A possible Budget measure to exempt the proceeds of downsizing homes from the superannuation contribution caps will not be effective without there also being an exemption from the age pension tests, says National Seniors Australia.
The Government is reportedly considering allowing people who downsize their homes to contribute an amount to superannuation outside of the non-concessional contribution caps or the Transfer Balance Cap in the upcoming 2017/18 Budget. Though this would not be eligible for an exemption from the age pension tests.
National Seniors Australia said the option was too narrow and wouldn’t be effective without an exemption for the age pension.
“Our Rightsizing proposal would benefit more Australian seniors,” said National Seniors Australia Chief Advocate Ian Henschke.
“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.”
A survey by National Seniors found that almost 25% of Australia’s two million seniors who owned homes said they were too big.
“If they could sell without losing their pension, there’s no doubt many would,” said Mr Henschke.
“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.”