taxable income of $70,000 and they draw $24,500 from their super fund each year. They pay $4,049 in income tax combined, including tax of $3,797 and a Medicare levy of $252. SAPTO reduces their tax by $1,698.<\/p>\n

By contrast, a couple in their 40s working full time in minimum-wage jobs and earning a combined income of $70,000, pay tax of $5,494 and a Medicare levy of $1,400. In other words, they pay $2,845 more tax than the seniors on the same income.\u00a0Only middle-income seniors benefit from SAPTO.<\/p>\n

\"infographic_tax-changes_chart-2\"<\/p>\n

The institute makes three recommendations:<\/p>\n

    \n
  • Reduce SAPTO so that seniors pay some income tax unless they qualify for the full Age Pension.<\/li>\n
  • Seniors should also start paying the Medicare levy at the point where they are liable to pay some income tax.<\/li>\n
  • The private health insurance rebate should be provided at the same rate irrespective of age.<\/li>\n<\/ul>\n

    The institute says the changes would have little effect on the 40 per cent of seniors on a full Age Pension. Those affected would be wealthy enough to receive no pension, or only a part Age Pension but they would not pay any more tax than younger households on similar incomes.<\/p>\n

    What next?<\/h1>\n

    But to understand fully how the Grattan Institute\u2019s recommendations would affect you, we suggest you talk to your financial adviser.<\/p>\n","protected":false},"excerpt":{"rendered":"

    The Grattan Institute says seniors are contributing less to the economy but taking a lot more out, which has to change.<\/p>\n","protected":false},"author":3,"featured_media":1271,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[4,8],"tags":[31,32,33],"class_list":["post-607","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-centrelink","category-news","tag-age-pension","tag-centrelink","tag-pension"],"acf":[],"_links":{"self":[{"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/posts\/607","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/comments?post=607"}],"version-history":[{"count":0,"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/posts\/607\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/media\/1271"}],"wp:attachment":[{"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/media?parent=607"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/categories?post=607"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/trustedagedcare.com.au\/newsite\/wp-json\/wp\/v2\/tags?post=607"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}