Expect Pain on Tuesday

[buzzlightyear]

If the purpose was to encourage everyone equally to procreate, the benefit should be equal to all. Sure, some people 'need' it less, but that's irrelevant. It already is skewed - $5k to me is worth less than it is to a single mum who doesn't work, for example.

Australia's taxation system is progressive, so the more you earn, you pay more proportionately, so any benefit that you might get for higher earners should be less. Benefits shouldn't be a fixed % of income for all.

However, given finite government revenues (although with the billions in surplus it doesn't seem that!), I believe the government can better use this money elsehwere.

 

[Apocalypse]

i'm sorry - but, for me, a statement like that is up there with the oldies scrimping so that they "don't lose their pension". a very negative and defensive mindset.

don't look at what you lose - look at what you gain. try the positive mindset instead.

In a broad sense I concur. But it is considered prudent retirement planning to arrange your assets and income (with the use of complying and concessional treated annuities and the like) so as to be 'just' under the pension cut-off thresholds, not so much to be eligible for payments, but to take advantage of the various associated concessions.

Well I just got screwed over, I salary Sacrafice $1000 every 12 weeks so I remain "eligible" for the single parents pension, so I can get the highest rate of Child Care Benefit and Family Tax Benefit, I'm on about $60k otherwise. Well there goes that I'm down about $100 a week now, because my daycare will double (lucky I get 50% back) and my Family tax benefit will halve.

I think it's pertinent here. She's already 'manipulating' things a little - essentially boosting her super (I assume) and using concessions to keep the net effect neutral. I would consider it foolish if she was sacrificing say 20K to remain eligible.

So why not forego the additional hours? Use this time constructively in other pursuits - renovate? study? research? even more time with the kids. Remember I'm not suggesting she forego earning $300 to prevent 'losing' $100. The fact that something like this happens should be stimulus to modify the way Benefits phase out. It can be far more punitive around the levels where unemployment benefits cease - such that earning $10 can 'lose' you $20 or $30.

 

[letiha]

Apocolypse.

The problem really isn't with my work income, I suppose really it the fact that by earning an extra $100-140k from Capital Gains this year will bring by CCB and Family tax benefit down to nothing, this equals about a compined $600 a week.

The loop hole that I use allows me to get my normal pay of about 2200 a fortnight, and on every 6 fortnights Salary Sacrafice $1000 allowing me to stya qualified for single parents pension and thus obtaining the highest rate of family assisatnce despite large capital gains. By reducing my weekly income by 100 / 12 would not lead to the same result.

I suppose I can't complain to much, but it does suck cause I had a pretty good thing going for a while there.

 

[Peter 14.7]

Fair Point.

You have made sacrafices to build that CG and now because you chose to take it next fin year you lose. Does not recognise gain was made over a number of years.

Peter

 

[Perp]

I suppose I can't complain to much, but it does suck cause I had a pretty good thing going for a while there.

If I understand correctly, you're saying that you get about $55K pa in salary, and still get $30K pa in government benefits on top of that. No offence, letiha, but you're right - that's a pretty good deal, for a sole parent to earn $85K.

I know that if you weren't a sole parent and could work full-time that you'd earn significantly more than that in your profession, so I don't begrudge you the benefits in the least, but I am surprised that our government is so generous.

 

[Peter 14.7]

And there is the real problem with our disincentive tax system, the Welfare Trap!

A single mum raising children on $55k is not struggling but not well off either.

My sister is a widow and earns only $15k and could have more work but the pressure on her family (2 children), assistance from 78 year old Grandma, getting kids to school (she starts at 7am), extra travel/fuel and then lost benefits means it is hardly worth doing.

And we wonder why wages are going up, driving inflation and rates because of not enough workers?

The tax review NEEDS to fix this. Our system is based in the 1950's when mum had babies at 22 and stayed home, no one divorced, dad had a secure job for life, houses cost less and grandparents were local and able to provide support.

Regards, Peter

 

[evand]

Why only Labor MPs? Don't Liberal MPs own investment property?

It is because it might have affected too many labour MPs if it did.

 

[letiha]

That includes Child care benefit of $350 a week. I fork out the other $250 a week. so basically $13,000 on childcare.

With HECS and student loan repayment per week I only take home $750 a week, so take out childcare of $250 and rent $320 not a lot left over.

So basically without my Child CAre benefit I would be paying $500 a week for child care, albeit now I will be able to get 50% of this back every 3 months.

Currently I would not be able to get by with out family assisatance.

Add into it the new Child Support reforms, don't get me started, which has halved my child support from $120 a week to $66 a week, when I have the kids for 365 days a year ( and yes I would LOVE for hime to have them for a weekend)

 

[Sunfish]

( and yes I would LOVE for hime to have them for a weekend)

This would indicate that the Gov. didn't conscript him and have him killed in a war. So what responsibility do I (through our Gov.) bear for your situation?

Where is "his" contribution? Did you get involved with a "bum"?

We have raised our family, bought our house and lived well enough without ever having the income you enjoy and without handouts. Middle class welfare is quite new, you know.

Members here are scathing with their criticism of lower class welfare recipients, in the belief that they are to blame for their own situation. Double standards at work, methinks.

 

[letiha]

Some other interesting bits of the budget:

"The Government will reduce the scope for family trusts to be used to lower income tax by utilising losses. This measure has an ongoing gain to revenue which is estimated to be $24.0 million over the forward estimates period.

The Government will change the definition of family in the family trust election rules to limit lineal descendants to children or grandchildren of the test individual or of the test individual's spouse. This will have effect from 1 July 2008."

 

[letiha]

Sunfish.

As I mentioned, he is ony required to pay what the government tells him to pay, and thats what he does may every week without fail. Paying money doesn't make some one a father.


What I hate is I work my back side of 5-6 days per week, having to drag my kids out of bed when it is still dark to take them to daycare and before & after school care, and then pick them up when it is dark. Only to be slightly more ahead finacially then someone sitting at home on their ***. Not only working but also studying full time for the past 4 1/2 years whilst working.

I do this and invest in property because I don't want to have to rely on any government hand outs.

Heck I don't even get a break from my HECS and student loans.

 

[BV]

I am suspecting that it will be hard to pass all their changes through the senate

 

[GoAnna!]

"family trusts to be used to lower income tax by utilising losses"

What do they mean by this? Aren't losses contained within the trust?

 

[Sunfish]

letiha, I have no doubt that being a single Mum would be very difficult but you missed or ignored my point that "we" (Australia) did not put you into this situation. It is as much a conscious choice of yours as it is of those people for whom you have no sympathy when you posted this: someone sitting at home on their ***.

My wife and I chose not to be single parents. In fact, when we were young raising a baby alone was virtually impossible and alternate arrangements had to be made. Be thankful you at least have a choice.

 

[alexlee]

Some other interesting bits of the budget:

"The Government will reduce the scope for family trusts to be used to lower income tax by utilising losses. This measure has an ongoing gain to revenue which is estimated to be $24.0 million over the forward estimates period.

The Government will change the definition of family in the family trust election rules to limit lineal descendants to children or grandchildren of the test individual or of the test individual's spouse. This will have effect from 1 July 2008."

I believe that just says if the named beneficiaries are yourself and your partner, for example, going forward the trust can't distribute to, say, your nephew? It can still distribute to your direct line.

I read somewhere that this becomes problematic where siblings operate a business via a family trust. Though I suppose you can always have individual family trusts owning a company jointly or forming a partnership.
Alex

 

[GreatPig]

I believe that just says if the named beneficiaries are yourself and your partner

I don't think it relates to the named beneficiaries, but rather the test individual specified in a family trust election.

By my understanding, losses in a trust can only be carried forward if a family trust election has been made, naming someone as the test individual. This change just reduces who the valid family members are after that has been done.

I believe the issue is that if losses have been accumulated in a trust, then profits in later years may be able to be distributed tax free if they are offset by the prior losses. By being able to distribute to a wider range of beneficiaries, the overall tax would be kept down (if many are on lower incomes), and thus the same amount of losses would allow a larger amount of profit to be distributed tax free.

Not sure why it's such a big deal though, since if each year's losses were covered by profits in the same year, so that there were no losses to carry forward, the benefit would be the same.

GP

 

[Perp]

letiha, I have no doubt that being a single Mum would be very difficult but you missed or ignored my point that "we" (Australia) did not put you into this situation. It is as much a conscious choice of yours as it is of those people for whom you have no sympathy when you posted this: someone sitting at home on their ***.

Sunfish, you know nothing of letiha's situation.

If a lady has been married and has left her partner due to domestic violence, would your position be that such a woman has made a "conscious choice" to be in this predicament? Or are you assuming that letiha (and others) all chose to have children as a sole parent?

 

[HandyAndy888]

Sunfish, you know nothing of letiha's situation.

If a lady has been married and has left her partner due to domestic violence, would your position be that such a woman has made a "conscious choice" to be in this predicament? Or are you assuming that letiha (and others) all chose to have children as a sole parent?

I really don't think she is that bad off considering...lets face it, she makes 750/week after tax, which is more than most teachers make. As to the people commenting on her situation of being a single Mum, get real. There are a lot of people in miserable marriages, wishing they have the guts to get a divorce. Just have a bit of a think before you start saying people are in "predicaments"...how stupid...

 

[Perp]

I really don't think she is that bad off considering...lets face it, she makes 750/week after tax, which is more than most teachers make. As to the people commenting on her situation of being a single Mum, get real. There are a lot of people in miserable marriages, wishing they have the guts to get a divorce. Just have a bit of a think before you start saying people are in "predicaments"...how stupid...

I meant predicament in the sense of "a situation from which extrication is difficult", not in the sense "an unpleasantly difficult, perplexing, or dangerous situation" - I was simply trying to avoid being repetitive and looking for a synonym for "situation".

I'm not referring at all to the particulars of this person's financial situation, which if you'd read the thread, you'd realise that I'd previously described the government's assistance as surprisingly generous. I make no comment on how well off or otherwise this person is; I simply take exception to the implication that every sole parent with kids "chose" to be in that situation.

My Uncle's wife died of cancer when their kids were 4 and 5 - was that his "choice"? FWIW, he doesn't get any govt benefits anyway. I'm not talking about benefits or money, I'm talking about whether being in that situation is a choice.

handyandy888, I think you're the one who wants to "have a bit of a think" before you label others "stupid". You may need to review the forum's terms of use, particularly "be civil in your posts and be respectful of others views, irrespective of how stupid you might consider them to be".

 

[Sunfish]

If a lady has been married and has left her partner due to domestic violence, would your position be that such a woman has made a "conscious choice" to be in this predicament? Or are you assuming that letiha (and others) all chose to have children as a sole parent?

You're correct, of course. I know no more of the Lady's circumstances than she does of the others' she generalises about.

But the woman you speak of has made three conscious decisions: To marry, have children and to separate. Had her grand-mother made the same decisions a comfortable pension would not have been an option so an alternate solution would need to be found, and could have been unpalatable. Ergo, she is far better of than those of earlier generations and I suggest that it is reasonable to limit to the largese.

At least Granny would not have HECS debt. She probably had little education.