In Mid 2010, the Minister for Families, Housing, Community Services and Indigenous Affairs, Jenny Macklin, announced that where the feed-in tariffs from solar panels are made as a direct payment, for example by cheque or by direct deposit, they are assessed as income when calculating the pension. Feed-in tariff amounts paid as cash payments would need to be reported to Centrelink when received and would be assessed as income for the following 12 months. For example, if a pensioner received a cheque from their electricty company for $260 it would be counted as $10 income per fortnight for 26 fortnights. This would result in a pensioner on less than a full pension, i.e. a part-pensioner, having their fortnightly pension payment reduced by $5 every fortnight for 26 fortnights, an annual reduction of $130, an effective 50% tax. In this same period the Australian Tax Office ruled that small household size solar installations would not be considered as installed for generating income and therefore would not be taxed. It should be noted that anyone earning income from any source other than from a pension paid by Centrelink will receive tax-free the full amount of any monies paid by their electricity company for solar power exported to the grid. Jenny Macklin's ruling is at variance with the ATO ruling, resulting in the Minister and the Labor Government clearly discriminating against pensioners. On a personal note, my wife and I, aged 83 and 80yrs, after installing solar panels under the Government rebate scheme decided that we would increase the size of our installation using our savings. This decision was taken after taking account of the Government's advertising campaign asking everyone to reduce their carbon footprint but before we were aware of the Minister's intentions to effectively tax any income we might derive from our solar installation. If we had been aware of the Minister's intentions we would not have made this investment. We are sure that this ruling will have deterred many pensioners from making an investment in solar power and we now have a situation where the Minister responsible for the environment is pleading for people to install solar power and we have Jenny Macklin making a ruling which deters people from installing solar power. We have tried throughout 2011 to get the ruling changed but have had no success so in 2012 we will be presenting a petition to the House of Representatives requesting the ruling be reversed. The petition can be seen HERE and we would ask that anyone who feels that this ruling should be reversed please follow the instructions HERE . |