Allan govt to push ahead with controversial ‘death tax’ despite concerns about elder abuse

The Allan government will push ahead with fee hikes of up to 650 per cent to process wills — dubbed a ‘death tax by stealth’ — despite concern it could increase elder abuse.

The Allan government will push ahead with plans to introduce a “death tax by stealth” despite conceding it could lead to increased cases of elder abuse.

The government on Monday announced it had settled on a new fee regime that will see the Supreme Court’s probate office rake in more in fees than it costs to operate, with the rest of the money used to fund other activities of the court.

The new tiered system, to come into effect from November 18, will see some grieving families slugged thousands of dollars more to enact the wills of loved ones.

It includes increased fees for lower value estates, valued between $250,000 and $500,000, an estimated 650 per cent higher than current levels.

Fees for estates valued between $1m and $2m jumping from $685.90 to $2,400.51.

Estates valued between $2m and $3m will see a new $4.801.02 fee imposed while $16,819.90 will be payable for estates valued at $7m or more.

However probate will become completely free for estates valued at less than $250,000, which the government says is more than 20 per cent of cases.

In New South Wales, the maximum probate fee is just $6652.

The Allan government will push ahead with plans to introduce a ‘death tax by stealth’. Picture: Nadir Kinani

The changes are expected to reap millions of dollars in extra revenue for the Supreme Court.

In a statement of reasons published on Monday, the government conceded the changes could lead to increased cases of elder abuse.

“Several submissions highlighted the potential for increased fees to result in further elder abuse, by future beneficiaries pressuring elders to transfer assets prior to death to avoid paying increased probate fees,” it said.

“In relation to the proposed probate fee, financial abuse is mostly likely to occur for assets such as cash, where the cost to transfer the asset is minimal.

“Many assets, including financial products (shares, term deposits, etc.), property and vehicles, would be costly to transfer as they would be subject to either capital gains tax and/or stamp duty, and likely need a professional to oversee the transfer.

“It would be illogical in most instances to pressure someone to transfer their assets before they passed to avoid proposed probate fees, however it is still a risk.”

The fee hikes have been slammed as a ‘death tax by stealth’. Picture: Supplied

The government fast-tracked a review of the Supreme Court’s probate fees by three years after slashing funding to Court Services Victoria by almost $20m in this year’s budget.

Acting Attorney-General, Enver Erdogan, said current fees were inadequate to cover the costs of hearings in the Supreme Court.

“It’s why we’re making the system fairer by abolishing probate fees for small estates and keeping medium sized estate fees cheaper than New South Wales and South Australia’s fees,” he said.

“For the very small percentage of Victorians dealing with multi million dollar estates, the fees will be lifted to cover the level of administration and dispute resolution these complex applications often require in court.

“These changes will ensure that the most an estate will pay in probate fees is 0.24 per cent of an estate’s value – keeping it fair for everyone who is navigating our courts.”

Shadow Attorney-General, Michael O’Brien, has been highly critical of the changes he has dubbed a the reintroduction of “death duties by stealth”.

Mr O’Brien accused Labor of ‘raiding the pockets of dead Victorians’ and of “tax gouging” at the expense of grieving families.

“This government will stop at nothing to raid the pockets of dead Victorians and grieving families because Labor can’t manage money,” he said.

Mr O’Brien said “taxing dead Victorians” and their families was “about the only profitable arm of the Allan government”.

“It can’t be justified,” he said.

He also lashed the government for announcing the “death tax by stealth” on the eve of the Melbourne Cup.

“It’s a government that’s not transparent, it’s a government that tries to hide all its bad news,” he said.