High number of $100 notes due to pensioners hiding cash 'under the bed'
A mysteriously high number of $100 notes in circulation in Australia has been blamed on elderly citizens who hoard cash "under the bed" to ensure they receive a pension.
Australia has about 10 $100 notes in circulation per person – far more than the $20 note which is much more commonly seen Photo: ALAMY
By Jonathan Pearlman, Sydney
9:40AM BST 25 Sep 2012
A former official at Australia's Reserve Bank, Peter Mair, said high-value notes should be phased out to prevent mass welfare fraud by the elderly who are hiding $AUS20 billion (£12.8 billion) to become eligible for entitlements. Australia has about 10 $100 notes in circulation per person – far more than the $20 note which is much more commonly seen.
"Old people may be old but they are not silly and as a ballpark figure I suggested people could be holding up to $50,000," he told ABC Radio.
"They [$50 and $100 notes] are being withheld from circulation, mainly by people looking to manage their assets to get them under the threshold to qualify for getting the aged pension." Mr Mair has written to the Reserve Bank governor, Glenn Stevens, to propose phasing out $50 and $100 notes which only "facilitate tax-dodging".
He said credit cards and the internet have made high-value notes redundant and that their primary use in Australia – where pensions are means-tested – is to encourage fraud by senior citizens.
"If putting it under the bed or in a cupboard means you qualify for the pensioner card, you get discounted council rates, discounted car registration, discounted phone rental – in percentage terms the return is enormous," he told The Age.
However, the Council of the Aged Australia hit back at the claims, saying welfare fraud was spread across all age groups.
"It's really unfortunate that older people have been singled out to be called welfare cheats when the vast majority of older people on the pension are struggling to make ends meet on the pension and are doing the right thing and have paid taxes all their lives," said a spokeswoman for the council, Jo Root.
