Friday, February 24, 2017

Assets and pension cuts

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and this post, Assets and pension cuts
Assets and pension cuts

After the new assets test that has started the 1st of January 2017, there are a lot of pensioners that are lamenting the way that this government has treated them, because that are going to lose some pension. So, they think the money they are losing.
Assets and pension cuts  
Dear readers, as we have said in our last article, Australian pensioners alarmed, here we are continuing to talk about the pensions cut and the effect it has on some pensioners. Depending on what sort of pensioner you are, these changes affects you in some different ways. So, there are some pensioners that their pension does not change at all, some pensioners that will be losing part of their pension, and some will lose it altogether. So, if the pensioners are upset about this change, they are right to be upset.
Anyhow, now let us discuss that example that we have started in our last article, about Mr.  and Mrs Day, who own two houses, they live in one house and rent the other one. Then, we will talk about other cases, if we can and what some pensioner think about doing, because for every action there is a reaction, so, also the pension changes may bring some other changes.
Mr. and Mrs. Day, case about pensions.
First how much they received before, then how much they receive now, and then compare this with other pensioner, whether they are being discriminated, meaning that they are losing more pension that the others. Anyhow, we are only setting this case, in a way the it is easy to understand, so all figures are well rounded figure, and therefore they have not been worked out mathematically.
So, Mr. and Mrs Day have about $580,000 worth of assets beside their own residence;
Before the 1st January change they received about $450.00 per fortnight each;
After the 1st January change they will receive about $350.00 per fortnight each;
So, they will be losing about $100.00 per fortnight each, this is very upsetting because they have problems with renting the house. When the house is not rented, it is hard to live on $350.00 per fortnight. One should keep in mind that a single pensioner that has no assets, receives $873.90 per fortnight, and even they sometimes complain about living a modest decent life. So, let us talk about owning and renting a house, whether it is worth to keep things as they are, or they need to change a few things, to live their life at the level of everybody else. So, how renting a house affects the pensioners. 
Owning and renting a house
People believe that owning and renting a house is the way to go; if you talk to any real-estate agent they will tell you that, but one should ask oneself, is it so all the time, or are there times when it does not work out in your favour, or the way you want, therefore, owning another house is not the best thing to have, which is the case of Mr. and Mrs. Day.
As we have said in our last article, today the Days’ and any house owner find it hard to rent their houses, because there are too many vacancies here in Brisbane. So, Mr and Mrs Day have rented their house for $400.00 per week, and they hope that the tenants will pay the rent on time, and will not damage the house while they are living there. They have worked out that as things are, after paying all the bills, they could average in a year over $200.00 a week net rent. They must estimate a conservative figure, because there are too many vacancies, and there have been times when their house has been vacant for months.
After going over all this stuff, one start to think that there is something wrong with the way things are set up. So, one would ask. Did the Day’s couple make a mistake when they invested in this property? As they were thinking that by having a property for rent, they could be better off when they retied and would have some extra money to enjoy in their old age; because as you can see, it did not work that way at all. In facts, they are worse off, because if they had only the house they are living in, they would have received a lot more pension, than what they are earning from their investment. They could have more good time for themselves, instead of trying to run their property for rent. One could almost feel sorry for them knowing what they are going through now.
One needs to ask, what sort of government is this, can they work out properly what they are doing? They tell the people to save their money for their old age, so that they can live a better life in their old age. But when the people reach their old age, they turn around and take that money away from you, by changing the laws. But that is not all, because they don’t take the money away from their own pensions, if anything they increase it, because their pensions is not assets tested.
What some people could do?
When those things that you have worked hard for, they don’t earn what you expected them to earn, and for that reason, you are ending up In a financial disaster, since you are losing money. You may start thinking many things including about what you want to do, and what you could do with what you have.
In the case of Mr. and Mrs. Day they are losing so much that they may have to think about a different set up, so that they can receive a lot more pension and live an easier life.
As we have said in our previous article, Mr. and Mrs. Day are not on the best terms and they may divorce soon. So now that the pension has gone down more, this thinking of divorce comes back to their minds. Because if they are divorced, they will receive a single pension each. But that is not all, they will own a house each, so they have no more assets, so they will receive the full pension. Now let us see what difference it will make.
Today they receive about $350.00 per fortnight each.
If they are divorced they will receive, $873.90 each per fortnight.
Which is a lot more than what they receive today, the only question left here is will they do it?
Anybody that is losing that much money will certainly do it, to make sure, let us look at those figures again, but this time let us see, how much money they are losing in a year, if we work both pensions together:
Now, they would receive about $700.00 per fortnight, in a year they are receiving $18,200.00.
If they divorce, they will receive 873.90 each per fortnight, which will be $22,721.4 each.
Or 45,442.8 per year. So, they are losing $27,242.8 government pension in a year.
Our own views on this is this.
If people start divorcing, or doing something that entitles them to a full single pension in the future, you cannot blame them, because they have been pushed from the government to do it.
Now, before we finish talking about owning properties that affect the pensioners, let me say my point of view here-under.
Pensioners owing properties
The pensioners that own a rental property today are in a lot of trouble, because everything seems to have turned against them. First of all, the government cuts the pensions, then they cannot rent their properties unless they rent cheap, and also, they cannot sell their properties easily, because there are too many properties up for sale.
Some of you my readers think that I am exaggerating, because everybody things that the properties are always going up. But I tell you what, the boom on the property market for me is already ended, but people are not aware of it yet. When I drive around the street of Brisbane, there are too many signs of places for rent and for sale, when a few years ago, there were none. So, everybody that owns some real-estate should brace themselves now, for the rough ride ahead, this will also affect the pensioners.
Anyhow, we want to conclude this article now, by saying that the pensioners are having a hard time no matter where they turn they find problems.
Therefore, in the future, they better plan to own just a house, and then collect the full pension from the government.
I believe that I have said enough in this article. So, see you in our next article when I have something else to say. Perhaps about the Italian homeless.
Genzano it story
Pensioners alarmed
Next time with, the Italian homeless

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