PENNY PINCHING: Crystal Thomason says she's finding it hard since losing her part pension.
PENNY PINCHING: Crystal Thomason says she's finding it hard since losing her part pension. Henfaes

Retiree says she's been 'cheated' of pension by assets

A BUNDABERG woman who worked all her life feels cheated after the government took away her age pension.

Crystal Thomason says she is finding it hard to live day to day since changes to the assets test were introduced on January 1 and she lost her part pension of $700 a month.

She's since survived on her allocated pension from her super fund.

Now the rates on her Bundaberg home are due and she doesn't know how she will afford to pay them or her other weekly bills.

"I'm behind the eight ball now and don't know what to do," she said.

"I don't even get a pension discount on my rates any more either."

She says the system is unfair because a 7.5% levy was introduced in 1946 to fund the aged pension and continues to be taken from general income tax today.

But the money she paid will now never be in her hands.

"When the aged pension was introduced by the former prime minister Robert Menzies, 7.5% was taken from wages and put in to the fund for the aged pensioners," she said.

"Where is that fund now?

"We, the pensioners, have been gutted and cheated."

The 71-year-old said she was too proud to collect the dole at a younger age but thought she would be entitled to an aged pension after retirement.

Member for Hinkler Keith Pitt said changes to the aged pension were first announced in May 2015 and he wrote to all residents aged between 65 and 75 old to notify them.

He said the changes were designed to help those people with modest or no assets.

"About 171,500 pensioners with modest assets received an increase, on average, of about $30 per fortnight, in their pension, including 50,000 part-pensioners who moved to the full pension," he said.

Mr Pitt said single home owners who no longer received a part pension under the changes would have assets of more than $542,500 (excluding the family home).

"A person in these circumstances has a greater capacity to support themselves."

The retiree said her assets exceeded that threshold but felt she was being punished for working and saving for retirement.

"I worked all my life and saved when possible but now I can't afford my bills," she said.

"I have to watch what I do and how I spend what I have."

Mr Pitt said the Menzies deal and 7.5% levy, called National Welfare, had not been in existence for decades and had been replaced by the current income tax funding of social services.

"Any National Welfare funds collected decades ago, were spent decades ago, on providing hospitals, unemployment or sickness benefits, family payments and the like.

"Claims that National Welfare is still being deducted and no benefits can be seen from it are wrong."

Mr Pitt said people affected by the loss of a part pension because of higher asset bases would not need to draw down more than 1.8% of their assets to be in the same financial position and that's what the government expected most people will do.

"Pensioners who lose pension entitlement will continue to receive the Health Care Card, and those over Age Pension age will receive the Commonwealth Seniors Health card, without having to meet the usual income test requirements," he said.

Mr Pitt said if a persons circumstances changed over time, they could retest their eligibility for the pension.

FUND GONE BUT LEVY REMAINS

THE 7.5% levy and the National Welfare Fund began on January 1, 1946, and contributions were shown separately on personal tax assessments between 1946-50 with the money paid straight into the fund from which claims were paid.

In 1950 the balance in the fund was almost £100 million or $200 million - in today's money the equivalent of trillions.

In 1977, PM Malcolm Fraser transferred the balance (almost $500 million, or several trillion in today's terms) to consolidated revenue.

But still the 7.5% was taken out of everyone's pay.

In 1985, Labor Government repealed Acts No. 39, 40 and 41 of 1945 (The National Welfare Fund Acts) and introduced income and asset testing, excluding millions from the pension for which they had paid.

The 7.5% levy continues to be collected as general income tax


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