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Open access peer-reviewed chapter

The Age Pension Means Tests: Contorting Australian Retirement

By Anthony Asher and John De Ravin

Submitted: December 11th 2019Reviewed: February 21st 2020Published: April 8th 2020

DOI: 10.5772/intechopen.91856

Downloaded: 365

Most Australian retirees are likely to be subject to the Age Pension assets or income test at some point. Evidence is that many retirees adapt their consumption to increase Age Pension entitlements, but long-term implications are difficult to determine—even if the current rules were to remain in place. This chapter evaluates the current approach to means testing against the principles set out in a Department of Social Services discussion paper on this topic. We evaluate the implied “effective marginal tax rates” (EMTRs) on the assets of part pensioners who are subject to the assets test. We find that depending on a variety of parameters such as assumed future earnings rates, demographic status, drawdown strategy and the base level of assets held, the EMTRs are high enough to explain material distortions to savings decisions of those still in employment, and the spending and investment decisions of retirees. Optimal decisions in this context require contorted retirement strategies that do not appear to be in anyone’s interest. Some possible remedies are suggested, which should include incorporating the value of the principal residence within the assets test. The chapter therefore illustrates the application of principled analysis to policy issues of this sort.

  • assets test
  • effective marginal tax rate
  • Age Pension
  • taper rate
  • equity

1. Introduction

This chapter evaluates the means tests that apply in Australia against alternative principles that can be applied to evaluate the integration between the first and second pillars of a retirement income system. Central to the analysis are the Effective Marginal Tax Rates (EMTRs) that apply to the first pillar when subject to the means tests.

2. The Age Pension and means tests

The Australian retirement income system consists of two main pillars: the means tested Age Pension (AP) and Superannuation [1]. The first pillar is a welfare benefit that is means tested and funded from general government revenue. The superannuation system consists mainly of privately administered funds in which members have investment accounts into which mandated contributions are paid. Members are able to take tax free lump sums from the age of 60, but many choose to withdraw “account-based pensions”, which allow members to vary the amount drawn—subject to a regulated minimum proportion of their accounts. A third pillar consists of voluntary savings including the home.

There are currently two separate components of the means tests, the income test and the assets test, and homeowners are treated differently from non-homeowners. The means test rules are Byzantine in their complexity and change frequently—sometimes with considerable effects on some groups of pensioners. The following description omits many details on the grounds of immateriality.

2.1 The Age Pension

The AP dates back to the formation of Australia with Federation in 1909, the amounts being shown in Figure 1. It has increased roughly in line with average wages, with a particular boost under the Whitlam government of the early seventies. Relative to minimum wages, it has approximately doubled over the past century, which means that pensioners are better off relative to workers on lower incomes. This shift has partly been a response to old age poverty, but may also reflect the relative political influence of these two groups.

Figure 1.

History of AP and means tests—couples.

2.2 The means tests

Figure 1 also traces the development of the income and asset test free limits over the century. The two tests were merged between 1961 and 1985. Before 1969, pensions were not payable to those over the means test free limits, although between 1953 and 1971 assets were converted into income at a rate of 10%. From 1969, taper rates (the rate at which the AP is reduced as a proportion of the relevant means) of 50% have applied on income except for a period from 2000 to 2009 when they were reduced to 40%. The taper rate on the asset test seems to have been set at 7.8% except from 2007 to 2016 where it was only 3.9%.

2.3 Description of current means tests

The current AP for a married couple owning their own home is slightly in excess of $36,000 per annum, reduced by the greater of 50% of income over $7800 p.a. or by 7.8% of assets over a threshold of $394,500. Single pensions are a relatively generous 66% of those paid to a couple.

Those who are renting qualify for rental assistance of $3588 for singles but—strangely—only $3380 if a couple. The asset test limits for non-homeowners are also some $200,000 higher than for homeowners.

The Australian means tests appear to be particularly complex and Australian pensioners on a wider range of incomes and with a wider range of assets are affected by the taper rates under the means tests than pensioner residents of other countries [2].

The Department of Social Services (DSS) explains and justifies the means tests thus: “The means test functions to assess a person’s overall capacity for self-support and target social security expenditure according to need. … Means testing also provides incentives for self-provision in the form of participation and saving. The means test balances these objectives by the use of income and assets free areas and the tapered withdrawal of payment as a person’s assessable income and assets increase” [3].

2.4 Evaluation criteria

The DSS discussion paper [3] also lists the criteria against which the current means testing system should be judged. Those principles need to encompass the treatment of a variety of types of asset (especially annuity and deferred annuity products) as well as financial and other investments and physical assets.

  • “Neutrality—the means test assessment of investments should not advantage a particular type of product or provide an incentive for people to invest in a particular asset …

  • Equity—the rules should treat people with similar means in a consistent way (horizontal equity) and those who have a greater capacity to self-provide for their retirement should receive lower income support (vertical equity).

  • Resilience—the rules should be able to apply to a range of products, including new products, without diminishing neutrality and equity …

  • Integrity—the rules should ensure the social security system remains targeted to assisting those people who need support and that people cannot maximise their Age Pension by engaging in strategies that minimise the extent to which their own income or assets are counted in means test assessments.

  • Fiscal sustainability—the means test treatment of new retirement income stream products should have regard to the cost of the social security system.

  • Simplicity—the rules should be easy to understand for income support recipients, financial advisors and income stream providers. Complicated rules can result in people making poor financial decisions. Simple rules support people to make good decisions.”

We have no argument with these principles. This chapter, however, argues that the asset test is especially inequitable to the cautious who retain assets for precautionary purposes; makes planning extremely complex; and significantly distorts the investment and drawdown behaviour of many retirees. It therefore fails all the policy principles except possibly that of fiscal sustainability. There are alternative approaches that could better meet these principles including fiscal sustainability.

3. Housing

While not the main point of this chapter, the difference in treatment between home-owners and renters is egregiously inequitable, and needs to be discussed first as it would not be complex to address, and the adjustment could be performed in a manner which would be revenue-neutral.

3.1 Poorer renters

The pressing issue is the dire position of those who neither own their own home nor have access to social housing. Given that only 10% (or about 200,000) of such properties had rents of less than $10,000 annually in 2011 [4], rent assistance of $3588 p.a. places considerable financial stress on those non-homeowners with limited other resources, many of whom are reduced to poverty or homelessness. Unpublished data from the Australian Department of Social Services shows 32,000 homes, where people are aged 65 and above and receiving rent assistance, are paying unaffordable rents in NSW [5]. It is a 50% rise in the past five years and includes 9000 people, 65 and over, who are paying more than half their income on rent.

Given that there are some 1.2 million people over 65 in NSW, this implies that about 2.5% of the aged population face the problem—90,000 country-wide. We make no detailed calculations as to precisely what would be fair, but suggest that the amount should be more or less doubled. While $6000 p.a. is not enough to fully cover rent, homeowners do face significant costs that would have to be considered in detailed modelling. Doubling rent assistance to pensioners not in social housing would cost less than $200 m, which is close to 0.25% of the cost of support to the aged.

3.2 Richer homeowners

At the other end of the financial spectrum, the exemption of the home from the asset tests means that there may well be as many pensioners receiving the AP while living in multi-million dollar houses. Particularly given that dwellings and land represent over 50% of the household balance sheet, an exemption seems myopic and distorts financial planning, spending, investment and the price of housing [6, 7]. The DSS discussion paper justifies it so:

“The exemption of the principal residence from the assets test recognises the greater financial security that pensioners have if they live in their own home and importance placed on the family home in Australian society.”

While these assertions are clearly true, the rational conclusion would be to include homes in the assets test rather than exclude them precisely for these reasons. Home ownership does provide financial security so those who rent need to be given more, while those who obviously have secure lodgings need less social support. The “importance placed on the family home” emphasises this. For many, however, the “family home” has three empty bedrooms and is crumbling around the surviving parent, who is increasingly unable to manage the activities of daily living, let alone maintain the house. But the homeowner is not willing to downsize to a less expensive and more manageable property, sometimes for psychological reasons but often also because of the negative impact on their main source of income, the AP.

Each of the criteria mentioned in Section 2.4, except perhaps simplicity, demand the inclusion of the principal residence. The arguments against ignore the disadvantages faced by renters. Homes provide an imputable rent and the AP should be adjusted if pensioners decide to spend more on it.

The need to include the value of the house in the asset test has been recommended by almost all who have considered the question. There have been eight different recommendations in as many years: the Harmer Pension Review, the Henry Review, a Grattan Report, three Productivity Commission reports, Rice-Warner and the National Commission of Audit [8]. It seems overwhelmingly clear that affordability issues should be addressed by including the value of the home.

3.3 The right to housing security and fungibility

There are two reasons to distinguish one source of wealth from another. The first is the basic human right of housing security; the second is fungibility. These two can explain much of the visceral response of some people when suggestions are made to include the home in the means tests. The right to housing has a simple logic: if people do not have their own place, they must occupy someone else’s. This right must include some security of tenure to be meaningful, and without some security and protections for both renters and owners the incentive to care for and improve the place is absent. Addressing the lack of security enjoyed by renters is the subject of another debate. Those interested in some of the theoretical and political controversies might like to refer to Hayward [9].

The problem of fungibility is that the home cannot easily be turned into income. Conventional reverse mortgages are relatively expensive and, given the normal operation of compound interest, may lead to significant reductions in the net residual value of the home which might constrain future choices if the borrower wishes to move into other accommodation. There is also a government scheme (the “Pension Loans Scheme”) that lends the AP shortfall to part pensioners. The interest rates charged are a little lower than commercial reverse mortgages but more restrictions apply to eligibility and the manner of drawdown of funds.

If the value of the home is to be included in the means tests, then the lack of fungibility means that some pensioners at least will be worse off. Johnson and colleagues [8] refer to a growing consensus for effective instruments to address the issue of fungibility, and refers to some commercial schemes including those that share capital appreciation.

Careful consideration would need to be devoted to transitional arrangements so that inclusion of the home (or the excess of the value of the home above some threshold value) does not bear unreasonably harshly on those pensioners who have already retired, in the expectation that the current means testing rules will continue to apply (perhaps with slight adjustment to parameters) throughout their retirements.

4. Integrating the superannuation and AP systems

The key issue addressed by this chapter is the way by which the AP is reduced by financial assets—including those in superannuation funds. As will become clear in this section, the issue is not simply the “taper rate” (the rate at which the AP is reduced in relation to assets held above the assets test threshold), because the long-term effects are very different for different approaches to the drawdown of the superannuation balance.

We take it as given that the objective of the superannuation system is to provide for consumption in retirement, and that the AP supplements this for those who do not have the means to support themselves. One important consequence of this is that superannuation benefits are to be seen as a mechanism for supporting the lifestyle of retired Australians, not as a mechanism by which the real capital value of a pensioner’s estate is maintained or grown, to be passed to non-dependents. The current dominance of account-based pensions does not achieve this result, and we could argue that the pooling of longevity risk should be encouraged by the means tests. This is however not the main thrust of this chapter, which is the unfairness and distortions created by the asset test.

4.1 Concept of effective marginal tax rates (EMTRs)

In each case, we consider the marginal losses to AP entitlements that arise from having assets over the thresholds. We refer to these as EMTRs. Legally, the tapers in the AP are not “taxes”, but given that money is fungible, the loss of social security entitlements caused by having additional assets is effectively the same as a tax.

4.2 Those who do not draw down

Figure 2 illustrates EMTRs for those who retain their assets and spend their income. It applies at any one time, and would apply over a lifetime to a single person and show the results of earning a real rate of interest of 3% and another earning 5%. The assets test creates a trough in income between about $300,000 and $700,000 in assessable assets. Within the assets testing range where the assets test produces a lower AP entitlement than the income test, annual income declines with increasing assets because the income from the marginal assets (whether returning 3% p.a. or 5% p.a.) is less than the AP foregone, which is 7.8% p.a. The calculations do not consider any investment volatility.

Figure 2.

The asset trough for those who retain assets.

4.3 Definition of “lifetime EMTRs” and approach to calculation

A more complete picture may be obtained by considering the impact of holding additional assets over the course of a retiree’s lifetime. We do this for a variety of asset levels and drawdown strategies. We also vary the following:

  • Assumed future real rates of investment return on assets

  • Drawdown strategy adopted

  • Demographic status (single male/single female/couple)

  • Initial level of assets held

For purpose of our calculations it may be helpful to define “lifetime EMTR” as follows:

where $X is the base level of assets held when the pensioner first becomes eligible for AP; $δ is an incremental amount of assets in addition to $X hypothetically held when the pensioner first becomes eligible for AP; DS refers to a specified Drawdown Strategy; PV (AP; $X; DS) is the present value of AP received over the lifetime of the single of couple pensioner assuming initial assets of $X and that the pensioner follows drawdown strategy DS.

In other words, the lifetime EMTR is the present value of the future loss of AP due to holding additional assets $δ at age pension eligibility age, as a percentage of those additional assets. A lifetime EMTR of zero means that the pensioner has incurred no loss of AP as a result of holding an additional $δ of assets, while a lifetime EMTR of 100% would mean that the pensioner has effectively received no net value from the additional $δ of assets.

For some of the results in this chapter (especially in Section 5.1 below) we have taken $X to be the lower assets testing threshold and $δ to be the width of the asset testing range (i.e. from the threshold to the level of assets where the AP is zero). The EMTR is therefore the impact of holding additional assets equal to the width of the asset testing range, relative to holding assets of an amount equal to the lower assets test threshold. We have also performed a set of calculations for smaller tranches of incremental assets, for drawdown strategies in the following specific forms:

  1. Asset drawdown each year is the regulated minimum required as a proportion of the beginning of year assets. We have also calculated EMTRs for annual consumption expenditure from 1% to 5% higher than the minimum—in 1% increments.

  2. Asset drawdown each year is a fixed percentage of the beginning of year assets. The fixed percentages for which we evaluated EMTRs were varied from 5% to 15% in multiples of 2.5%.

The asset testing range for a single pensioner is approximately $300,000 in total width (from $253,750 to approximately $552,000). We have taken $δ for single pensioner calculations to be $100,000, and have therefore calculated three separate EMTRs for the asset testing range. Similarly, the asset testing range for pensioner couples is very nearly $450,000 in total width and we have taken $δ for calculations involving couples to be $150,000.

In total we have done six computations of EMTRs for each drawdown strategy, demographic status and rate of real investment return considered, reflecting marginal lifetime losses of AP from holding an additional $100,000 of assets (for singles, and $150,000 for couples) at the date of becoming eligible for the AP. Three of the calculated EMTRs apply within the asset testing range and three to assets in excess of the asset testing range but where the additional assets held will result in the loss of AP not immediately, but after a period of time when the assets are depleted to an amount within the asset testing range.

Table 1 shows the parameters for each of the six sets of calculations.

Table 1.

Asset ranges.

The results of these detailed EMTR evaluations are reported in Section 5.2 below.

4.4 Assumptions

Table 2 summarises the assumed AP parameters that we have used for the purposes of the detailed calculations in this chapter. (The parameters in Table 2 were those that applied between September 2017 and March 2018; however we note that most of the parameters below change only gradually over time, due to indexation).

Table 2.

AP projection assumptions.

Also implicitly we have assumed, by using a real rate of investment return (where by “real” we mean relative to average weekly ordinary time earnings—AWE) that future rates of AP payment will be indexed to AWE and also that future lower and upper thresholds for the assets test and income test will also be indexed to AWE. Current practice is for AP payment amounts to be indexed normally to AWE but threshold amounts are indexed to CPI; nevertheless for simplicity of calculation, both payment amounts and thresholds have been assumed to be indexed to AWE. If we had used CPI, the EMTRs reported would still apply, but at slightly different levels of assets.

5. Results

The results below show first the extent to which alternative strategies can contribute to significantly higher AP benefits over a lifetime. Then, in Section 5.2, we show the EMTRs that apply to retirees subject to different circumstances when they use the alternative strategies.

5.1 Annual income and division of benefits

Figure 3 shows the lifetime effects (until age 109) of the various strategies for a single pensioner. We have assumed assets exactly equal to the top of the asset test level, which produces the largest impact—for illustration purposes.

Figure 3.

Alternative retirement consumption patterns.

The first strategy is for the pensioner to draw down the minimum permitted by superannuation regulations. Her spending is shown as the unbroken Minimum drawdown line in Figure 3. This is the strategy we understand is adopted by approximately half of pensioners, more than any other strategy [10]. Its presence in regulations as a minimum gives it an implicit authority and we have taken it as an effective benchmark. Her spending pattern is however totally inappropriate—starting at $28,000 p.a. at 67 and rising to $48,000 at 85 before declining again. We have also calculated the actuarial present value of the benefits to the member, her dependents and as a reduction in AP. The value of her assets at the beginning of retirement is shared into roughly equal thirds: one to herself, one to her heirs, and one in fiscal savings. That means tests are structured to permit the heirs to inherit a third of the superannuation benefit represents a lack of targeting of superannuation and the means tests.

A second strategy is to give away enough of her assets to escape the asset test altogether, which the regulations require her to do before 62—five years before becoming entitled to the pension. She then draws down at the minimum rate. This dashed line shows somewhat bizarrely that, at 67, her income is $6000 p.a. (20%) higher than if she had not given the money away. This amount falls slightly after her mid-eighties, but it is reasonable level and appropriate. Her share of the benefits drops only slightly to 29%, because the savings to the fiscus is minimal, with its proportion dropping to 2% (via deemed income caught by the income test). The heirs’ share more than doubles to 69%—$260,000 of which they receive before the pensioner reaches the age of 62. This is by far the most fiscally efficient for the pensioner and family. Rather than be given away, the money could be invested in her residence or spent before the pension age. The alternatives, singly or in combination, would allow the pensioner to directly enjoy 98% of her savings.

A third alternative is for the pensioner to spend the money after retirement in order to maintain the “comfortable lifestyle” determined by the Association of Superannuation Funds of Australia (ASFA) [11] until she falls below the asset test threshold, after which she reverts to the minimum. The income is shown in the Comfortable line in Figure 3. She enjoys a 50% higher standard of living than the benchmark, and remains above it until her early eighties. Her share of her savings rises to a little over 50%, with her heirs and fiscal savings sharing the balance.

A final alternative therefore is a level lifetime annuity. The total income and the amount provided by the annuity plus Age Pension are shown by the dotted and dashed lines. The present value is shared 70% to the pensioner and the balance to the fiscus.

5.2 Analysis of EMTRs for small tranches of incremental assets

In addition to the broad calculations of EMTRs referred to in Section 5.1 above, we have computed EMTRs for smaller values of δ ($100,000 for singles and $150,000 for couples). The objective of these calculations was to gain additional insight into the extent to which asset-testing rules impacted EMTRs as a function of base asset levels, investment returns and drawdown strategy combinations.

For these more granular calculations a slightly different approach was taken to mortality assumptions than in the calculations underlying Appendix 1 and Section 5.1. In particular it was assumed that a single female would receive AP for 25 years and a single male would receive AP for 22 years. These durations are slightly higher than the life expectancies for a 65-year-old according to Australian Life Tables (ALT) 2010–2012, which are 22.05 and 19.22 years for females and males respectively. Ongoing improvement to mortality means that current age-specific mortality in Australia is lower than mortality rates that applied during the 2010–2012 triennium and is likely to continue to decline in future.

For couples, it was assumed that the couple rate of pension would be payable for 22 years and the single rate for a further 5 years. This is because the expected age at death of the last to die from a couple is greater than the expected age at death of either considered separately.

The drawdown strategies allowed for are those detailed in Section 4.3 above.

Figure 4 shows EMTRs for a single pensioner using the minimum drawdown strategy we use as a benchmark.

Figure 4.

EMTRs based on drawing down the regulated minimum—single pensioners.

The curves show the EMTR of a marginal additional of $100,000 of assets at the eligibility age for the AP, valued over the lifetime of the pensioner. We note from Figure 4 that female EMTRs are slightly higher than the corresponding male EMTRs, due to the longer life expectancy of females. This means that they have more time to lose AP to the means tests.

The effect of different investment earnings is significantly greater than those for the two genders. For example, the 5% real interest curves fall away more steeply for base asset level of $553,000 or more (that is, at or above the upper assets test threshold). This occurs because the 5% real interest rate will tend to mean that, if assets are at or above the upper asset test threshold when the pensioner attains eligibility age, then the value of assets will remain above the upper threshold over the entire lifetime, and no further AP is foregone. However if assets are within the asset testing range at AP eligibility age, they will remain between the thresholds for longer so increasing the loss of AP. At lower rates of real interest, the asset values are depleted more quickly over time with the result that less AP is lost at lower starting balances. Assets over the upper threshold depreciate faster, so more is lost from an incremental $100,000.

Finally, the most significant observation is just how high the EMTRs are, throughout the asset testing range (especially in the middle and upper thirds of the asset testing range). Top marginal income tax rates in Australia are currently only 47%, so any EMTR in excess of this appears unfair and provides an incentive to adopt means test avoidance strategies. EMTRs in the range of 80%, 90%, 100%, or even higher represent a very powerful incentive to:

  • Give money away 5 years prior to attaining eligibility age;

  • Spend down rapidly in the first few years on pension;

  • Spend money on house renovations, or even purchase a more expensive property; or finally,

  • Not save in the first place. This can involve higher borrowing at younger ages to be repaid by superannuation lump sums, or retire early and draw them down before qualifying for the AP.

All of these are obviously distortions to the economic decisions that the pre-retiree would otherwise have made. Those who adopt such strategies will also be an increased burden on the public purse.

6. Evaluation

While the results will vary significantly depending on the underlying assumptions, one can draw three conclusions from these calculations:

  1. Pensioners are penalised, and greater fiscal savings accrue, the longer pensioners retain their asset-testable assets.

  2. The penalties can be reduced by giving money directly to heirs, by spending the money faster, and especially by investing in the family home. These actions are therefore incentivised.

  3. There are very significant gains that can be made by adopting different drawdown strategies. Determining an optimal strategy is however complex for pensioners, made more difficult by ongoing changes in the means test rules. Forecasting is also difficult for government as pensioners change their strategies in response to the incentives.

6.1 Evaluation against the criteria

We now consider whether the system meets the criteria set by the DSS.

6.1.1 Neutrality

The current structure of the asset test is not neutral when the rules are applied over a lifetime. Annuities do enjoy relatively favourable treatment relative to applying the minimum drawdown to an account-based pension, but the latter allows for flexibility that can be used to manipulate the rules to the point of avoiding the asset test entirely.

6.1.2 Equity

The current system creates significant inequities.

  • Horizontal inequity arises for people with the same level of wealth (which is at one level fungible). Non-homeowners with $1 million in assets will get no AP, while homeowners with a house of that value will draw the whole AP.

  • Vertical inequity arises when the differences in treatment applied to people are not proportional to the differences in their characteristics. The dramatically higher taper applied by the asset test does not seem proportionate, neither does the failure to differentiate between those with valuable houses and those with small apartments.

  • The asset test fails to provide vertical equity for those with different life expectancies. Most important is that they penalise younger retirees at the expense of older ones. A couple of 67 with $1 million in assets, which could generate investment income of about $50,000 p.a., cannot afford the ASFA comfortable retirement standard. A couple of 90 in the same position could afford to spend $100,000 p.a., well above the comfortable level.

  • Women also need more than men to maintain the same spending given their greater expected longevity. Arguably the assets tests are discriminatory as they advantage men (who require less) than women.

  • Regional differences in rent and the cost of living also create vertical inequities, although in this case people do have the ability to move to less expensive areas.

  • Those who can obtain appropriate advice and are able to act on the advice can avoid the worst consequences of the tests. Their complexity however makes it very difficult to make the right decisions. This means that the costs are borne by the less well informed, the cautious, and possibly by those who regard it as anti-social or degrading to be supported by welfare.

6.1.3 Integrity

The current system completely fails the integrity test as defined by the DSS, quoted in Section 2.4 above. There is a clear failure to adequately address some of the most indigent whose rental costs leave little else to live on. It also fails to limit access to the AP by pensioners with significant housing assets.

It is also far too easy for retirees to adopt a range of strategies that mean that they will obtain a much greater share of the AP than those who are not so well advised or who do not wish to pursue the strategies we identified.

6.1.4 Resilience and fiscal sustainability

The desired level of fiscal expenditures could be maintained by incorporating the principal residence into the assets test and adapting the quantum of the AP and the parameters governing the means tests. In times of fiscal constraints, all Australians should expect to bear some of the burden and pensioners as much as anyone should expect smallish reductions in their standard of living at times. Transitional arrangements should apply for some limited period to mitigate the impact of the changes on those most adversely affected by the changes.

6.1.5 Simplicity

Benefits cannot be targeted precisely at those that need them. Needs are complex and fluctuating; evaluation methods inevitably somewhat simplistic, limited to a particular time and prone to error. Bradshaw and Finch [12] looked at three different approaches to measuring poverty; “lacking socially perceived necessities; being subjectively poor and having a relatively low income… we have found that there is little overlap in the group of people defined as poor by these dimensions.”

The different levels of AP and associated supplements, and permutations of the means tests create an entirely spurious impression of targeting needs. The trivial nature of some of the supplements and concessions, such as the lower deeming rate for the income test, are not only wasteful of energy but bring the whole system into disrepute. This is particularly true when material differences such as housing are not taken into account.

Maeda [13] suggests that the three laws of simplification are reduce, organise and save time. Reduction and saving time are obvious. Organisation may not be. For instance, Schedule 7 of the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations), which has 7 categories for minimum drawdown amounts for different age bands, can be seen as more complex than Schedule 1A, which has 80 categories for each age from 20 to 100. This is because one cannot remember all 7 categories so that they both have to be looked up, but changing the factor each year is more intuitive and so easier to understand, to administer and creates a smoother cash flow.

The suggestions made below in Section 7, would not only be simpler, but more clearly meet the criteria that have been mentioned: neutrality, equity, integrity and resilience.

6.2 Perversity

Failure to meet these principles creates perverse outcomes. We have shown that there is a strong incentive to draw down quickly or move assets into the family home. It appears retirees do both. While only 19% of couple pensioners are subject to the asset test, rough calculations suggest that over a third of those over 65 should be in this category. An analysis of Centrelink data suggested that those pensioners subject to the asset test draw down their assets up to 10% faster [14].

7. Options for reform

We suggest the following remedies for the problems identified.

7.1 Revert to former asset test taper rate

One policy option would be to revert to the former 3.9% asset test taper rate that applied between 2007 and 2016. Such a solution would mitigate the extremely high EMTRs that currently apply especially in the upper parts of the asset testing range and therefore reduce the attractiveness of strategies designed to increase age pension entitlements.

If the taper rate were reverted to 3.9%, there would need to be changes in the upper and/or lower assets test thresholds. For example the thresholds could revert to something like the pre-2016 asset testing thresholds (but with indexation adjustments). However if the opportunity were taken to include the principal residence in the means tests, then the lower threshold should be increased markedly, by something like the value of a basic home.

7.2 Abolish the asset test and convert superannuation into an income stream

A simpler solution is to abolish the asset test, which so contorts the retirement system and the lives of most Australian pensioners. Assets should be converted into a lifetime income (for the couple and other dependents if relevant). This can be done by dividing annually the value of assets by the Pension Valuation Factors (PVFs) in Column 4 of Schedule 1A of the SIS Regulations for singles, and using higher PVFs for couples.

This would lead to higher AP costs in the short run, but there would be no increase in AP payments as people age and the thresholds could be calibrated for the change to be fiscally neutral.

The additional fiscal costs in the short term can also be covered by including the value of the principal residence at an imputed rent. Rent assistance would be payable to everyone, further simplifying the system. The net impact would be felt most by people with low financial assets and expensive houses. Assuming an annuity rate of 7.5% at age 65, a deeming rate of 4% and a doubling of rental assistance, Table 3 shows the annual gains and losses.

Table 3.

Potential gains and losses due to proposed changes.

Single renters of moderate means would be the main winners. There are however very few of them currently, but removing the incentive to hold onto a home might well increase numbers.

The main losers would be homeowners with minimal financial assets. Their loss of spending power could be addressed by an expanded Pension Loans Scheme. Under the existing scheme, part pensioners can be lent the difference between 150% of the full AP and the part AP for which they qualify. Centrelink would take ownership of a proportion of the value of the home that this represents. As the loss of pension is only 2% of the value of the house (under the second proposed scenario), they could borrow for many years before exhausting the value of the house. A “no negative equity” guarantee would have a trivial cost.

7.3 Personal responsibility and political games

The problems with the existing system are clear. It cannot be justified, but the dire state of much current political debate means that the problems remain running sores. There is a clear need for bi-partisan agreement not to resort to irrational sound bites. Such an agreement needs to include the major industry players and media commentators. Those who exploit the uncertainty that will naturally be felt by many pensioners need to be openly and quickly rebuked. The current awareness of the damage caused by manipulated outrage may offer an opportunity for sensible discussion.

At the very least, if change is to be made, politicians and commentators will need to be courageous and to make a stand for what it right rather than attempt to score points.

8. Conclusion

The means tests in their current format make it exceptionally difficult to plan for any pattern of spending in retirement—as the Age Pension increases with reductions in assets and income in a way that is difficult to understand and model over a retired lifetime. They also provide very strong incentives for pre-retirees to engage in a range of strategies to maximise their age pension. Apart from the unnecessary fiscal burden that such strategies impose on taxpayers, they also distort savings and consumption decisions and asset prices (especially of the principal residence) and cry out for change.

This chapter is an extension of [15], a public submission in response to the Department of Social Services discussion paper [3]. Quotations from the earlier paper are therefore not marked.

Conflict of interest

The authors declare no conflict of interest.

© 2020 The Author(s). Licensee IntechOpen. This chapter is distributed under the terms of the Creative Commons Attribution 3.0 License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

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Anthony Asher and John De Ravin (April 8th 2020). The Age Pension Means Tests: Contorting Australian Retirement, Who Wants to Retire and Who Can Afford to Retire?, Ingrid Muenstermann, IntechOpen, DOI: 10.5772/intechopen.91856. Available from:

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Renewable Energy Technology

Make Renewable Energy the Clear Choice

  • Technology is the key to effectively managing alternative energy sources and integrating them into the energy grid.

  • The two largest challenges facing the renewable energy market are decreasing operational costs and increasing productivity.

  • IoT technologies let utilities create a more stable grid that incorporates renewable energy.

Intel® technologies are enabling renewable energy solutions for businesses and home by improving access, manageability, and analytics.

Since the days of Thomas Edison, power has been available to almost anyone at the flick of a switch. For over a century that was made possible by fossil fuels. But the rising threat of climate change has spurred the development of alternative energy sources that are both endlessly renewable and nonpolluting. Now, companies, cities, countries, and entire regions are rushing to embrace renewable energy, the fastest-growing global energy source.

Over 100 cities around the world now get more than 70 percent of their electricity from renewable sources.1 The ambition isn’t limited to cities: over 150 companies are committed to work toward using only renewable power.2  Intel is high on that list: Intel® technologies are making it possible to convert and manage renewable sources and find new ways to integrate them into the modern energy grid. Using secure, connected IoT solutions that employ Intel® technology, electric utilities and cities are turning real-time data into clear visualizations.

Intel’s commitment to renewable energy is also demonstrated through its pledge to triple its on-site renewable projects by 2020. The result will be over 100 installations in 12 states and countries, drawing on over a dozen different energy generation technologies, from wind to fuel cells.

Renewable Energy Sources

Intel’s holistic view of pushing energy technology forward starts with knowing where computing power and intelligence can be most effective.  Intel® technologies in solar and wind power are already helping renewable energy providers raise output while bringing down costs.

Solar Energy
The technology to capture and convert the sun’s inexhaustible energy into electricity seems to be in a constant state of innovation. Solar panels themselves are continually becoming more efficient. Whether it’s a rooftop “solar skin” that is barely visible or solar-powered pavement that generates clean energy and powers its own streetlights, breakthroughs in photovoltaics (PV) are announced on a regular basis.

The combination of Intel® Falcon™ 8+ Drone and software optimized by Intel® Distribution of OpenVINO™ toolkit makes the routine inspection of solar energy farms both easier and safer, and make real-time analysis of data collected more efficient. The solar carport at Intel’s Folsom campus can generate enough power at peak capacity to meet over half of the campus’s energy usage, the equivalent of powering almost 1,000 homes.

Wind Energy
The booming wind power industry is seeing wind farms expand worldwide, both onshore and offshore. As the fastest growing alternative energy solution, and one that produces no pollution or emissions, wind power could one day supply a large part of the world’s electricity needs.

Wind farm operators use Intel® Falcon™ 8+ Drone to inspect wind turbine blades for damage, then run real-time data analytics and image processing using software optimized by Intel® Distribution of OpenVINO™ toolkit. Intel® technology is also being used to optimize the position of turbine guide-vanes as wind conditions change.

The power of moving water is the largest source of renewable energy in the world. The idea is simple: water stored in a reservoir flows through an intake in a dam, where it spins the turbine blades of a generator and produces electricity. If the topography is right, the system can also be used to store energy by pumping water to a higher reservoir where it can be released on demand to create electricity.

Geothermal Energy
The heat lingering deep within the earth can be tapped to create electricity or to heat or cool buildings directly. In places like Iceland, the heat from the earth is near the surface, and geothermal hot water is used to melt icy sidewalks and to warm swimming pools. In other places, deep wells tap into underground reservoirs of steam and hot water, which in turn drive generator turbines.

Biomass Energy
Material from once-living organisms can have a second life as a power source through biofuel technology. Biomass feedstocks such as plants, lumber mill scraps, and municipal solid waste are dried, compressed, and burned to create heat, or converted directly into energy through gasification. Biomass is the only alternative energy technology that can be converted into liquid biofuels such as biodiesel and ethanol.

Landfill Gas
Methane is one of the most potent greenhouse gases in the atmosphere, 25 times as strong a greenhouse gas as CO2.3 It also makes up roughly half of the gases produced by the decomposition of organic materials in landfills. Landfill gas generators take this steady flow of natural gas to produce clean energy through engines or turbines. As a bonus, they remove methane from the environment in the process.

Over 150 companies have also made a commitment to work toward the goal of using only renewable power. Intel® technologies are making it possible to convert and manage alternative energy sources and find new ways to integrate them into the modern energy grid.

Renewable Energy Storage

Solar and wind energy generation is inherently variable and intermittent, depending on changing weather conditions and time of day. Smart battery technology powered by Intel® architecture helps to ensure a steady power supply, storing excess power and releasing it when necessary.

Renewable Energy and the Power Grid

For a long time, the benefits of alternative energy were offset by the difficulty of integrating it into the grid, plus the fact that it couldn’t meet the cost and performance levels of conventional electricity sources. Now both solar and wind power have reached or exceeded parity in many places. The issue of variable supply is still a challenge, but the combination of economic and environmental benefits, plus continuously evolving technology, will make renewable energy a clear—and clean—solution.

A renewable energy grid is different from a traditional monolithic grid designed around large power stations. It’s modular, distributed, and driven by consumers who can generate electricity themselves. In this distributed energy model, customers can become producers by feeding excess electricity back into the grid—and in many states, receive credit on their electric bills.

Renewable Energy Solutions from Intel

Customers have the Internet of Things (IoT) to thank for recent strides in energy development. IoT needs integrated hardware and software to be successful. It also requires quick access to critical data, as well as secure data transfer through the cloud for further analysis. When this happens, IoT can offer more reliable, faster operations, and a better understanding of what customers need.

Intel® architecture-based IoT technology creates gateway controllers with advanced computing capacity, remote management options, and scalable performance. They’re sturdy enough to work in tough environments without sacrificing reliability. They can capture and transfer data on energy conversion, storage, and delivery so it can be analyzed in near-real time. Being able to predict energy usage patterns lets utilities maintain sufficient power supplies even during times of high fluctuation. This helps renewables operate at maximum capability, making them more competitive in the open market.

Real-time energy monitoring starts with controllers, which operate the disparate pieces of the smart grid from solar panels to batteries. Modern controllers have to be reliable and offer scalable performance and a range of communications options. They also need to be rugged, since they often have to operate consistently in harsh conditions like spinning wind turbines or scorching solar farms.

Intel® technology-based gateway controllers form a vital part of an extensive network of connected devices that make sure renewable energy from multiple sources is available where it’s needed most. Intel®-based Active Grid Management Architecture uses real-time monitoring and control hardware based on IoT technologies to improve situational awareness of grid performance. Utilities take advantage of IoT technologies to collect and analyze DER data from across the grid. The result is a more stable grid, lower operating costs, and utilities that can manage their energy capacity more effectively. Open AGM architecture is highly modular, scalable, and interoperable.

As an example, Axiomtek’s embedded gateway controllers, using software solutions–based Intel® architecture, helps utilities and energy companies collect, filter, and analyze data from the cloud to the edge, with the ultimate goal of optimizing smart grid manageability across both legacy and modern systems.

To accelerate the adoption of new technology, Intel is learning from customers and partnering with vendors to build a robust culture of ecosystem players. Intelligent systems and the powerful information they provide are a major step toward sustainability and energy independence. And as renewables become more cost-effective and reliable, they’ll be more available to communities, cities, and countries in the developing world.

For all of us, the more renewable energy is brought online now, the sunnier the future will be.

Notices and Disclaimers

Intel® technologies' features and benefits depend on system configuration and may require enabled hardware, software or service activation. Performance varies depending on system configuration. No product or component can be absolutely secure. Check with your system manufacturer or retailer or learn more at

Cost reduction scenarios described are intended as examples of how a given Intel®-based product, in the specified circumstances and configurations, may affect future costs and provide cost savings. Circumstances will vary. Intel does not guarantee any costs or cost reduction.ntel does not control or audit third-party data. You should review this content, consult other sources, and confirm whether referenced data are accurate.

© Intel Corporation. Intel, the Intel logo, and other Intel marks are trademarks of Intel Corporation or its subsidiaries. Other names and brands may be claimed as the property of others.

Product and Performance Information

1“More Than 100 Cities Worldwide Now Powered Primarily by Renewable Energy,” InsideClimate News, February 27, 2018,
2“6 Renewable Energy Trends To Watch In 2019,” 3BL Media, January 7, 2019,
3 “Building on Success: New Ways to Keep Methane Out of the Atmosphere,” The World Bank, July 17, 2015,

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InterExchange Commitment to Diversity, Equity, and Inclusion

3 minute read

A graphic defining diversity, equity, and inclusion

At InterExchange, we believe in authentic cultural diversity. The Spring 2020 protests for social justice across the U.S. have shown the world that Black Americans and people from other marginalized groups face a range of challenges. They have been historically overlooked, discriminated against, and disenfranchised by those in power. We want to do our part to change this, by fully committing to diversity, equity, and inclusion in our policies, programs, and as thought leaders in the cultural exchange community.

A graphic defining diversity, equity, and inclusion

To support these efforts, in June 2020 InterExchange organized and implemented a staff-led Diversity, Equity, and Inclusion (DEI) Committee. The committee provides a diverse group of staff with an opportunity to help guide and design the efforts of InterExchange as it fosters a more inclusive experience both internally, as well as for our participants, hosts, and partner organizations. Our goal is to amplify the voices of staff, participants and hosts from marginalized groups on topics related to our work in international cultural exchange, and to help guide our Leadership Team and their overall commitment to diversity, equity, and inclusion within the organization and in the field of cultural exchange. As we took initial steps towards this goal, we examined what diversity, equity, and inclusion mean in the context of our work environment.

What is Diversity?

The concept of diversity encompasses acceptance and respect. Diversity is the quality of being different or unique at the individual or group level. These differences can be along the dimensions of race, ethnicity, gender, sexual orientation, socio-economic status, age, physical abilities, religious beliefs, political beliefs, etc.

What is Equity?

Equity is the pledge of fair treatment, opportunity and advancement while striving to identify and eliminate barriers.

What is Inclusion?

Inclusion is an outcome to ensure that those that are from all backgrounds actually feel and are welcomed. Inclusion is the act of bringing together and harnessing differences in a way that is beneficial and creates a sense of belonging. (For a wonderful introduction to the concept of inclusion, check out this video.)

A graphic defining diversity, equity, and inclusion

Image courtesy of InterExchange

Along with implementing the DEI Committee, InterExchange became a member of Diversity Abroad and attended this year’s Diversity Abroad Conference, which included enriching discussions on DEI through the global cultural exchange lens. Diversity Abroad is the leading membership organization that inspires and supports educators, policymakers, industry professionals, and other stakeholders in leveraging global educational programs to support the academic success, interpersonal development, and career readiness of students from diverse and underrepresented backgrounds. All InterExchange staff will be given access to training modules and professional development opportunities through their platform.

We have already started examining our diversity as an organization using the Diversity Wheel diagram, produced and generously shared with us by the YMCA, representing the various dimensions of diversity. We wholeheartedly agree with the YMCA that, “to truly be inclusive and welcoming to all, it is critical to understand the many factors that make up and influence a person’s individuality. If we hold too narrow a view of what constitutes diversity, we will miss opportunities to effectively engage, connect, and serve all members of our communities.” At InterExchange, our DEI Committee will use and adapt these dimensions as a framework to create a more inclusive culture for our staff, participants, and hosts.

A graphic showing elements of diversity

Image courtesy of the YMCA

With these points in mind, and in joining together the principles of diversity, equity and inclusion, we have committed ourselves to four ‘A’s:

  • Awareness: Our first step should be to educate ourselves. In addition to internal reflection through the DEI Committee, InterExchange also recently became a member of Diversity Abroad in an effort to strengthen our commitment to growth and knowledge sharing.
  • Assessment: Through internal diversity and inclusion assessments we hope to gain more insight into our current demographics, what our weaknesses are as an organization, and how we can improve.
  • Action: We will reevaluate our recruitment and retention strategies to better incorporate DEI principles at all levels of our organization.
  • Accountability: Through continuous feedback from the InterExchange community, we hope to foster an environment of openness and engagement.

InterExchange is on a journey that begins internally with us as an organization. We want our current and future participants, as well as our alumni, to feel reassured that InterExchange is a place of learning, reflection, and growth.

DEI Committee

The Diversity, Equity, and Inclusion (DEI) Committee at InterExchange designs and implements programs, training, and education for our staff, participants, and hosts to foster inclusivity in the field of cultural exchange. We work to amplify the voices of staff from marginalized groups on topics related to our work and to guide our staff and Leadership in our overall commitment to diversity, equity, and inclusion within our organization.

Committee Chair: Machada Smith-McGovern

Learn about life abroad

Read about the adventures others have had and get excited for yours.

U.S. Department of State-Designated J-1 Visa Sponsor
Alliance for International Exchange
The International Coalition for Global Education and Exchange
European-American Chamber of Commerce New York
Global Ties U.S.
International Au Pair Association
WYSE Travel Confederation


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The Foundation for the Rights of Future Generations (FRFG) and the Intergenerational Foundation (IF) award the Demography Prize, which carries a total value of 10,000 Euros, divided up among winning entrants. The Prize, funded and supported by the Stiftung Apfelbaum (Apfelbaum Foundation), is awarded every two years.

The topic for the 5th Demography Prize is:

 “Low Electoral Turnout among Young People – Consequences and Remedies”

The deadline for submissions is 1 June 2015.

By means of this award, the FRFG and IF aim to open up a debate, based on sound academic research, about intergenerationally just politics and demographic change, and to encourage suggestions for potential future action. The invitation to enter is extended to young academics from all disciplines.

For a complete version of the original topic announcement, follow this link (IF). More Information can also be found here.


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Indexed - a fun, wacky blog

By Murray Bourne, 11 Jun 2007

Indexed has an interesting mathematical take on lots of topics. Think Venn Diagrams meets politics and daily life.

Image Source.

And don't miss: Exodus, Anyone?

Indexed is by Jessica Hagy, who says of her blog:

“This is a little project that allows me to make fun of some things and sense of others without resorting to doing actual math.”

It gets my vote for being clever and insightful.

Update: Indexed has a new home, where the fun continues:

See the 1 Comment below.

One Comment on “Indexed - a fun, wacky blog”

  1. Bill says:

    Thanks for the recommendation, Zac. Indexed is a great site!

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  1. Use simple calculator-like input in the following format (surround your math in backticks, or qq on tablet or phone):
    `a^2 = sqrt(b^2 + c^2)`
    (See more on ASCIIMath syntax); or
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Volume 3, Issue 1 - 3

We hope you enjoyed this essay.

Please support America's only magazine of the history of engineering and innovation, and the volunteers that sustain it with a donation to Invention & Technology.

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‘Star Wars: Bloodline’ Will Reveal Leia's Pre-'Force Awakens' Backstory

The newest Expanded Universe novel hints at the political turmoil that led to the new movie.

Back in April of 2014, Disney effectively did away with decades of the far reaching and overly complicated Star Wars Expanded Universe with a post on the official Star Wars website. They paid $4 billion and they figured they’d take a crack at the Expanded Universe on their own terms. Now a new novel called Star Wars: Bloodline will seek to fill in the gaps to show how Princess Leia became General Leia in the New Republic before the events of The Force Awakens.

Positioned as a follow up to the previous new Star Wars novel called Aftermath, the new novel will stress the Skywalker family. “This novel isn’t fundamentally about Leia as a wife, sister, or mom,” the novel’s author, Claudia Gray, told USA Today. “This is about the role she’s created for herself since the fall of the Empire, and the one she takes up by the time of The Force Awakens.”

USA Today also included an excerpt from Star Wars: Bloodline where Leia attends a seemingly mundane meeting that’s actually important to the galaxy’s future. The short excerpt, which you can read here, is just a hint of how the Resistance became a small faction that found itself fighting The First Order in director J.J. Abrams’ record breaking movie.

The cover art for 'Bloodline,' featuring the silhouette of Darth Vader looking in the background.Del-Rey

Here’s some of the more interesting passages:

“An entire generation has prospered during an era of peace. The New Republic, governed by the Galactic Senate on Hosnian Prime, has held power for more than two decades. Yet conflict has begun to take shape within the Senate. As political gridlock threatens to cripple the fledgling democracy, the quarrels of the New Republic will soon radiate throughout the galaxy. . .”
“The conference building of the New Republic senatorial complex contained multiple rooms appropriate for every kind of auxiliary function imaginable, from memorial concerts to awards ceremonies. Leia Organa and Tai-Lin Garr headed toward one of the smallest banquet rooms. The breakfast meeting had been organized by Varish Vicly, who couldn’t imagine a bad time for a party.”
“Leia settled into her chair, picked up her napkin — and stopped.”
“Something was written on the paper streamer on her plate. Actual writing. Virtually nobody wrote any longer; it had been years since Leia had seen actual words handwritten in ink on anything but historical documents.”
“But today, someone had left this message on her plate, only one word long: RUN.”

Run to check out Star Wars: Bloodline when it hits bookshelves May 3.

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Hunters Become the Hunted in Rooster Teeth 'Achievement Haunter' Exclusive

Smart-mouthed gamers from the internet are an unlikely group to venture out into the haunted wilds of America, but that’s exactly what’s happening in Rooster Teeth’s newest live-action reality series, Achievement Haunter.

A new paranormal/comedy series debuting October 31 on the streaming platform FIRST, Achievement Haunter stars the gamers and personalities of Achievement Hunter as they explore real, allegedly haunted places across North America and attempt to prank each other in these eerie locales.

Straight from its debut at RTX in Austin, Inverse has the exclusive clip to the first episode, in which the Achievement Hunter crew travel to the Long Leaf Sawmill in Louisiana, a ten-building mill from the 19th century that saw a disturbing amount of deaths during its years in operation. In the clip, Achievement Hunter personality Jeremy Dooley is mysteriously pushed and scratched by seemingly no one around him.

At the clip’s premiere on Thursday of RTX, the Achievement Hunter crew swore that Jeremy Dooley was cut up for real and that none of them did it.

While the pilot of Achievement Haunter premiered on May 17, the series will officially begin airing October 31 with the first two episodes.

Though it’s unlikely, it would be kind of fun if the Achievement Hunter crew teamed up for a crossover with the goofy lads of BuzzFeed Unsolved.

Jeremy Dooley reveals scratch marks in the first episode of Rooster Teeth's newest series 'Achievement Haunter.'Rooster Teeth

Achievement Haunter premieres October 31 on Rooster Teeth’s FIRST.

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What Is Forward Delivery?

Forward delivery is the final stage in a forward contract when one party supplies the underlying asset and the other pays for and takes possession of the asset. Delivery, price, and all other terms must be written into the original forward contract at its inception.

Key Takeaways

  • Forward delivery is when the underlying asset of a forward is delivered at the delivery date.
  • Forwards can be delivered or settled in cash.
  • Forwards are contracts to buy or sell an asset at a future date for a specified price.

Understanding Forward Delivery

Forward delivery is when the underlying asset is delivered to the receiving party in exchange for payment.

A forward contract is a contract between two parties to buy or sell an asset at a specified price on a future date. Forward contracts are used for hedging or speculation. A forward contract can be customized for any asset, for any amount, and for any delivery date. The parties can settle in cash, paying out the net benefit/loss on the contract, or deliver the underlying. When the contract settles in delivery of the underlying asset, that final stage is called forward delivery.

The forward contracts market is large, as many corporations use forwards to hedge interest rate risks and currency fluctuations. The actual size of the market can only be estimated since forwards don't trade on exchanges and are typically private deals.

The main problem with the forward contract market is counterparty risk. One party may not follow through on their half of the transaction and that could lead to losses for the other party.

Forwards Vs. Futures

Because futures contracts are standardized and traded on exchanges, counterparty risk is mitigated by the exchange's clearing mechanism. Further, there is a ready trading market should either the buyer or the seller decide to close out their position ahead of expiration. This is not the case with forwards.

Tighter regulation of futures ensures a fair market, and daily mark to market protects traders from running up huge, unrealized losses. Margin requirements prevent this. Again, forwards don't have this. Forward contracts trade over the counter with fewer safeguards.

Another important difference is the upfront cost. The buyer of a futures contract must maintain a portion of the cost of the contract in the account at all times, referred to as margin. The buyer of a forward contract does not necessarily have to pay or put any capital upfront but is still locked into the price they will pay (or the amount of asset they will have to deliver) later.

Because of the increased counterparty risk, the seller of the forward contract could be stuck with a large amount of the underlying asset should the buyer fail to meet their obligations. This is why forwards typically trade between institutions with solid credit and that can afford to meet their obligations. Institutions or individuals with poor credit or who are in poor financial situations will have a hard time finding institutions to conduct forwards with them.

Forward Delivery Example

Assume a simple situation in which Company A needs to buy 15,236 ounces of gold one year from now. A futures contract isn't that specific, and buying so many futures contracts (each representing 100 ounces) could incur slippage and transaction costs. Therefore, Company A chooses a forward over the futures market.

The current price of gold is $1,500. Company B agrees to sell Company A 15,236 ounces of gold in one year, but at a cost of $1,575 an ounce. The two parties agree on the price and the date of delivery. The forward rate, which is higher than the current rate, factors for storage costs while the gold is being held by Company B and risk factors.

In one year, the price of gold could be higher or lower than $1,575, but the two parties are locked in at the $1,575 rate.

Forward delivery is made by Company B providing Company A with 15,236 ounces of gold. In exchange, Company A provides Company B with $23,996,700 (15,236 x $1,575).

If the current rate is higher than $1,575, then Company A will be happy they locked in the rate they did, while Company B won't be so happy.

If the current rate is lower than $1,575, then Company A could have been better not entering into the contract, but Company B will be happy they made the deal.

That said, typically these types of deals are not meant to speculate, but rather lock in a rate on an asset that is required in the future.


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| Read Time: 3 minutes | Securities Arbitration Attorney |

Did Clay Erickson Cause You Investment Losses?

Clay Gavin Erickson of Ogden, Utah submitted a Letter of Acceptance, Waiver and Consent (AWC) to the Financial Industry Regulatory Authority (FINRA) in which he received a fine and suspension for allegedly engaging in unauthorized transactions in violation of FINRA Rule 2010. While employed with Hornor, Townsend & Kent as an Investment Company and Variable Contracts Products Representative, Clay Erickson effected 494 unauthorized transactions, totaling $5,317,233.32 in his customers’ variable annuity accounts.  FINRA found that Mr. Erickson, in anticipation of an imminent market downturn, transferred funds held by 57 customers to a money market sub-account in an effort to protect the customers’ account value.  FINRA’s findings stated that Erickson did not obtain authorization from the customers in violation of FINRA Rule 2010.  Additionally, Clay Erickson was terminated shortly after one of his customers made a complaint to the firm concerning the transactions. Clay Gavin Erickson, without admitting or denying FINRA’s findings, consented to the sanctions and was suspended from association with any FINRA member in all capacities for nine months.

Do You Need a Securities Arbitration Attorney?

Utah has hundreds of stock brokerage firms and investment advisory offices.  With so many stock brokerage firms and investment advisor offices, comes the potential for their stockbrokers, financial advisors, and other representatives to engage in all kinds of stockbroker misconduct which violates Federal and Utah securities laws and Financial Industry Regulatory Authority (FINRA) rules and stock brokerage firms policies and procedures.

Experienced Lawyers Who Handle Securities Claims In FINRA Arbitrations Throughout Utah and Nationwide.

Are you a Utah investor who has suffered significant losses in your stock brokerage and investment accounts?  Did your Utah stockbroker or investment advisor, misrepresent facts, fail to disclose facts making the statements made false and misleading, recommend unsuitable investments or strategies, excessively trade or churn, mismanage your investment account or engage in other kinds of stockbroker misconduct? If so, you need representation by an experienced, highly-rated and nationally recognized FINRA securities arbitration attorney—a lawyer who knows FINRA rules and procedures inside and out and how to handle these FINRA arbitration cases as well as other complex legal issues.

By hiring a top rated attorney like Robert Wayne Pearce with over 40 years of experience practicing securities law on both sides of the table in FINRA arbitration proceedings, you will clearly see that Attorney Pearce doesn’t just handle cases—he aggressively represents investors and is one of the best attorneys to recover your investment losses for all types of stockbroker misconduct in FINRA arbitration proceedings!

At The Law Offices of Robert Wayne Pearce, P.A., we represent investors in all kinds of securities law and investment disputes in FINRA arbitration and mediation proceedings. We handle a wide range of practice areassuch asfraud and misrepresentation, breach of fiduciary duty, failure to supervise, and unsuitable recommendations.  Attorney Pearce and his staff represent investors throughout Utah, and across the United States on a CONTINGENCY FEE basis, which means you pay nothing – NO FEES-NO COSTS – unless we put money in your pocket after receiving a settlement or FINRA arbitration award.

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Free Initial Consultation With Experienced FINRA Securities Arbitration Lawyers Serving Utah Residents In FINRA Arbitration Proceedings

The Law Offices of Robert Wayne Pearce, P.A.  are highly experienced lawyers who successfully handle securities law matters and investment disputes in FINRA arbitration proceedings, and who work tirelessly to secure the best possible result for you and your case.  For dedicated representation by an attorney with over 40 years of experience and success in all kinds of securities law and investment disputes in FINRA arbitrations serving Utah citizens, contact the firm by phone at 561-338-0037, toll free at 800-732-2889 or via e-mail.

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Robert Wayne Pearce

Robert Wayne Pearce of The Law Offices of Robert Wayne Pearce, P.A. has been a trial attorney for more than 40 years and has helped recover over $140 million dollars for his clients. During that time, he developed a well-respected and highly accomplished legal career representing investors and brokers in disputes with one another and the government and industry regulators. To speak with Attorney Pearce, call (800) 732-2889 or Contact Us online for a FREE INITIAL CONSULTATION with Attorney Pearce about your case.

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Linda Kotis and Ken Jefferson Write About Mann vs. U.S. Decision

IPB attorneys Linda Kotis and Ken Jefferson have written, "Mann Up! Accept that Your Gift of a Deconstructed House is Less than the Sum of Its Parts," for Steve Leimberg's Charitable Planning Newsletter

The article discusses Mann v. United States, 984 F.3d 317 (4th Cir. 2021), a decision which upheld a circuit court affirmation of a disallowed deduction for a charitable donation. To avoid similar situations, Kotis and Jefferson advise that, "when donating real estate, it is always necessary to follow local law applicable to real property transfers, provide a qualified appraisal to substantiate the deduction that conforms with the intended use and condition of the property, and confirm the charity’s characterization of the gift with the donee and one’s attorney or accountant.”

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Wealth Protection

Serious Illness

Serious Illness

Contracting a serious illness or disease can be devastating for both your emotional and financial health. If you find yourself unable to work due to failing health, you may be unable to pay for basic needs or necessary medical care, adding stress about money to worries about your health.

Critical illness protection is designed to alleviate some additional expenses should you find yourself facing a life-threatening health problem. Unlike income replacement coverage, critical illness plans pay a lump sum tax-free benefit to be used as needed upon diagnosis of an approved illness.

The use of this benefit is completely up to you. It can be used for out-of-town family members to visit, house cleaners, medical treatments, medical equipment, home repairs/modification, living expenses, even final vacations with family or friends.

The majority of critical illness claims are for heart attack, stroke and cancer diagnosis but they also cover other health issues depending on the policy details.

These types of plans allow you to focus on getting well and being with family and friends rather than worrying about making ends meet when you have additional health care costs.


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BARQĀNĪ, ABŪ BAKR AḤMAD B. MOḤAMMAD B. AḤMAD B. ḠĀLEB (b. 336/948, d. 425/1034), a traditionist (moḥaddeṯ),philologist, and lawyer of the Shafeʿite school, highly praised for his industry, erudition, and reliability. Born at Barqān in Ḵᵛārazm, he commenced his studies in his homeland and then left to pursue them in Baghdad. After an absence on a study tour which took him to Jorjān (Gorgān), Esfarāʾīn, Nīšāpūr, Herāt, and Marv, he returned to Baghdad, and he did further study in Damascus and Cairo; but he chose Baghdad for his permanent abode and taught there until his death. Noteworthy among his many teachers were Moḥammad b. Aḥmad Abū ʿAlī b. al-Ṣawwāf (d. 359/970), Moḥammad b. Jaʿfar b. al-Hayṯam Bondār (d. 360/970), ʿAlī b. ʿOmar Abu’l-Ḥasan Dāraqoṭnī (d. 385/995) in Baghdad, Aḥmad b. Ebrāhīm Abū Bakr Esmāʿīlī (d. 371/981) in Jorjān, Moḥammad b. Aḥmad Abū ʿAmr Ḥīrī (d. ca. 376/987) in Nīšāpūr. His most illustrious pupil was Aḥmad b. ʿAlī Abū Bakr Kaṭīb Baḡdādī (d. 463/1071), the author of the Taʾrīḵ Baḡdād.His best-known literary work is a mosnad in which he has combined the Ṣaḥīḥsof Boḵārī and Moslem (Sezgin, GAS I, p. 229). He also made collections of traditions transmitted by Sofyān Ṯawrī (d. 161/778) and others.

Brockelmann, GAL, S. I, p. 259.

Moḥammad Ḏahabī, Taḏkerat al-ḥoffāẓ,3rd ed., Hyderabad, 1376/1957, III, pp. 1074-76.

Idem, al-ʿEbar fī ḵabar man ḡabar III, Kuwait, 1961, pp. 156-57.

Ebn al-Jaw`ī, al-Montaẓam VIII,pp. 79-80.

Ḵalīl b. Aybak Ṣafadī, al-Wāfī be’l-wafayāt VII,ed. E. ʿAbbās, Wiesbaden, 1969, p. 331.

Samʿānī, ed. Yamānī, II, pp. 168-69.

Sobkī, Ṭabaqāt,2nd ed., IV, pp. 47-48.

Taʾrīḵ Baḡdād IV, pp.373-76.

Zereklī, Aʿlām2 I, p. 205. Kaḥḥāla, II, p. 74.

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 برقانی، ابوبکر احمد baraghani abou bakr ahmad baraghany abu bakr ahmed barqani abu bakr ahmad
baraghaani abu bakr ahmed

(H. Schützinger)

Originally Published: December 15, 1988

Last Updated: December 15, 1988

This article is available in print.
Vol. III, Fasc. 8, p. 821


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Selling My House for Cash in Southern California

Should you take a cash offer for your Southern California house?

Not always.

I’ll tell you how to sell any property for cash, some reasons to refuse a cash offer – and when you shouldn’t say no.

Selling My House For Cash In Southern California

If you’re selling a property in Southern California to an end buyer (the person living in the home), chances are good it won’t be bought with cash.

Most transactions close with a bank loan, because most buyers don’t have the funds.

This isn’t news.

Even most investors don’t close transactions with cash. It’s easy to let a bank share the risk, even if you have the money – most investors spread themselves too thin.

At AIR RAD we don’t spread ourselves too thin, because our primary goal is to build stable communities around Southern California.

In most cases, we’ll pay cash for your Southern California United States property.

The Benefits Of An All Cash Sale Of Your House

The benefits of a cash sale are real:

  • money fast
  • when you need it most

You don’t have to deal with the hassles of waiting months for a buyer to get a mortgage, only to be told that the lender eliminated the program and you’re back to square one.

You don’t have to list your house with a real estate agent and pay a huge commission.

You don’t have to deal with a lot of people just “kicking the tires” and checking out your property for fun. We don’t waste your time. This is our business.

You don’t need to paint, make repairs, or even clean up. We take properties just as they are. You won’t waste money on junk haulers or contractors.

You don’t need to deal with any paperwork. We have it all covered.

Working With A Reputable Southern California House Buyer / Investor

Always make sure that your cash buyer is reputable. At AIR RAD, we offer great references of past sellers we’ve helped, we can show you examples of some of the latest projects we’ve worked on, and we’ll be happy to answer any questions you have so you feel comfortable.

We pride ourselves on being a strong part of the Southern California community.  Our local mission is to help local Southern California United States homeowners who need to sell your Southern California house fast do it quickly, at a price fair to you, and to help improve the beauty of neighborhoods one house at a time.

If you’re wondering about selling your house for cash in Southern California or just need to sell a property near Southern California, we can help you.

We buy properties like yours from people who need to sell fast.

Give us a call anytime at (909) 578-0709 or
fill out the form on this website today! >>

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The remarkable story of the Irish doctor who survived capture in Japan during World War Two and the atomic bomb

The remarkable story of the Irish doctor who survived capture in Japan during World War Two and the atomic bomb

A NEW book by the filmmaker and author Bob Jackson documents the incredible life of a little-known hero of the Second World War.

The author first came across the story of Dr Aidan MacCarthy over sixteen years ago in a Cork city bar.

One punter, who had formerly served in the RAF, told the tale of the west Cork doctor, who was being held as a prisoner of war in Nagasaki in Japan when the first atomic bomb fell.

A Doctor’s Sword is the first complete biography of the Castletownbere man’s life, although a documentary of the same title was released in Irish cinemas in 2015 to critical acclaim, and will debut in the UK this year.

Born March 19, 1913, Aidan MacCarthy graduated in medicine from University College Cork in 1938 before travelling to London in search of adventure.

Indecisive as to whether to join the navy or the RAF on the first day of World War Two, he and his friends asked a hostess in a West End bar to toss a coin.

They joined the RAF the next day.

McCarthy (3rd from left) with RAF chums [Via: Collins Press] McCarthy (middle right) with RAF chums (Picture: Collins Press)
MacCarthy would go on to receive the George Medal in 1941, the highest award for bravery for non-combat personnel when he rescued a crash-landed bomber crew at his RAF base.

In 1944, he was captured by the Japanese and put to gruelling work as a slave for the Mitsubishi Corporation.

The Mitsubishi plant MacCarthy was assigned to just so happened to be the exact target of the American nuclear attack on August 9, 1945, which Dr MacCarthy survived.

After the war, Dr MacCarthy held no ill-feeling towards the Japanese, but didn’t exactly flock to buy one of the Mitsubishi cars popular at that time.

Intrigued by the west Cork man’s miraculous tale, Mr Jackson recently met with MacCarthy’s daughter, Adrienne, to help shed light on his incredible life.

Also a lecturer in Creative Media at Tralee’s Institute of Technology, Mr Jackson explained: “Aidan MacCarthy was one of a handful of people who survived the two events that mark the beginning and end of the Second World War.

“He was evacuated from the beaches of Dunkirk after three days of relentless attacks in May 1940, and he was trembling in a makeshift bomb shelter in the centre of Nagasaki when the atomic bomb destroyed the city in August 1945.”

Speaking to Adrienne, Jackson soon learned of another astonishing detail in an already unbelievable story.

On August 15, 1945, the day of the Japanese surrender, Aidan was gifted an ancestral Japanese sword by his camp commandant, whose life he saved from vengeful fellow PoWs.

MacCarthy's Nagasaki camp commandant [Via: Collins Press] Dr MacCarthy's Nagasaki camp commandant (Picture: Collins Press)
“I wasn’t surprised that, in the devastasting aftermath of the atomic bomb, Aidan MacCarthy was the first non-Japanese doctor to assist civilians,” Jackson added.

“I wanted to know more about that samurai sword—especially since there was a possibility that the ashes of the officer’s ancestors were embedded in the handle.

“After Aidan’s widow Kathleen mentioned there was a photo of the Japanese officer somewhere in their belongings, I persuaded his family to look for it.”

The revelation formed the crux of the A Doctor’s Sword documentary, which Mr Jackson produced.

In the film, Dr MacCarthy’s daughter Nicola travels with Jackson to Japan in search of the family of the Japanese commandant.

In a touching meeting detailed both in the book and the documentary, they meet the man’s descendants who credit their existence to the generosity Dr MacCarthy showed to their forebear.

Before the Second World War broke out, MacCarthy had weighed 14 stone.

By the time he returned to Ireland from Japan at the end of the war, he had lost half his body mass—weighing seven stone after years of malnutrition and starvation.

A year after the war’s conclusion, he was appointed an Officer of the Order of the British Empire before seeing out his years as a medical practitioner in England.

Despite his hardships, Dr MacCarthy lived to the grand old age of 82, passing away in London on October 11, 1995.

A new medical facility at RAF Honington, where MacCarthy served, will be named in his honour after a ceremony in February 2017.

The documentary A Doctor’s Sword will debut in UK cinemas this autumn.

Bob Jackson’s book, A Doctor’s Sword: How an Irish Doctor Survived the War, Captivity and the Atomic Bomb, is out now with Collins Press.


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Niamh Maher

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Niamh Maher, Senior Dietitian, HSE CHO 9

Niamh has worked as a Senior Dietitian for Home Enteral Feeding since 2008.  Based in the Community in North Dublin, her primary role is to co-ordinate the nutritional care of all adults discharged into the area on enteral feeding.  Prior to taking up this role, she worked as a Senior Dietitian in Oncology and ENT at Beaumont Hospital for 10 years, during which time she coordinated the discharge and follow-up of oncology & surgery patients on home enteral feeding. She was also a member of the INDI/IASLT working group which developed the ‘National descriptors for terminology for modified foods and fluids’ in 2009.

Niamh is a member of the IrSPEN Management Committee and also sits on IrSPEN’s Policy and Practice Committee. She is a joint coordinator in the development of IrSPEN’s Standards & Guidelines for Home Enteral Nutrition in Ireland.

It is estimated by IrSPEN that there are 2000 adults and children on Home Enteral Nutrition (HEN) in Ireland at any one time (at home and in residential care). Today, tube feeds are more advanced, tubes and placement easier and more discrete and equipment is more reliable, with flexible options for feeding to allow people on HEN to live as normal a life as possible. The key questions for all stakeholders involved in HEN provision is: what do HEN adults/children/carers think and feel about their own experiences of HEN, and how can we improve this experience. To help us answer these questions a survey of a sample of service users was conducted and a HEN workshop for HEN recipients was held in 2016. The outcomes were used to help inform new IrSPEN HEN guidelines being developed by a group of key stakeholders from across Ireland.

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Purple - Traditional Masjid Design Prayer Rug with Matching Zipper Carrying Bag

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SKU: hrp6-Purple

101 in stock

Makes a perfect gift.

Full Adult size Prayer rug, conveniently folds into the zipper carrying bag. Prayer mat measures approximately 27" by 45" (including tassels).

If you are ordering for an institution, please confirm from that institution that they can receive rugs with zipper cover.

Alternate SKU: 22244031

Also commonly referred to as Musalla, Sajada, or Janamaz


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February 27, 2012

FX has announced that it has renewed animated comedy Archer for a fourth season, which will be comprised of 13 new episodes. The show is currently in the midst of Season 3, which has four episodes remaining before its finale on March 22, 2012.

There is no timetable set for the show's fourth season return at this time.

(Source: TV by the Numbers)