Inequality in the aged pension assets testing is preventing more than 50,000 Australians from moving into smaller, more manageable homes, according to the Property Council.
While the Council said some barriers to downsizing will be removed thanks to the policy announced in last night’s Federal Budget, further change is needed given the known links between inappropriate housing and increased health and age services expenditure.
“One of the biggest drags on Australian health budgets is the impact of older people living in three, four or five bedroom houses not suited for ageing, with high levels of maintenance and trip hazards,” Ben Myers, Executive Director – Retirement Living at the Property Council said.
“Allowing eligible seniors to sell their home and invest up to $300,000 – effectively $600,000 for couples – into superannuation will encourage downsizing and lead to happier and healthier lifestyles.”
“Retirees and pensioners don’t deserve to be penalised for making housing choices that suit their needs, and this policy helps to address that penalty.”
“But what it doesn’t do is address the inequality in the aged pension assets test, which the Property Council estimates is blocking upwards of 50,000 people a year from making the move to smaller and more manageable homes.”
“Exempting some sale proceeds from the assets test would remove the largest barrier to downsizing for people receiving the full age pension.”
“We know from previous research that retirees who downsize to retirement villages are saving the Federal Government more than $2 billion each year from fewer GP and hospital visits and delayed entry into aged care.”
“We note that National Seniors Australia, the country’s peak lobby group for over 50s, has also declared assets testing exemptions to be the most effective method for removing downsizing barriers.”
“The Federal Government’s announcement is a very positive step forward but we hope it will be the first of several steps to remove the remaining barriers to downsizing,” Mr Myers said.