National Seniors Australia said today the Federal Government needed to rethink its downsizing policy introduced in last year’s Budget to allow Australians aged 65 and over to sell their home and divert up to $300,000 per person into superannuation.
National Seniors Chief Advocate Ian Henschke said the policy, which will come into effect on 1 July this year, had not been well received by most older Australians.
A National Seniors survey had shown more far more older retirees – 82 per cent – favoured the organisation’s proposal that would exempt up to $250,000 of home sale proceeds from the Age Pension means test.
Other research had shown 24 per cent of seniors planned to downsize in the future, but the biggest barrier was the financial impact on their pension.
“The government’s initiative is too narrow,” Mr Henschke said. “We’re not saying it should be abandoned. But our Rightsizing proposal would benefit more seniors and for this reason, we’ve included it again in this year’s Budget submission.
“It would enable up to $250,000 of the proceeds from a home sale to be quarantined from the Age Pension means test.
“Older Australians could move to more age-appropriate and suitable housing without losing their pension, and have funds to cover health and other costs in their old age.
“Many live in housing that is inappropriate for their needs, for example with stairs and unsuitable bathrooms. This increases the risk of injury and hospitalisation. It can also bring on early entry into residential aged care.”
Many older people cited maintenance issues as a key motivation for downsizing, while others were keen to stay in the home where they raised their families or an area that was familiar.
“But if they could sell without losing their pension, there’s no doubt many would,” Mr Henschke said. “This would free up homes for families and promote the construction of purpose-built homes for older Australians, as another key barrier to downsizing is a limited supply of ‘accessible’ housing stock with universal design features.
“We’re urging all political parties to back a Rightsizing initiative to help ensure older Australians can find the type of housing they need in the communities they know and want to live in.
“At the same time, we believe the Government’s initiative that will come into effect on 1 July should be maintained.”
Watch Ian Henschke's interview with Sky Business News on the rightsizing policy below.