Warning- Family Tax Benefit

[sbe]

Hi Blitz.
Your post certainly made sense (more so than most Centrelink employees too!).

I'm actually going to request it in writing from Centrelink, because how you explained it is how I thought it would work, but a Centrelink person has also contradicted that explanation.

ie. They dont even know the rules, so how can anyone else hope to ???

It'd be interesting to see also how they treat those loses moving forward when you 'get your act together'.

I just find it frustrating that only real estate is singles out. Shares aren't. Go figure !

Thanks for taking the time to reply. Your viewpoint has been great.

Happy new year to all.

Simon.

 

[Blitzkrieg]

no probs.

I hope I'm right

 

[D.T.]

Hi,

I got kinda angry and confused when I read this thread. I'm not sure what the heck you people are thinking. I thought the whole idea of investing (in anything) was to escape the need of handouts, forever?

-Regards

Dave

 

[sbe]

Hi Dave.

Let me try to explain it (without writing an essay....)

You are spot on (at least for me anyway), I don't want Gov't handouts like a pension. I plan to be self supporting, possibly paying tax even (hopefully not).

The issue I (and others) have, is that the way it's currently structured, if you choose to invest in property, you are (typically) incurring a cost today for a benefit tomorrow. That's fine, but the Gov't chooses not to acknowledge that.

ie. By sacrificing today, I have to live off less (as do my family), as the gov't ignores the loss incurred. They will however tax that when it reverts to income.

So, by getting a better job, investing for a future (so I don't need gov't assistance), I am rewarded by receiving less family payment than someone who does nothing but ends up with the same disposable income, then wants a pension the other end....

The annoyance is, Family Payment used to be simply a different tax scale applied to your income (No dependants, 1,2,3 dependants etc). This was smart, as the Gov't simply took less tax in the first place.

Now, the gov't taxes me fully, gives the money to Centrelink, who then gives some back to me. Bloody inefficient really. Especially as they now apply all these rules. It's should be simple - you have x dependants, that raises your tax free threshold to $xx,xxx (which is how it's supposed to work).

The first thing to remember - we're talking about money the gov't took out of my pay in the first place. It takes millions and millions of dollars to have Centrelink recycle that money back to me - much easier to not take it in the first place.

Of course, then you get onto the whole tax / welfare topic. Why does the gov't choose to 'program' us to expect a handout (Family Payment, Rent Assistance etc etc etc).

Welfare should be when you have no job. Otherwise, the tax system should be such that it doesn't take what it has to give back (inefficiently, at great cost). It would also get people more programmed into accepting responsibility for their own financial situation.

Whoops. Said I wansn't going to write an essay......

Oh well.

Hope that makes sense Dave.....

Cheerio

Simon.

 

[Joe D]

I understand the problem but don't see the difficulty.

If you have IPs, then leave this until your yearly tax return is prepared rather than claiming as a periodic payment throughout the year.

This is the simplest method .....

However, if you choose to take periodic payment option to help cashflow and you gain (ie overpayment) from this method, then you pay back .....

I agree its not the best method, but personally I don't see why anyone should take issue with it.

Joe D

 

[Blitzkrieg]

Hi sbe,

Wow, I see a little of my ignorance and understand some of your frustration now, I am only 24 and my sons are 2 1/2 years and 2 months old so I've only known the tax system the way it is now!

You do make it sound like a VERY inefficient way of taxing the plebs and I really like the idea of doing away with the FTB and just raising the tax thresholds dependant on ... well ... dependants. Did they used to do it like that? No wonder you're getting annoyed with the new tax system because now.

The way it seems is that if your poor its good to have kids because you will get lots of money and support from the government who at the end of the day want more people in Australia who then pay taxes when they get old and get jobs, etc. etc. But if you work hard to get yourself in a comfortable position, you don't deserve the same support and encouragement to raise kids, hmm at least with that system their will be more "little aussie battlers" to rent my houses