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Traviz

Australian Pension & the two year non portability rule for expats.

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Forex

I'm in a similar situation with low interest rates and the crash in the AUD.

 

However instead of investing in term deposits for which you are obliged to pay tax, I put all my funds into superannuation. I have an allocated pension which allows me to draw down 5% of my investment per annum. If your super fund is making less than 5% your capital is reduced accordingly. The beauty of this approach is that if you are over 60 you pay zero tax.

 

The OA pension is means tested so if you have other assets besides your family home, this will be taken into account and the pension will be reduced. There is a threshold that allows to have income from other investments but I'm not sure what that is. Others may know.

 

I'm not in a position to go back to Oz either and will rely on my investments both in Oz and here in PI to carry me through. But the first thing I would do in your situation is to get your funds into superannuation. Age 67 is the cut off so you still have time. You can invest up to $560k in one go but you may have to pay 15% contribution tax.

 

If you intend to go this way I also suggest you see a good financial adviser who will be able to determine the best approach, including options for your OA pension.

 

Looks like a trip back to Oz is your best bet to sort this out. 

 

Here's an excerpt for an article I found on the subject which explains it better:

 

For everyone else, there is a Commonwealth-funded retirement income system that is ranked No. 3 in the world — for good reason. It’s designed to give you a reasonable level of comfort in retirement, particularly if you own your home mortgage-free.

 

Let’s take a homeowning couple, both aged 65 with $260,000 in liquid investments. After some basic research and advice they discover that moving $250,000 into super and then immediately into a tax-free account-based pension will ensure they pay no tax whatsoever in retirement.

 

Under the account-based pension rules, they’ll be compelled to draw out 5 per cent a year.

 

How long that pension lasts will depend on the earnings and the drawdown rate.

 

If it generates 5 per cent income and there’s a 5 per cent drawdown, the capital stays the same. Over time, a conservative portfolio should have no real difficulty averaging this outcome.

 

Then enters Centrelink. Applying the means-test rules for a couple, we see their total assets are well below the $291,500 asset test threshold because the house does not count. Even with the complex income test deeming system, an assessable $278.50 per fortnight is under the $288 income-free area.

This boils down to you getting a full pension of $1307 per fortnight plus $480 from the account-based pension for a combined total of $1787.

 

That works out to a pretty decent $46,462 a year.

Edited by Forex
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ozboy

The trouble is many expats are not cashed up to be investing in anything...if you depend solely on the aged pension, then the unstable AUD will always stress you out....I remember during the Greece drama, every nite i was in a constant state of anxiety, checking the day's trading results and watching my super slowly disappear and memories of what happened to my funds in 08..I just converted everything into 100% Cash....at least i can sleep..

 

The way things are going and the current Centrelink scam investigation are only going to make things harder....My advice is try and get your family to OZ...no matter how hard people say it is, there is always a safety net and as someone said, your wife, being young, can get a job that pays reasonably good money, your kid's get a future or risk all and do the 2 years....just my opinion... :idontknow:

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KennyF

 

 

Does this mean that for the 2 years prior to my reaching pension age the same 78 weeks would apply ?

 

I can't answer that because I did the two years after applying. (but my logical guess would be yes)

I made 3 x 13 week trips to Cambodia during my 2 years.

Remember, they stop your pension during that 13 weeks.

 

The point is, you're a resident of Oz and plan to stay a resident forever (wink wink, they must believe this to be true)

As a resident, you can certainly go OS on a holiday whenever you like, but not longer than 13 weeks.

You certainly have good reason for so many trips because you have the family.

 

KonC

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mikewright

 Seems to me that as OP cannot live in the Philippines on his current income, he has no choice but to return to Australia to establish residence there and hence qualify for the pension. As OP states, he has "meager" investments, so the longer he waits the more he eats into his investments, until possibly he and his family end up with no investments at all and no pension. Unless interest rates or the value of the Australian dollar rises dramatically in the near future, of course, which seems unlikely.

 

 Another consideration is that if a medical emergency arose, the medical fees could quickly wipe out any investments the OP has.  Having the pension would at least provide some financial security for OP and his family.

 

JMO.

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garg

You really want to educate your children in the Philippines?

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Traviz

Thanks to all for the replies guys. Lot of information and links to study and digest. Will take some time.

 

A problem with taking my wife to Oz, is that Centerlink will reduce the pension payment because: I'm married, and she is with me.

They also will take her earnings in account and reduce it even more if she works. :(

 

Only our baby is eligible for citizenship by descent (which I'm processing at the moment) as I'm Step Dad to the older girl.

So, wife partner Visa is around $7k, girl $2.5k, agent fees $3k plus taxes, passports, airfares etc, etc..

Renting an apartment in Australia to live in etc etc..Would still cost a lot of money.

Maybe close to $20,000.00 when all's said and done!  

 

If I have to start spending my meager capital, perhaps I'd be better off spending it here if the return is better and I don't need to be away from my family.

 

This is what my wife wants to do.

She suggested starting a business or buying some cheap hectares of land with lots of coconut trees to help provide us with income.

Would be even better if we put up a small cottage on it, to enable us live there and rent out our nice Western style main home for more income support.

 

I'm very reluctant to have anything to do with complicated super funds, because the government seems to constantly changes the rules to suit themselves; as soon as people latch on to anything good happening that gains momentum, the Government steps in.

 

They are also constantly changing the rules with the Old Age Pension too.

I get the Australian Super Guide, and every month's issue over the last year seems to have news in it of how the Government is constantly changing the rules of the game. It's sickening to be marginalized like this after faithfully paying huge taxes all my life.

 

Anyway guys, thanks to all for your answers and links.  Keep em' coming. 

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KennyF

I just remembered something.

One of my buddies here on Camiguin island Jeff Baker came down with cancer.

He was I think, living with the mother of his kids but may have been married.

Anyway, he was able to get her and the kids into Oz very fast and cheaply declaring his girlfriend to be his care giver.

She was even able to benefit by being his care giver.

Jeff eventually succumbed to cancer last year so I can't follow this up but maybe someone else can.

 

KonC

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ozboy

Also Visa fees are going up yearly....Check how much it cost in previous years...

 

 

The Budget for the 2015-16 financial year was tabled on Tuesday night.

In terms of the impact on immigration, the effect can be summarised as "Migrants to Pay More" with application fees for most visa types increasing from 1 July 2015.

Increase to Offshore Application Fees for Family MigrationHardest hit will be offshore visa applicants in the family stream. Currently, it is much less expensive to lodge an offshore family stream visa compared to lodging from within Australia. For example, it currently costs $4,630 to lodge a partner visa offshore, versus $6,865 to lodge the application in Australia.

Immigration will "harmonise" application fees for family stream visas from 1 July. As a result, offshore applicants will pay the same higher fee as onshore applicants. This change affects partner visas, and also prospective spouse (fiance) visas for which the fee will increase by over $2,000. This brings a whole new meaning to "Harmony Day".

Non-Contributory Parent, Other Family, and Special Migrant category visas will not only be "harmonised" but subject to a 10% increase in fees. For instance, the fee for an offshore parent visa will increase by $1,500. Visa types subject to both "harmonisation" and the 10% increase include:

  • Non-Contributory Parent: $3,870
  • Aged Dependent Relative: $3,870
  • Remaining Relative: $3,870
  • Distinguished Talent: $3,655
  • Former Resident: $3,520

The good news is that at least there seems to be no immediate plan to again attempt to abolish other family visas, so at least it would appear that these visa categories will remain open for the time being. Significant Investor Visas - 50% Increase in FeesThe Significant Investor stream of the Business Innovation and Investment Subclass 188 will face a 50% increase in fees to $7,010.

 

5% Increase for Most Visa Application TypesMany other visa types are subject to a 5% increase - examples include: CPI Increase for Skilled Stream VisasRemaining visas are subject to a CPI increase of 2.3% - these include most of the skilled stream visas as follows:
The modest increase in skilled migration fees, as compared to the hefty increases to family migration fees, really underline the current government's focus on skilled migration over family migration. Working Holiday Makers to Pay More TaxIn Australia, individual tax payers who are generally subject to a $20,000 tax free threshold - that is, they are not subject to tax on the first $20,000 of their income. The tax free threshold is only available to people who are residents of Australia for tax purposes.

From 1 July 2016, Working holiday makers will no longer be considered tax residents, and so lose their access to the tax free threshold. This will result in them paying up to an extra $3,800 in tax each year.

https://www.acacia-au.com/budget-2015-16-migrants-to-pay-more.php

I cannot believe the Immigration Department raising the fees for Partner Visas AGAIN! Early last year I wrote an investigative series on the high price of love. Back then the on shore application fee was $4,575. Now the fee is $6,865. That is just for the partner, no application related costs or even children! The fees for children included in the application have risen dramatically too. There seems to be a problem with the web page, as the headings don’t show, but the columns to the right are for children over and under 18. The column with N/A in it is headed “Non-internet application charge” so we can assume that is coming.
eamoyeniyi.com/2015/01/01/australian-partner-visa-fee-increases-again/
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KennyF

I find it hard to stomach that an Aussie who marries to a non Aussie girl over seas and has kids must pay a couple of months of his salary to bring her home with him.

I married an English girl in Europe and had to apply for her visa in London.

The interviewer granted her a visa while we waited saying "we're not in the business of breaking up families".

It cost stuff all, maybe a few hundred dollars.

But that was in 1979.

 

I guess nowadays the Australian government doesn't give a rats arse about its citizens.

 

KonC

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ozboy

Well Kenny...they need the money to pay for our ''Refugee'' intake.......when Aussies call for an end to migration, this is the way the government appeases them.....All ''Smoke and Mirrors''

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contraman

 

 

I guess nowadays the Australian government doesn't give a rats arse about its citizens.

 

It is more like, "There are so many routing the system that it had to be made tougher".

The downside is that it does disadvantage a few genuine ones. :(

 

There is the other side as well,  like myself (and many others) who have paid taxes to OZ for many decades but are not entitled to ANY Old Age Pension or benefits :idontknow:

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ozboy

Looks like the Poms are on the same road... :toilet:

 

The UK government has become increasingly desperate to find any means it can to reduce numbers. It also plans to increase the required salary for work visas to £35,000 (roughly A$70,000). This hasraised fears that Australian citizens could be hit hard and damage the long-standing close relationship between Australia and the UK.

Relations have become increasingly frayed over the last two years as Australians are abandoning the UK “in their thousands”. The number of work visas issued to Australians by the UK Home Office has halved since 2006 and is now fewer than 15,000.

Between 2011 and 2012, the number of Australians resident in Britain dropped by nearly 10,000. A key factor in this decline were new visa restrictions brought in by the UK government in 2011. These measures included a cap on non-EU migrants permitted to acquire sponsored work visas.

https://au.finance.yahoo.com/news/why-is-the-uk-ramping-up-costs-for-potential-australian-migrants-050808910.html

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hagler

I would make a suggestion and that would be to get your children their Australian passports and then get your wife a 12 month multi entry tourist visa. The 12 month multis are very easy to obtain lately for some reason and it will allow your wife to stay in Australia for stays of 3 months in a 12 month period at a time before she needs to jump on a plane out. A cheap flight to Bali or Fiji will satify her leaving the country and then re-entering. The cost of a 12 month multi is $145

 

In my case my significant other was initially granted a 3 month single entry ( only because that is what I applied for) and then she went back to the PI and we applied for a 12 month multi and 4 weeks later it was granted. You can "stretch" a 12 month out to 15 months by careful planning of your entry and exit dates.

 

So for a total of $290 AUD you will get 18 months of your wife with you leaving only 3 months for her to be in the PI without you

Edited by hagler
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seram

Don't forget to add about 60,000 peso to your costs of having your child registered as a citizen by decent for the DNA test. I have just been through it last November.

 

cheers

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