Jan 19, 2017

‘Aged of Entitlement’ shows Older Australians pay less tax than Young People

A recent Grattan Institute report has shown that older Australians pay about $1 billion a year less tax than younger Australian with identical incomes.

Previously, it was approximately between one quarter and one third of seniors who paid tax. However this has now decreased to less than half of that – making it around one eighth of seniors still paying tax.

The tax decreases began with the Low Income Aged Persons Rebate, followed by the Senior Australians Tax Offset. After that their superannuation became tax free.

To better understand the situation the report, titled “Age of Entitlement”, compared two couples; “James and Linda” who are over 65, and “Michael and Jenny” who around 40.

Both couples earn the same combined taxable income of $70 000. James and Linda from superannuation and investments and Michael and Jenny from wages. The older couple hold two Commonwealth Seniors’ Health Cards and pays $4049 in tax. The younger couple, who also have a higher Medicare levy, pay $6894.

There have also been calls to alter measures to save the government $1 billion a year. This would include changes to Seniors and Pensioners Tax Offset, Medicare levy income threshold available for seniors, and private health insurance rebates which are only available to older Australians.

These proposed changes are most likely to affect seniors who are wealthy enough to receive no (or a part) pension. The changes would have little effect on the 40 percent of seniors who currently receive a full Age Pension.

The issue isn’t necessarily that the older couple haven’t paid their taxes, it’s the amount which is causing discussions.

The older generation over time would have paid less tax than the generation after them. While they are getting taxed less, their incomes have been increasing and the amount the government spend on seniors in the health sector is also increasing. Essentially what the adds up to is that they are taking more money out and putting less in.

Since the release of the report, it has raised discussions around whether or not seniors are taking too much from the public purse – or rather is it basic human right to be looked after as you reach your twilight years regardless of your tax contribution?

Leave a Reply

Your email address will not be published. Required fields are marked *

Banner Banner
Banner Banner

Strangers send 30,000 cards plus surprise party thrown for resident’s 101st birthday

Spending her 100th birthday alone during one of the UK’s lockdowns was not what one British woman had hoped for. However, being thrown an extravagant party to celebrate her 101st birthday went past her wildest expectations.  Read More

What are Gay People’s Concerns About Aged Care?

A new research has shown that many older gay men are worried that their sexuality may cause problems if they want to move into an aged care facility. These men fear that they will be ostracised by homophobic residents and their families, as well as care workers and management at the facility. The Swinburne University... Read More

Benefits of community living

In this episode of Grey Matters, Tracey and Ben discuss the benefits of aged care community living. Community living has some distinct differences and benefits compared to living in your own home or a residential aged care facility. Tracey explains how aged care community living is like a village within a village and how the... Read More
Banner Banner