A proposal to change superannuation concessions for older Australians who downsize their homes will not be effective on its own, according to National Seniors Australia.
Ahead of the 9 May Federal Budget, the Federal Government is believed to be considering tax concessions for retirees who downsize by selling the family home.
But National Seniors Australia Chief Advocate Ian Henschke said this week that the proposal was too narrow on its own.
“Our Rightsizing proposal would benefit more Australian seniors,” Mr Henschke said.
“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.
“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.”
Mr Henschke said National Senior’s Rightsizing policy was about providing alternatives to those older Australians who would like to have a home that was more age-appropriate in terms of design and facilities.
“We would never promote a policy that compelled anyone to move, and we also want to ensure that those who do choose to downsize can do so without losing their Aged Pension,” he said.
Mr Henschke said that many asset-rich, income poor people were staying in their homes for one reason only – if they sold they would lose their pension.
"We know there are two million pensioners who own their own homes and if they could sell without losing their pension, there’s no doubt many would,” he said.
“This would free up homes for families and promote the construction of purpose-built homes for older Australians.
“We’re urging all political parties to back a Rightsizing initiative.”