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Local pensioners to be hit by Abbott's PPL Tax Hike



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Campaign Media Release

LOCAL PENSIONERS TO BE HIT BY ABBOTT’S PPL TAX HIKE

Pensioners in suburbs across the country are in line to be hit by Tony Abbott’s tax hike to help pay for his unfair and unaffordable paid parental leave scheme.

In suburbs across Australia, pensioners could be up to $800 a year worse off under Mr Abbott.

Part pensioners have an average income of just $23,200 per year - Mr Abbott’s scheme hits those who can afford it least to give women earning up to $150,000 up to $75,000 - it’s just not fair.

For every woman who will receive up to $75,000 under Mr Abbott’s unfair and unaffordable PPL, up to four part pensioners could be hit.

In Eden Monaro in NSW up to 10,200 part pensioners could be hit to support around 1,680 women to receive up to $75,000 each. That means on average for every woman in Eden Monaro who receives Mr Abbott’s unfair PPL, up to 6 local part pensioners could be hit.

In McEwen in VIC up to 8,700 part pensioners could be hit to support around 1,920 women to receive up to $75,000 each. That means on average for every woman in McEwen who receives Mr Abbott’s unfair PPL, up to four local part pensioners could be hit.

In Rankin in QLD up to 5,500 part pensioners could be hit to support around 2,790 women to receive up to $75,000 each. That means on average for every woman in Rankin who receives Mr Abbott’s unfair PPL, up to twice the number of local part pensioners could be hit.

And the story of Mr Abbott’s cuts is the same in every suburb across the country.

The tax hike comes because of Mr Abbott’s refusal to provide franking credits as part of his 1.5 per cent company tax levy, meaning many age pensioners would join the retirees, superannuants, charities, universities and businesses to be hurt by this new tax.

This is how part-pensioners would lose money under Mr Abbott’s PPL scheme:

 Part-pensioners have their income and assets assessed to determine their pension rate.

 Under the Age Pension income and assets tests, part-pensioners with shares would lose money under Mr Abbott’s PPL scheme but wouldn’t receive any extra pension. This is because neither the pension income test nor the pension assets test takes into account money received through dividends.

 Around 350,000 part-pensioners have their pension calculated under the assets test. These part-pensioners have an average of $312,000 in assets. Under Mr Abbott’s PPL scheme, these pensioners could be up to $800 worse off each year.*

 Around 620,000 part-pensioners have their pension calculated under the income test. These part-pensioners have an average of $124,000 in assets. Under Mr Abbott’s PPL scheme, these pensioners could be up to $250 worse off each year.*

 The pension income test uses deeming rates to attribute an amount of notional income to a part-pensioner from their financial investments for the purpose of determining their pension rate. Under deeming, as the actual rate of return from investments is not taken into account, if dividend returns fall because of the franking tax hit, pensioners will lose income from their shares but won’t get an increase in their pension.

 The pension assets test considers the total value of assets to determine someone’s pension. That total value is not affected by a change in income that flows from the asset (e.g. dividends).

Almost one million part-pensioners could be worse off under Tony Abbott’s paid parental leave scheme and not one of them will receive an extra dollar in pension.

*Note: assumes that assets are Australian shares

27 AUGUST 2013

Communications Unit: T 03 8625 5111 www.alp.org.au

Authorised by G. Wright, Australian Labor Party, 5/9 Sydney Avenue, Barton, ACT, 2600

Electorates hit by Tony Abbott’s PPL tax hike*

NEW SOUTH WALES

1. Lyne - for every woman who receives Mr Abbott’s unfair PPL, up to 9 local part pensioners could be hit up to $800.

2. Gilmore - for every woman who receives Mr Abbott’s unfair PPL, up to 7 local part pensioners could be hit up to $800.

3. Paterson - for every woman who receives Mr Abbott’s unfair PPL, up to 7 local part pensioners will be hit up to $800.

4. Cowper - for every woman who receives Mr Abbott’s unfair PPL, up to 8 local part pensioners could be hit up to $800.

5. Page - for every woman who receives Mr Abbott’s unfair PPL, up to 8 local part pensioners could be hit up to $800.

VICTORIA

1. Flinders - for every woman who receives Mr Abbott’s unfair PPL, up to 6 local part pensioners could be hit up to $800.

2. Corangamite - for every woman who receives Mr Abbott’s unfair PPL, up to 4 local part pensioners could be hit up to $800.

3. Gippsland - for every woman who receives Mr Abbott’s unfair PPL, up to 6 local part pensioners could be hit up to $800.

4. Bendigo - for every woman who receives Mr Abbott’s unfair PPL, up to 5 local part pensioners could be hit up to $800.

5. Dunkley - for every woman who receives Mr Abbott’s unfair PPL, up to 4 local part pensioners could be hit up to $800.

QUEENSLAND

1. Hinkler - for every woman who receives Mr Abbott’s unfair PPL, up to 9 local part pensioners could be hit up to $800.

2. Wide Bay - for every woman who receives Mr Abbott’s unfair PPL, up to 8 local pensioners could be hit up to $800.

3. Fisher - for every woman who receives Mr Abbott’s unfair PPL, up to 6 local part pensioners could be hit up to $800.

4. Fairfax - for every woman who receives Mr Abbott’s unfair PPL, up to 5 local part pensioners could be hit up to $800.

5. McPherson - for every woman who receives Mr Abbott’s unfair PPL, up to 4 local part pensioners could be hit up to $800.

SOUTH AUSTRALIA

1. Mayo - for every woman who receives Mr Abbott’s unfair PPL, up to 6 local part pensioners could be hit up to $800.

2. Hindmarsh - for every woman who receives Mr Abbott’s unfair PPL, up to 5 local part pensioners will be hit up to $800.

3. Boothby - for every woman who receives Mr Abbott’s unfair PPL, up to 5 local part pensioners could be hit up to $800.

4. Sturt - for every woman who receives Mr Abbott’s unfair PPL, up to 5 local part pensioners could be hit up to $800.

5. Kingston - for every woman who receives Mr Abbott’s unfair PPL, up to 4 local part pensioners could be hit up to $800.

WESTERN AUSTRALIA

1. Canning - for every woman who receives Mr Abbott’s unfair PPL, up to 4 local part pensioners could be hit up to $800.

2. Hasluck - for every woman who receives Mr Abbott’s unfair PPL, up to 3 local part pensioners could be hit up to $800.

3. Brand - for every woman who receives Mr Abbott’s unfair PPL, up to 3 local part pensioners could be hit up to $800.

4. Stirling - for every woman who receives Mr Abbott’s unfair PPL, up to 3 local part pensioners could be hit up to $800.

5. Forrest - for every woman who receives Mr Abbott’s unfair PPL, up to 4 local part pensioners could be hit up to $800.

(*Note: figures are based on recipients of Federal Labor’s PPL scheme and numbers of part pensioners, by electorate.)