My Unique Situation Analysis. Ss Usa Vs Age Pension Oz.

[Ynot]

The 6 months (182 days) travel window is proposed to be closed within the 2015-2016 budget and will reduce to 42 days. With the caveat that the people with the full 35 year working life will not be penalized and may continue to stay out.

 

Hi Im interested in this little piece of information, can you direct me to where that came from, because I will have the 35 years of faithful service of paying taxes to Aus, but I would definitely come back to aus to make an application for the pension when of agem, particularly if I can avoid the clutches of the tax man on the pension even though I would be living in the Phils. 

 

Much appreciated. 

[chris49]

The Government will achieve savings of $168.6 million over four years from 1 January 2017 by reducing from 26 weeks to six weeks the period that some recipients of the Age Pension, Wife Pension, Widow B Pension and the Disability Support Pension can be paid their full basic means‑tested rate while absent from Australia.

After six weeks absence from Australia, pensioners who have lived in Australia for less than 35 years will be paid at a reduced rate proportional to their period of Australian Working Life Residence (AWLR). The AWLR is the period a person has lived in Australia, as a permanent resident, between the age of 16 years and Age Pension age.

Pensioners overseas on the date of implementation will not be affected by this change unless they return to Australia and make a subsequent trip overseas. Pensioners with an AWLR of 35 years or more, or who are exempt from proportionality rules, such as recipients of the Disability Support Pension who are terminally ill or severely impaired and certain Widow B Pension and Wife Pension recipients, will not be affected.
 

 

 

Extracted from the 2015-16 budget, this will not affect you Ynot, but it will catch me.  You should be able to Google search the budget, but it is a bit long.

 

[Ynot]

 

With the ATO classifying you as a non resident, it depends how you arrange your affairs.  The friend I was referring to only comes back to Aus about 2 times a year for a few weeks each time, but as I said it took them 2 years before they classified him as a non resident and started taxing him at the rate of 32.5 cents on every pension dollar.  Their residency criteria is separate to the department of human services.   For instance they may look to see if you lived in australia for more than 6 months, or they may see if you were in Australia for at least 183 days in a calendar year.  Flying in and out of Australia does not reset the the 183 days criteria, they look at the total days you actually spend in Australia during the financial year. The other criteria may be the substance of your residency, maintaining a home, not having a home anywhere else, your bank accounts, your principal place of residence etc.  They have a whole list of critera they take into account when determining if you are a resident or not!!  In regard to myself, when I retiree, I will be too young to claim the aged pension, so I am not relying on it.  I will have my super, so I will be relying on the earnings from that.   So I'm sure by time I am ready to claim the pension they probably would have changed the rules again and it may be too difficult to obtain and live in the Philippines, but if you are able to claim even a portion of it, then why not do it providided its still financially beneficial why not claim the dollars, as I said you may be able to start a cottage industry selling jars of vegemite to expats at a small profit!!

 

Thanks mate for keeping up with the topic.

 

The 6 months (182 days) travel window is proposed to be closed within the 2015-2016 budget and will reduce to 42 days. With the caveat that the people with the full 35 year working life will not be penalized and may continue to stay out.

 

On your residency and tax liability, broadly, I can only address my own situation and paraphrasing the rule which applies to me: An Australian Citizen physically present in Australia on the day he makes his claim, now expand that and figure that after 2 years I might be leaving and returning every 42 days, so that's already 2 years ahead plus whatever time it take for the system to catch up AND

the fact that I'm under the taxable ceiling of around $25k AUD per year, I am not going to worry about that one yet.

 

So summary. I am born Aussie returning home after a long absence, I meet the 10 year residency rule. I do have another income and will be penalized on that. I will be physically present when I make my claim. I have family ties, 3 sisters and numerous relatives who will verify my unique story,

 

I will allow 60 days for a decision and will have funds for that. If my claim is refused and I cannot reasonably appeal I will leave. I used to call Centrelink almost weekly checking and verifying all this and the only thing they have consistently said is: You will be awarded a pension but it will be stopped immediately if you leave the country within 2 years and might not be reinstated even if you appeal. After 2 years these restrictions will lapse and you will be treated the same as anyone else.

 

And I am looking to get a Commonwealth Seniors Health Card which might be important in the future.

 

So mate, I am quite happy here. We will Baptize the 2 kids in November. Probably set off for home early next year, due for a visit anyway.

 

I wonder Ynot if your friend has assets or Super which puts him over the allowable income threshold? Is that why he's taxed and he could he not claim it back.

 

It is complicated, so thanks for your input.

 

No my friend does not have much super savings left, from my last discussion with him, he has just under 50,000 in super no house, and relies on the pension to live in thailand. His pension as I mentioned is taxed at 32.5 cents on every pension dollar. and as you mentioned the pension is reduced by the medicare supplement. he says its tough but he is still enjoying living in thailand with his girl versus living in Australia without his girl.  So in his case being classified as a non resident just makes it that much more difficult. every dollar is taxable, there is no  income threshold

Edited June 2, 2015 by Ynot

[chris49]

Cheers mate. And now a revert back to my American side.

 

American pensions are extremely simple.

 

I also follow baseball and a few American sports. Someone decided a few years ago to break down the statistical side of the sport to such a level, that even a keen sports fan like myself could not understand. And you would need a college degree in the subject just to understand it, something called Sabermetrics. Aussie pensions are the same, the rules are so complex, you need a college degree to work it out.

Edited June 2, 2015 by chris49

[chris49]

The money is  not critical to me. But if I do live long term, the money would be important to Gina and the kids. Although with a good education and a US Passport, I am hoping the kids will be fine.

 

Bottom Line Again: I don't need the money right now, but to upgrade the kids education to fully private x 12 years, we could probably use the money in 3-4 years. It might also mean a new car, more work on the house, but those things are not pressing currently.

 

I have here a nice family, my own private beach, my biking, bike club and racing, it's hard to break away. Will look at it again in 12 months time,**

 

**And keep Gina on her good side ka si she knows I might go back at any time.

Edited June 22, 2015 by chris49