Wednesday, September 26, 2012

Elderly Australians: We don't have those $100 bills...

Well, we might have some of them

Older Australians hoard thousands of dollars in cash to pay for their funerals, but they don’t do it to get the pension says Seniors Australia, which has labelled the suggestion seniors use cash to defraud the pension system "unfounded and offensive".

Former senior Reserve Bank official Peter Mair has written to the governor of the Bank suggesting elderly Australians are behind the the extraordinarily high number of $100 notes in circulation.

Reserve Bank figures show there are ten $100 notes in circulation for each Australian compared to only seven $20 notes.

“In broad terms the average value of notes held by New Zealanders is about one third of the $A2000 held by Australians,” Mr Mair writes to governor. “An obvious explanation - means-test free age-pensions in New Zealand - points to the benefits some pension recipients in Australia unfairly take by holding undeclared assets masquerading as $100 notes.”

Mr Mair says the government should consider removing $50 and $100 notes from circulation to make hoarding more difficult.

National Seniors Australia chief executive Michael O'Neill said there was “no doubt” some senior Australians kept large amounts of cash in their homes.

"I know people who have $6000 or $7000 or $8000 put aside for their funeral,” he told the Herald... “They still have that attachment to the folding stuff. And I think part of the attitude is wanting to have money there to pay for the funeral, so the family won’t have to worry.”

But he said he had never heard from any of his members about hoarding high-denomination notes in order to get access to the pension and the prized Commonwealth Health Care Card.

“There' is a view folk strongly have that they have been taxed all their lives and that it is simply unfair that they don’t have access to the card.”

“I don't dispute that people go to their accountants and try and accommodate access, in entirely legitimate ways which they are entitled to provided it is legal. But in terms of large volumes of cash being hidden under the mattress, I find it difficult to accept.”

Finance minister Penny Wong said she had not been looking under pensioners’ beds lately, but that people were “required to declare their assets and their income in order to access the pension”.

In the six months to December only 44 people aged over sixty were convicted of social security fraud out of a total of 826.

Mr Mair has told the Bank he believes it is conflicted in dealing with Australia’s unusually large supplies of currency by the $1.5 billion plus annual profit it makes issuing currency. He will raise the question at the financial system inquiry promised by the Coalition after the election.

In today's Canberra Times, Sydney Morning Herald and Age

Related Posts

. The grey economy. Might pensioners have those $100 notes?

. Why do we have so many $100 notes?

. OUR CURIOUS STASH: We're loaded with cash. Except that most of us aren't.