Pensioners need assistance to downsize
A more targeted change to the age pension asset test would enable senior Australians to downsize and extend their independence, without being financially penalised, says the Property Council of Australia.
Instead of including the value of the home in the age pension asset test, which would jeopardise the regular income of thousands of pensioners, the Property Council proposes a removal of the disincentive to downsize for those who would most benefit from a move.
Ben Myers, Executive Director – Retirement Living, said the proposal would also be a long-term financial gain for the federal budget.
"Research by Grant Thornton shows governments actually save money through lower healthcare costs when senior Australians downsize to a retirement village," Mr Myers said.
"However the age pension asset test acts as a strong disincentive for seniors to downsize, because any money left over from selling a family home and downsizing is then included in the pension asset test.
"Our proposed policy change would enable full rate pensioner home owners aged over 75 to retain the same pension benefits and gain a moderate cash excess when they choose to move into a smaller and more easily maintained home.
"Unlike other proposals, this change would be precisely targeted at those Australians who would gain the greatest benefit from downsizing, extending their capacity to live independently and happily."
The full details of the Property Council’s proposal is in our 2017-18 Federal Pre-Budget Submission.