The Federal Budget changes to pension arrangements has prompted actuarial consultancy, Rice Warner, to reassert its claim of three years’ ago that the Government should abolish the part Age Pension and require retirees to exhaust their superannuation funds.
The suggested policy initiative has been raised by Rice Warner principal, Michael Rice, in an analysis of Tuesday’s Budget which noted the manner in which the Budget announcements had moved away from the position on CPI indexing announced last year.
However, Rice said his firm continued to have issues with Australia’s unique means-tested age pension regime which had given rise to the growth in part-pensioners.
“Three years ago, Rice Warner proposed a solution which included abolition of the part Age Pension,” Rice said in his analysis.
“We believe retirees should spend their own money first and then receive a full Age Pension.”
Explaining such a move, he said the Rice Warner approach would allow an exempt amount of assets (say $400,000 for a couple) and would also count the value of the family home above a threshold (say, $1.5 million today).
“People would then apply for a pension when they had insufficient funds to be self-reliant,” he said.
Rice noted that such an approach would show the Age Pension as welfare and not an entitlement – “and that may not be the view of the broader population”.
Sadly Mr Rice you are 100% correct , the vast majority of people in Australia believe Centrelink is their right as they have paid taxes all their working life and now want something in return , it will take a massive shift in culture to change the nations thought process.
As long as Australia continues to pay people that do not want to work then we are fighting a losing battle.