Australian seniors stand to benefit from plan to unlock home wealth
In what would be a win both for seniors and the budget bottom line, Treasurer Scott Morrison has expressed his continued support for a plan to unlock the capital in the homes of older Australians.
The Property Council of Australia said it was very encouraging that the Treasurer had taken such a keen interest in this policy proposal, which would be a boost to seniors’ living standards and to the national economy.
“With an ageing population, under the right settings, we can unlock the capital of older Australians and create a new market for senior’s services and housing in Australia,” Mr Morrison told the Australian Financial Review.
Mary Wood, Executive Director – Retirement, said enabling seniors to unlock home capital to spend on the services they need is a smart move the industry has been advocating and one that could secure bipartisan support.
“Not only would this plan improve the quality of life for many older Australians, it would also take pressure off government spending” Ms Wood said.
“Under the Age Pension Means Test as it’s currently structured, the proceeds from the sale of a pensioner’s family home causes their pension to be cut – in effect, they’re financially penalised despite owning the same amount of assets,” Ms Wood said.
“This is a huge deterrent and reduces the housing options available to senior Australians. It can also have the knock-on effect of reducing the amount of care they can purchase.
“Removing penalties on downsizing would reduce the number of senior Australians who feel ‘trapped’ in an unsuitable home, enabling them to move and invest in more in-home services, preserving their independence for much longer.
“Property Council research conducted by Grant Thornton forecasts a doubling in the number of residents wanting to live in a retirement village in the next decade, so there is clearly a desire by many senior Australians to pursue the downsizing option.
“We strongly support the new Treasurer’s comments and look forward to seeing policy changes in this crucial social and economic policy area.”
Media contact: Fiona Benson | M 0407 294 620 | E [email protected]