PPOR Pension Asset Test and Taxation Impact on Self Funded Retirees

Discussion in 'Accounting & Tax' started by Bargain Hunter, 5th Dec, 2019 at 8:28 AM.

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  1. Bargain Hunter

    Bargain Hunter Well-Known Member

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    There has been a lot of discussion on another thread about the PPOR being brought into the pension asset test leading to forced reverse mortgages, downsizing or other arrangements.

    My question is in regard to self-funded retirees taxation position.

    Would the inclusion of the PPOR in pension assets test lead to them being deemed to earn income for self-funded retirees and hence increase their taxable income?
     
  2. Trainee

    Trainee Well-Known Member

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    Isnt deemed income used to assess how much pension you get, and not actually included as taxable income in the tax return?
     
  3. Paul@PFI

    [email protected] Tax Accounting + SMSF Business Plus Member

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    The home at present isnt a factor in an asset test calculation. Proposals to do so have always seen some logic in the concept then the realities of its averse impacts are made obvious. eg How do you strip a pension from a 90 year old widow who has a long term home and no other significant assets ? Forced sales would be bad to any Government as they and their families will vote. Shorten found what happens when you go up against the grannies.

    If it were an asset. no deemed income would arise excepting if a portion was rented. The asset test and the income test are aligned but separate.

    Assets test assets : Age Pension - Assets - Australian Government Department of Human Services
     
    willair likes this.
  4. Bargain Hunter

    Bargain Hunter Well-Known Member

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  5. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker Business Member

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    This would entirely depend on how any such law was drafted.
     
  6. Bargain Hunter

    Bargain Hunter Well-Known Member

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    Understood, however if the government thinks they can get one through but not the other they won’t package them into a single piece of legislation.