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Tuesday, 7 December 1976


Mr Neil asked the Treasurer, upon notice:

(   1 ) What is the cost to the Government of the abolition of the means test in respect of persons over the age of 70 years.

(2)   What would be the cost to the Government if the age limit were to be reduced to (a) 69 years, (b) 68 years, (c) 67 years, (d) 66 years and (e) 65 years.

(3)   What additional revenue is accrued by the Government due to the previous Government's decision to make age pensions subject to income tax.


Mr Lynch - The answer to the honourable member's question is as follows:

(1)   Insufficient information is available about the income distribution of the means-test-free pensioners to estimate accurately the current cost of the abolition of the means test in respect of these pensioners. Means-test-free pensioners are not required to supply information relating to income unless they apply for additional benefits. Nevertheless, the Department of Social Security has advised that the current annual cost, based on November 1976 rates, is probably within the range of $280-300m.

(2)   The Department of Social Security has advised that the estimated annual cost of reducing the age limit for means-test-free pensions is as follows:

 

The cost shown above is based on the estimated number of persons and pensioners at the end of December 1976. The cost shown is the 'gross ' cost, Le. it does not take into account the increase in taxation collections that would result.

(3)   Preliminary statistics for the 1975-76 income year indicate that the income tax for that year attributable to taxation of age and service pensions is an amount in excess of $50m.







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