Age pension changes to bring independence and happiness

A Senate inquiry into affordable housing has heard an appeal to amend the pension assets test on the grounds that more seniors would be inclined to downsize to appropriate housing if they do so.

The Retirement Living Council (RLC), who made the proposal, said that senior Australians are holding onto their large family homes to avoid a pension reduction.

RLC executive director Mary Wood told the inquiry’s hearing in Sydney last Monday that altering the pension assets test would unlock equity in the home, allowing pensioners a greater choice of housing options.

“For a pensioner to sell their family home – often their only significant asset – and downsize usually results in a cash saving, and therefore a pension reduction,” Ms Wood said.

“Age pensioners who wish to downsize or ‘right size,’ to a unit in a retirement village or elsewhere, should be able to do so without the government penalising them,” she said.

The RLC submission argues that seniors suffer isolation and potential health risks when they remain in a large, non-age-friendly homes, unable to access the value of their property to pay for medical and support services.

The RLC are calling for up to $150,000 of the sale of a person’s home to be exempted from the aged pension test for all full pensioners over the age of 75.

They specify that reserved funds should be held in special, separate accounts established by credit unions or banks and used only for health and wellbeing expenses, such as in-home care services.

The proposal was received well with senators agreeing the “imaginative” approach to housing affordability drew on existing Commonwealth powers, rather than seeking to capitalise on grants and subsidies for the sector.

Ms Wood said the policy would have broad social and economic benefits, including most importantly, “the capacity of senior Australians to live independently and happily.”

An outcome regarding the proposal will be reached by March next year, when the Senate inquiry into affordable housing is due for report.