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Government Pension Tax


Yin & Yang
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So the liability for the government pension lies with all of us, and we all know that due to the sheer numbers of government staff either working or on the pension this wouldn't ever be seen to actually be taken into account! 

 

How about making a tax on the government pensions to cover part the cost of the pensions. 

 

I'm not talking about the nurses, Dr's, police or firemen (as I class these as essential government services), but anyone else who is in receipt of a government pension above say £15,000 (a guideline)  and has the nhi pension should have an extra tax on their income.

 

Obviously we cannot afford to pay for these pensions, so why not tax them* as that's an easy way to make the deficit less

 

*I'm not saying that front line services, for example health care workers or the pot hole fillers pay the extra (they're just as productive to our island). I'm saying that anyone who receives a pension above a certain amount should pay an extra tax. 

Edited by Yin & Yang
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This amounts to a similar result as capping and I've suggested it here before at £25k pa. With the state pension, nobody needs more than that after a life of very well paid employment. Lump sums capped at £100k too at the very most. This might be more practical to introduce than a tax specific to one section of the population.

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I get that but most of the people receiving this income haven't paid a penny into it. 

That's my bugbear! 

I have no problem with the people who actually do the hands on work, just the rest who seem to come out with HUGE pensions, then leave the island. 

So another thing would be to tax at 50% if you no longer live on the island for over nine months of the year. 

And seeing that the MUA gave up details about a lone parent who was scamming the system (£13k overpayment), it wouldn't be hard to keep a close eye on anyone trying to scam the pension tax. 

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Might not be as simple as you think Y&Y.

I was talking to an acquaintance only yesterday who retires on Tuesday after 38 years as an NHS dentist. He resisted the temptation to go private when Thatcher started to reduce his income in the early 80s and the consequential income disparity for the next 35 was softened by the promised defined benefits pension.

He has contributed to his pension for these 38 years so should he and his ilk pay this extra tax?

Has anyone any data (as opposed to hearsay) on the percentage of workers who pay nothing in? Every public sector worker I know has always contributed.

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So another thing would be to tax at 50% if you no longer live on the island for over nine months of the year. 

Haven't non-residents already lost their personal allowance? What exactly have such workers done wrong to suffer your projected more than double tax? 

The only fair way to sort this going forward is to hike the contributions even more than has recently been done. That could affect recruitment especially when other jurisdictions don't do this and have a much lower tax regime anyway. Have you seen how many unfilled job vacancies there are in our NHS and education service at the moment?

Edited by ballaughbiker
add education service
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They are entitled to their pensions as they paid in all their working life, as part of their terms of employment-pensions are in effect defered wages and no one has the right to take them away. The problem arose due to past gov policy allowing such low contribution rates when it was obvious to the private sector that contribution rates had to rise. The gov position was to top up the shortfall from revenue and they will have to carry on doing so, while the rest of us fund it via higher taxes etc.

In a private scheme pensions are not set in stone, you would recieve a %age of your pension if the fund did not have enough money, the gov does  not have enough money so it will have to tax us to fund it. 

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1 minute ago, JOE450 said:

They are entitled to their pensions as they paid in all their working life, as part of their terms of employment-pensions are in effect defered wages and no one has the right to take them away. The problem arose due to past gov policy allowing such low contribution rates when it was obvious to the private sector that contribution rates had to rise. The gov position was to top up the shortfall from revenue and they will have to carry on doing so, while the rest of us fund it via higher taxes etc.

In a private scheme pensions are not set in stone, you would recieve a %age of your pension if the fund did not have enough money, the gov does  not have enough money so it will have to tax us to fund it. 

a pension is a investment with no guarantee.....

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...except, it seems, if it is a Government employees pension.

I know civil servants who have been well paid all their lives. They have paid off mortgages and seen their children through university, built home extension etc. Now they retire and they simply do not know what to do with all the money that pours in each month. There's only so many holidays you can go on, boats and toys you can buy etc. 

The scheme is obscene and the payments need to be rationalised. If that means keeping the agreement to pay that pension but introducing a tax to offset it, then so be it. But it will never happen happen. Human nature these days dictates that greed and self-interest are on an increasing sliding scale with wealth.

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Rather than tackle that problem Gettafa, it seems they prefer the softer option of taxing the rest of us to death. Seems they can do that at the drop of a hat.

Changing state pensions - not a problem sir, Tackle the problem of government employees pension - sorry sir, no can do

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Every time this is discussed the stories of massive payouts seem to be taken as the norm. People without such pensions get understandably cross because the evidence of what the pensioners are actually paid and what they have contributed both professionally and monetarily is unknown. It is human nature to then assume the worst and apply the worst to anyone in public sector employment.

There is no doubt that these schemes have been underfunded and it is entirely possible that the contributions have been spent on other things but neither is the pensioners fault.

The idea of a government worker being paid a fortune for doing very little and then getting a huge pension in retirement abounds yet those that I personally know who have been public sector workers really would not recognise this story on any level. So....

How are the perceived excesses actually verified and controlled without making recruitment of key workers even more difficult?

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I understand the average pension from the CS scheme is not that high, but we hear of the bigger ones- regardless through these benefits either high or low have been earned via very low contributions over too many years. It is only now that employees are putting in 10 to 15% to give the fund a bit of breathing space. 

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14 minutes ago, JOE450 said:

I understand the average pension from the CS scheme is not that high, but we hear of the bigger ones- regardless through these benefits either high or low have been earned via very low contributions over too many years. It is only now that employees are putting in 10 to 15% to give the fund a bit of breathing space. 

True, but there is no fund!

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2 hours ago, woody2 said:

a pension is a investment with no guarantee.....

Over here the Pension Protection Fund provides for those in defined pension schemes though there are some relatively minor conditions to be met.  Just sayin'.

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