Australia’s peak consumer organisation for older Australians says seniors should be able to access the equity in their home as a way of funding additional care, but at a fair interest rate.
Chief Advocate Ian Henschke says the government’s Pension Loans Scheme (PLS)
allows older Australians to access their home equity but the borrowing rate of
4.5% is too high.
“Our scheme would have a much lower rate. And since the equity can only be used to fund home care, it would not be a competitor to current commercial reverse mortgage schemes,” Mr Henschke said.
National Seniors also wants to see more suitable housing projects with simple lease agreements.
“While there are many retirement villages available, very few operate on a simple rental agreement and require up front capital and charge complicated and costly exit fees,” Mr Henschke said.
Also included in the submission is a proposal that a universal pension be investigated as a means of ironing out the inequities and complexities in the current pension assets tests, including taper and deeming rates.
“Other countries such as New Zealand and Canada have universal pensions. If they can make it work then why can’t we?” said Mr Henschke.
There’s also a proposal in the submission for a Green Bonds Scheme as a means of encouraging older Australians to invest in green infrastructure projects such as ‘Snowy 2.0’.
It follows a survey which found almost 60% of older Australians believe we should reduce carbon emissions, even if there is a cost to households.
Full details of all the proposals can be found in the 2021/22 Budget Submission.
Mr Henschke is available for comment.
Contact National Seniors Australia for further information.