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Lodgers plan may boost seniors’ income – and counter loneliness

Support grows for proposal allowing pensioners to rent out rooms without losing benefits.

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Key Points

  • Proposal will allow pensioners to rent out their spare rooms with no financial penalty.

  • Phone app will match homeowners with students seeking accommodation. 

  • It will help tackle loneliness experienced by the elderly.

Empty nesters and other seniors with room to spare may soon have an extra incentive to take in a lodger. 

Under an initiative proposed by New South Wales Premier Dominic Perrottet and supported by National Seniors Australia, pensioners would be able to rent out their spare rooms without affecting their pension. 

The policy could help address the housing crisis, create income for homeowners and provide companionship for people who live alone. 

Mr Perrottet has also backed a suggestion from data company SGS Economics & Planning that would see thousands of empty rooms in Sydney homes filled by electronically matching older homeowners with younger renters via a phone app. 

And he wants the federal government to support the plan so it can be implemented without any financial penalty to the householder.  

“Some provision already exists in the income test for age pensions allowing the income from board, and some level of tax offsets are also available for seniors earning additional income,” Mr Perrottet told the Sydney Summit, conducted by the think-tank Committee for Sydney, on Monday, 6 January. 

“With this in mind, I’d like the federal government to take a look at whether the current tax rules are fit for purpose for this type of arrangement.” 

The proposal comes in the wake of a survey conducted by Ipsos for the Committee for Sydney, showing that two in five residents in the city were “very concerned” about living costs. 

Affordability benefit

Mr Perrottet said such a scheme should make better use of the existing housing stock and would give younger people another affordable housing option. 

It would also “work to solve an unspoken issue in society, particularly for older people, and that’s loneliness”. 

National Seniors Chief Advocate Ian Henschke told Sydney Radio 2GB’s Deborah Knight that the premier “has hit on a really good idea” and the federal Treasurer, Jim Chalmers, “needs to look at this”. 

He said it was an instance where the federal government should “get Centrelink out of it” and “let people just get on with it”.  

Mr Henschke said the upcoming federal budget would increase the amount pensioners can earn from work to almost $12,000 a year without affecting their benefit. 

It would be a simple matter to allow that amount to be earned through rental income from a student or other lodger rather than work. 

“That’s $250 a week,” he said. “That's a good deal for the student. You hear about people at the moment paying $400 for a room.” 

Mr Henschke said issues regarding security for the householder, and cultural considerations when it came to accommodating foreign students, would have to be addressed, but the positives far outweighed the negatives. 

He said his own grandmother had taken in boarders and had developed life-long friendships with them. 

“I know that there are bad experiences, too,” he said. 

“But I think by and large, if you can have the appropriate safety checks and background checks, then it would be a welcome move.” 

Companionship bonus

Mr Henschke agreed with Mr Perrottet that the proposal could also address loneliness among older people who live by themselves. In some cases, lodgers could also help with shopping or chores around the home. 

“It would be wonderful to have that companionship if you get the right person. I think it’s going to be a win for the pensioner, a win for the student, a win for the young person looking for accommodation. 

“And it’s not going to cost the government any money.” 

For further reading: Canberra Times

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