Downsizing incentive for
home care recipients
We're lobbying for an incentive to help home care recipients downsize and stay out of residential care.
The issue
Older Australians might consider downsizing if alternatives were available. However, one of the biggest barriers, is fear of the impact on a person’s pension.
Our recommendation
We recommend that home care recipients be supported to downsize into a smaller, age friendly home by exempting excess sale proceeds from the assets test.
The benefits
Removing the financial disincentive to downsize reduces the risk of prematurely entering residential care and with it the cost of care.
Why the policy is needed
- 92% of Australians want to remain in their own home as the age.
- A proportion of older Australians live in larger homes that have become unsuitable as they get older – almost 50% of households receiving a pension or government allowance had two or more bedrooms spare.
- Older people can lower their risk of entry into care where care is provided – studies show that every hour of service received per week was associated with a 6% lower risk of entry into residential care.
Older people should be granted an exemption from the assets test for excess sale proceeds to encourage them to downsize into more suitable housing. This will:
- ensure the delivery of care and support is easier, and
- keep people out of residential care for as long as practical.
Eligibility would be restricted to people who were aged 80 and over, were eligible for a Home Care Package and had owned their home for more than 10 years.
Those choosing to downsize could place excess funds into superannuation using the downsizing into superannuation scheme and would then be able to purchase additional care and support.
Reduces the risk of prematurely entering residential care.
Reduces the overall cost of care to government and the individual.
Removes the financial disincentive to downsizing.
Increases the use of the superannuation downsizing scheme.
Stimulates demand for seniors friendly, accessible housing.
Frees up housing stock, taking pressure off the housing market.
Boosts spending, creating jobs and economic development.
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Your gift today can help fix pension poverty, rebuild the retirement income system and provide more home care places so that older Australians can live safely and make ends meet.
