Business in Australia?

Question

My cousin lives in Australia. H ewants to know if he starts a business there and pay taxes regularly, will he be elligile for pension in old age even if his business is good? Or is the pension only for people who have no income?

Answer 1

The government funded old age pension is means tested (ie you only get it if you don't have much wealth).



However we have superannuation for everyone else. This is a much better option for your cousin. There are some very good tax breaks for people to contribute to their superannuation funds.



I would suggest your cousin should chat with a financial advisor about his retirement options.

Answer 2

Pension is for everyone who has work . When you work in Australia, employees must contribute 9% of their total income to their superranuation, which becomes the source of their pension at retirement.



I'm not clear on the rules when you are the owner of the business, but he should setup a superannuation fund and contribute it regularly, ideally more than that of 10% his earnings. Pensions are considered worthless during the affordability crisis here in Australia.