Tuesday 25 October 2022
MEDIA RELEASE
ENCOURAGING RIGHT-SIZING FOR SENIORS - RIGHT MOVE, RIGHT TIME
The Retirement Living Council (RLC) has tonight applauded the Albanese Government's plan to reduce the adverse financial impacts for pensioners looking to right-size, describing it as the "right move at the right time".
RLC Executive Director Daniel Gannon said the policy changes would help cash-strapped senior Australians and create additional housing supply capacity for young families. Under the plan, the Government will extend the exemption of home sale proceeds from pension asset testing from 12 months to 24 months, which will give pensioners more time to purchase, build or renovate a new home before their pension is affected.
"Removing dis-incentives for older Australians to 'down-size' into age-friendly communities is a 'win' for older homeowners, government health and aged care budgets, and for younger Australians looking for family-sized houses in established neighbourhoods," Mr Gannon said.
"As taxpayers face growing health and aged care costs, older Australians 'right-sizing' into age-friendly communities is the right move at the right time.
"This is a win-win for seniors and the nation's housing market, which is currently under great duress," he said.
The Government will also expand access to downsizer superannuation contributions for people aged 55 to 59. The downsizer contribution will allow people to make a one-off post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home.
Mr Gannon said the Government also promised 20,000 new social housing dwellings, which will support older women at risk of homelessness.
"Often these women - the fastest growing cohort of homeless Australians - become the 'missing middle', because they don't qualify for welfare, but at the same time they don't qualify for a mortgage from a bank," Mr Gannon said.
Earlier this year the RLC released a landmark report - the 'Retirement Living - A Solution for Older Women at Risk of Homelessness' - which provided a set of clear recommendations outlining practical and cost-effective ways that retirement living communities can further support governments to address this growing issue.
BACKGROUND
"Most older Australian homeowners on low incomes could achieve a modest retirement living standard over the remainder of their lives by drawing on their home equity," said theProductivity Commission over a decade ago.
Older households have high home ownership and equity. Many current retirees spent the majority of their working life without compulsory superannuation. As a result, despite having significant housing wealth, many home-owning retirees have little voluntary savings or superannuation when they retire (Treasury, 2020). Compounding this problem, retirees on fixed incomes feel cost-of-living increases disproportionately more than those in the workforce (ABS, 2022).
Even among the lowest-income quintile of seniors, home-ownership rates are above 70 per cent (Grattan Institute, 2020). In context, the estimated median value of an age pensioner's principal residence was $560,000 in 2019 (Treasury, 2020).
