Effects on the new budget??

[DexV2]

Hi everyone,

Was looking around the forum and noticed that there hasn't been any discussion about the impact of the new budget on house prices??

I heard that in the recent budget the have lowered the pension level to $800k? If that is the case, a lot people may not qualify for a pension because their property price maybe have appreciated over that limit? Would that then mean that people may choose to down grade and blow off their saving in order to qualify for a pension?

What are people's thoughts?

Dex.

 

[thatbum]

I just don't think it will make that much difference at all. Not compared to other factors.

 

[BayView]

It's strange; I've seen loads of oldies sell their house to be near their kids and grandchildren, or because the house is too big for them to maintain any longer (health), or their health has failed them and they need outside care, or their Council rates are killing them...but never to keep their pension.

Maybe this trend will start, and escalate.

 

[Paul@PFI]

Hi everyone,

Was looking around the forum and noticed that there hasn't been any discussion about the impact of the new budget on house prices??

....Would that then mean that people may choose to down grade and blow off their saving in order to qualify for a pension?

Blow off ?? Deeming rules don't allow that within 5 years etc. Selling down the home just adds assets that count to assets and income tests. Without advice it could now easily mean losing the pension not accessing it. The home is exempt but not when its sold.

Rule #1 seek financial advice before selling the home of an aged person.

 

[DexV2]

Blow off ?? Deeming rules don't allow that within 5 years etc. Selling down the home just adds assets that count to assets and income tests. Without advice it could now easily mean losing the pension not accessing it. The home is exempt but not when its sold.

Rule #1 seek financial advice before selling the home of an aged person.

Blow off as in go on holidays and spend enough of their assets so that they would qualify for a pension.

So are you saying that if I'm retiring soon and my PPOR is worth >$800k it would be exempted when calculating if I qualify for a pension?

 

[2FAST4U]

The people that were affected by this policy were part-pensioners. Some of them might sell off some assets and spend the money on holidays and entertainment but most won't. There seems to be a shifting of polices especially in regards to the pension. The typical pensioner states something along the lines of 'I worked my whole life and payed taxes so I deserve the pension'. With compulsory super since the early 90s the attitude is changing to self-reliance and they are making the pension akin to welfare. It might still take another decade or so but in the future the rate of pension indexation will get dramatically cut and end up being more in line with Newstart benefits.

"The unemployment benefit is shrinking so fast relative to other benefits that by the middle of the century a single unemployed Australian will receive just one-third of the age pension ? Unemployment benefits and pension rates used to be similar, but began diverging in 1997 when the Howard government indexed pensions to moves in male total average weekly earnings but left NewStart indexed to the consumer price index" (Peter Martin).

Since the mid-1990s, the unemployed have been increasingly disadvantaged relative to average weekly earners and the aged pension recipients. Why is it okay for the aged pensioner to receive significant increases but not the unemployed? The answer is politics!

 

[hugh72]

The people that were affected by this policy were part-pensioners. Some of them might sell off some assets and spend the money on holidays and entertainment but most won't. There seems to be a shifting of polices especially in regards to the pension. The typical pensioner states something along the lines of 'I worked my whole life and payed taxes so I deserve the pension'. With compulsory super since the early 90s the attitude is changing to self-reliance and they are making the pension akin to welfare. It might still take another decade or so but in the future the rate of pension indexation will get dramatically cut and end up being more in line with Newstart benefits.

"The unemployment benefit is shrinking so fast relative to other benefits that by the middle of the century a single unemployed Australian will receive just one-third of the age pension ? Unemployment benefits and pension rates used to be similar, but began diverging in 1997 when the Howard government indexed pensions to moves in male total average weekly earnings but left NewStart indexed to the consumer price index" (Peter Martin).

Since the mid-1990s, the unemployed have been increasingly disadvantaged relative to average weekly earners and the aged pension recipients. Why is it okay for the aged pensioner to receive significant increases but not the unemployed? The answer is politics!

No the answer is there needs to be incentive to work, all governments agree on this. I do agree that unemployed people get a rough deal though

 

[2FAST4U]

No the answer is there needs to be incentive to work, all governments agree on this. I do agree that unemployed people get a rough deal though

There aren't enough jobs! It's got absolutely nothing to do with supply side issues. It's completely reliant upon demand (the side of the equation both sides of Government have forgotten about).

The Fairfax press published an article(October 11, 2014) ? Long-term unemployment in Australia doubles since the global financial crisis ?which said that:

"Long-term unemployment is a growing problem for Australia with about 500,000 people receiving Newstart Allowance for more than a year, a figure that has almost doubled since the global financial crisis".

The Federal Employment Minister Eric Abetz was quoted in the Fairfax article as saying that it:

" It should be the task of every job seeker to make it their full-time job to gain employment ? Because the data is overwhelming ? If you are unemployed, the physical health, mental health, self-esteem, social interaction of that individual are all diminished".

I agree. But the data is also overwhelmingly telling us that there are insufficient jobs (by a large margin) to satisfy the desires for work of the unemployment.The unemployed cannot search for jobs that are not there!If the unemployed have a responsibility "to make it their full-time job to gain employment", then the Government has a responsibility to use its fiscal capacity to provide sufficient work. Before you repeat dogma, such as it's "businesses that create jobs not the Government" remember that it is SPENDING that creates jobs, which can come from either the public or private sector. Currently the privatate sector is not spending enough, which is why unemployment is stuck at 6+% and trajected to increase to 6.5% over the next 3 years.

 

[BayView]

No the answer is there needs to be incentive to work

This should come from within, and if it does; those folks usually find some form of work.

It depends on what you are prepared to accept as employment which will lessen/improve your chances of finding some, I believe.

Unemployment benefits are not there to replace work - they should only ever be a part-support until you find more.

Noone is owed a placement of a job in the career of their choosing. If there is no work in that career; choose another.

Of course; none of the above completely applies to the disabled and there situations are different, so handwringers and bleeding hearts - please don't wade in.

 

[hugh72]

There aren't enough jobs! It's got absolutely nothing to do with supply side issues. It's completely reliant upon demand (the side of the equation both sides of Government have forgotten about).

The Fairfax press published an article(October 11, 2014) ? Long-term unemployment in Australia doubles since the global financial crisis ?which said that:

"Long-term unemployment is a growing problem for Australia with about 500,000 people receiving Newstart Allowance for more than a year, a figure that has almost doubled since the global financial crisis".

The Federal Employment Minister Eric Abetz was quoted in the Fairfax article as saying that it:

" It should be the task of every job seeker to make it their full-time job to gain employment ? Because the data is overwhelming ? If you are unemployed, the physical health, mental health, self-esteem, social interaction of that individual are all diminished".

I agree. But the data is also overwhelmingly telling us that there are insufficient jobs (by a large margin) to satisfy the desires for work of the unemployment.The unemployed cannot search for jobs that are not there!If the unemployed have a responsibility "to make it their full-time job to gain employment", then the Government has a responsibility to use its fiscal capacity to provide sufficient work. Before you repeat dogma, such as it's "businesses that create jobs not the Government" remember that it is SPENDING that creates jobs, which can come from either the public or private sector. Currently the privatate sector is not spending enough, which is why unemployment is stuck at 6+% and trajected to increase to 6.5% over the next 3 years.

I agree with all your points and I can see that you are passionate about this, unemployment is currently rising and it is difficult for people entering the workforce presently. I'm not going to repeat any political dogma, private industry creates most of jobs with government contributing by spending on services and infrastructure.
Things will improve eventually but the new normal will not be like the mid 2000's were new graduates could pick and choose their employer and salary, those times might not return for 20 years.
I have read some of your other posts regarding difficulties finding a job appropriate to your recently completed post graduate studies, all I can suggest is to further improve your skills and look for a niche in a potential industry. Aim to continue to improve your skills and experience and look to slowly work your way up, this may mean taking a unappealing job now for later opportunities or moving interstate or overseas for a while, I had to.
The present conditions although weak are nothing like the early 1990's IMO

 

[2FAST4U]

I agree with all your points and I can see that you are passionate about this, unemployment is currently rising and it is difficult for people entering the workforce presently. I'm not going to repeat any political dogma, private industry creates most of jobs with government contributing by spending on services and infrastructure.
Things will improve eventually but the new normal will not be like the mid 2000's were new graduates could pick and choose their employer and salary, those times might not return for 20 years.
I have read some of your other posts regarding difficulties finding a job appropriate to your recently completed post graduate studies, all I can suggest is to further improve your skills and look for a niche in a potential industry. Aim to continue to improve your skills and experience and look to slowly work your way up, this may mean taking a unappealing job now for later opportunities or moving interstate or overseas for a while, I had to.
The present conditions although weak are nothing like the early 1990's IMO

Thanks for your kind message. As you know from reading my other messages I'm not unemployed and rarely have been; however, unemployment is an issue I feel strongly about and especially the perceptions relating to it.

The mid 2000s were definitely a great time in the Australian economy. Unemployment even managed to get down to as low as 4% in February 2008 (the lowest since the 1970s when unemployment used to average 2% between the Post WWII period and the mid 70s).Looking at ABS stats even the late 90s were not all flowers and roses for unemployment, particularly for South Australia.
http://www.abs.gov.au/ausstats/[email protected]&prodno=6202.0&issue=Feb 2008&num=&view=
"The trend estimate of the unemployment rate for South Australia rose from 9.6% in February 1998 to 9.8% in July 1998. Apart from small rises in 2001, 2004 and early 2007, the trend rate has generally fallen to stand at 4.6% in February 2008".