Left-leaning Australians may look to New Zealand with envy, but Ardern still has much work to do

Jacinda Ardern created an indefinable aura of promise – but just as people fall in love, some have fallen out of love, too.AAP/Mick TsikasIn October 2017, 37-year-old Jacinda Ardern became prime...

Grant Duncan, Associate Professor for the School of People, Environment and Planning, Massey University - avatar Grant Duncan, Associate Professor for the School of People, Environment and Planning, Massey University

Scientists fear insect populations are shrinking. Here are six ways to help

Scientists need your help to protect Australia's insects and track their numbers.Joe Castro/AAPAre you planning a big garden clean-up this summer, or stocking up on fly spray to keep bugs at bay? Befo...

David Yeates, Director of the Australian National Insect Collection, CSIRO - avatar David Yeates, Director of the Australian National Insect Collection, CSIRO

Aquariums, meerkats and gaming screens: how hospital design supports children, young people and their families

This aquarium at the Royal Children's Hospital in Melbourne helps reframe hospitals as exciting hubs of activity with things to do and friends to meet.Shannon McGrath/Advanced Aquarium TechnologiessWe...

Stephanie Kathleen Liddicoat, Lecturer, Architectural Design, Swinburne University of Technology - avatar Stephanie Kathleen Liddicoat, Lecturer, Architectural Design, Swinburne University of Technology

To stop a tech apocalypse we need ethics and the arts

If recent television shows are anything to go by, we’re a little concerned about the consequences of technological development. Dystopian narratives abound. Black Mirror projects the negative co...

Sara James, Senior Lecturer, Sociology, La Trobe University - avatar Sara James, Senior Lecturer, Sociology, La Trobe University

To restore public confidence in apartments, rewrite Australia's building codes

Compliance with the National Construction Code provides no guarantee that an apartment won't leak.ShutterstockA prestige apartment building in Sydney built by a well-known developer is undergoing a s...

Geoff Hanmer, Adjunct Lecturer in Architecture, UNSW - avatar Geoff Hanmer, Adjunct Lecturer in Architecture, UNSW

Explainer: the ideas of Kant

The moody landscapes of Caspar David Friedrich were inspired by Kant's ideas of the sublime.Wikimedia CommonsIt was claimed Immanuel Kant’s routine was so predictable his neighbours could set th...

Cat Moir, Senior Lecturer in Germanic Studies, University of Sydney - avatar Cat Moir, Senior Lecturer in Germanic Studies, University of Sydney

GDP update: spending dips and saving soars as we stash rather than spend our tax cuts

Australians saved rather than spent most of the budget tax cuts, almost doubling the proportion of household income saved, leaving spending languishing.The September quarter national accounts show tha...

Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University - avatar Peter Martin, Visiting Fellow, Crawford School of Public Policy, Australian National University

Fingerprint login should be a secure defence for our data, but most of us don't use it properly

Even though passcode options include swipe patterns and long passwords, many users still use easy 4-digit PINs. This is because people are often lulled into a false sense of security when they use fin...

Nalin Asanka Gamagedara Arachchilage, Senior Research Fellow in Cyber Security at La Trobe University, UNSW - avatar Nalin Asanka Gamagedara Arachchilage, Senior Research Fellow in Cyber Security at La Trobe University, UNSW

The Two Popes: a mixed bag theologically and politically, with bravura performances

Anthony Hopkins (left) as Benedict and Jonathan Pryce as Francis in The Two Popes (2019).NetflixNetflix’s The Two Popes may be best described, borrowing a turn of phrase from Fredric Jameson, as...

Aleksandr Andreas Wansbrough, Lecturer (casual) at Sydney College of the Arts, University of Sydney - avatar Aleksandr Andreas Wansbrough, Lecturer (casual) at Sydney College of the Arts, University of Sydney

Explainer: the medevac repeal and what it means for asylum seekers on Manus Island and Nauru

Jacqui Lambie has made a secret deal with the Coalition government to secure the repeal of medevac.AAP/Lukas CochAfter much negotiation, the government has secured the repeal of the medical evacuation...

Alex Reilly, Director of the Public Law and Policy Research Unit, Adelaide Law School, University of Adelaide - avatar Alex Reilly, Director of the Public Law and Policy Research Unit, Adelaide Law School, University of Adelaide

Having problems with your kid's tantrums, bed-wetting or withdrawal? Here's when to get help

Problems sometimes arise when a child is going through a big change, such as starting school or welcoming a new sibling to the family.ShutterstockRemember anxiously waiting for your child to take thei...

Jade Sheen, Associate Professor, School of Psychology, Deakin University - avatar Jade Sheen, Associate Professor, School of Psychology, Deakin University

The top ranking education systems in the world aren't there by accident. Here's how Australia can climb up

Hong Kong and Korea performed at the same level as Australia in reading in 2000, but outperformed Australia in 2018.from shutterstock.comThe latest OECD Programme for International Student Assessment ...

Julie Sonnemann, Fellow, Grattan Institute - avatar Julie Sonnemann, Fellow, Grattan Institute

Global emissions to hit 36.8 billion tonnes, beating last year's record high

Global emissions for 2019 are predicted to hit 36.8 billion tonnes of carbon dioxide (CO₂), setting yet another all-time record. This disturbing result means emissions have grown by 62% since in...

Pep Canadell, Chief research scientist, CSIRO Oceans and Atmosphere; and Executive Director, Global Carbon Project, CSIRO - avatar Pep Canadell, Chief research scientist, CSIRO Oceans and Atmosphere; and Executive Director, Global Carbon Project, CSIRO

Medevac repealed after government comes to secret arrangement with Jacqui Lambie

The government has finally secured the repeal of medevac by coming to an arrangement with crossbencher Jacqui Lambie, the terms of which she refused to disclose to the Senate because of “nationa...

Michelle Grattan, Professorial Fellow, University of Canberra - avatar Michelle Grattan, Professorial Fellow, University of Canberra

Here’s the boldest idea the government’s inquiry into retirement incomes should consider but might not: no longer exempting all of the value of each retiree’s home from the pension assets test.

The test would merely exempt part of the value of retirees’ homes. The change would free-up funds to support other retirees who are struggling because they have to pay rent.

It’s an idea with an impressive lineage.

The Henry Tax Review suggested exempting only the first A$1.2 million. The bit above $1.2 million would be regarded as an asset and subject to the test.

Henry Tax Review The review said it would hit only 10,000 retirees. The $1.2 million figure was in 2009 dollars, meaning that if the change came in today the review would want it to cut in at a higher dollar figure. The Grattan Institute suggests a lower cut in: $500,000. The first $500,000 of each mortgaged home would remain exempt from the pension assets test, the part above $500,000 would be regarded as an asset. Grattan says it would save the budget $1 to $2 billion a year. The Australian Chamber of Commerce and Industry agrees, as does the Actuaries Institute. The idea scares homeowners Who could object? Labor treasury spokesman Jim Chalmers. Glenn Hunt/AAP The Combined Pensioners and Superannuants Association says asset testing the family home would be “massively unfair”, targeting the vulnerable. But people with high-value mortgage-free homes aren’t normally thought of as vulnerable. Labor’s treasury spokesman Jim Chalmers says it would push more retirees “off the pension, out of their homes, or both”. He is right about the former, but wrong to think the retirees who suffered a cut in their pension or lost their pension would be badly off. The worst off retirees, as recognised by a Senate Committee, are those without homes making do with grossly inadequate rental assistance. Right now it is possible for a single person owning a $1.3 million mortgage-free home and $260,000 of other assets to get the full age pension. Assuming that person draws down on those other assets at the rate of 5% per year, he or she can spend $37,000 per year and pay no rent. Yet homeowners do well A non home owner with $785,000, or half the assets, would be denied the pension. Like the much-richer homeowner, that person would be able to draw an income of about $37,000 per year, but half it will have to go on rent. It’s hardly fair. It encourages retirees with homes to stash more and more of their assets into them in order to get the pension (and pass something valuable on to their children). Retirees with lesser assets miss out and have to rent. But fairness is in the eye of the beholder. The problem is that a ceiling on exemption from the assets test that seems fair in one part of Australia might not seem fair in another where home prices and perhaps the cost of living is higher. Our suggestion could be sold as fair In order to make more equal treatment seem fair to all retirees with homes I and fellow actuary Colin Grenfell have worked up an option that would use the median (typical) price for each postcode as the cut off point for exemption from the assets test. It would happen postcode by postcode, updated every year using Council valuations and as the median prices changed. Only the owners of homes who values were atypical for the area would be affected, and only that part of the value of their home that was atypical would be included in the assets test. Read more: Retiree home ownership is about to plummet. Soon little more than half will own where they live Its key selling point is that it wouldn’t threaten homeowners with values at and below the average for their area. The funds freed could increase the overall pension, but would probably be better applied to lifting rent assistance. It’s important to treat retirees in the same financial circumstances the same, regardless of whether they own a mortgage-free home, and fewer and fewer retirees are owning mortgage-free homes. It would have the added benefit of reducing the pressure on our parents and grandparents to own houses with bedrooms on the first floor that are never opened, not until they die and their houses are sold.

Authors: The Conversation

Read more http://theconversation.com/postcode-by-postcode-a-clever-way-to-include-homes-in-the-age-pension-assets-test-125500