Retiree John still being hit with tax payment

John Randall may be well into his retirement, but much to the 77-year-old self-funded retiree's dismay, he is still paying tax.

"I don't think I'm wealthy, but I don't qualify to get a pension," Mr Randall said.

"What happens to me, which I think is unfortunate but I don't get much sympathy, is that because the Government prescribes the amount I have to take out of my superannuation each year, I end up with more money in cash than I need to live on, so I end up having to do something with it and I put it in the bank and then I get interest and have to pay tax on it."

PENSION PAY LOOMS AS POLL ISSUE

The Mandurah grandfather, who lives with his wife, said the system for pensioners receiving government assistance was too generous because the family home was not included in the assets test.

A Deloitte expert said Mr Randall would be able to retain the benefits of the Commonwealth Health Card as untaxed superannuation income would be included in the income test for the Commonwealth Seniors Health Card only for new recipients from January 1, 2015.

There were no changes to the treatment of the tax-free status of the self-managed superannuation fund income, the expert said.

The mature age tax offset had been abolished, which might impact on any proposed return to work.

In the lead-up to the Budget, Mr Randall, a former health and safety inspector, feared that health costs would rise but he welcomed using the $7 Medicare co-payment for standard GP visits to set up a medical research fund.

"We'll all see the benefit of that down the track, but for the short term some people will find that difficult," he said.

Mr Randall does not recommend becoming a self-funded retiree. "I think it's punishment for being provident," he said.