ScoMo stop exploiting seniors

First it was franking credit scares and now deeming rates.

 

Paul Rickard, Director of Switzer Financial Group said, "At the start of 2015, the Reserve Bank’s cash rate was 2.5%. On Tuesday, this was lowered to just 1%. Yet over this period, there has been no change to the Government’s deeming rat – and this is hurting the real incomes of thousands of aged pensioners.

 

"Because the deeming rate hasn’t kept pace with actual investment returns – that is, lowered in line with reductions in the cash rate –thousands of aged pensioners have suffered a decline in real incomes .More likely hundreds of thousands, as there are more than two million elderly Australians receiving a part pension.

 

"Some may be wondering why the Government hasn’t changed the deeming rate and here’s why. From a Treasury perspective, changing the deeming rate costs money. Lots of money. Hundreds of thousands of aged pensioners would become eligible for higher pensions, and thousands of others, who are currently ineligible, would become eligible for a part pension.

 

"Another possible explanation is that our politicians just don’t understand. Age pension eligibility, and deeming in particular, are complex, and with a generous superannuation scheme and comfortable remuneration arrangements, something that most politicians are unlikely to personally experience,” concluded Mr Rickard.

 

5 July 2019.