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Asset-rich retirees may miss out on pension
Released 20 January 2011

Seniors groups warn the elderly may be forced to sell their homes if the government implements a plan to include the family home in the age-pension means test. 

A Federal Government working paper that found Australian retirees are asset-rich but income poor has recommended the family home be included in the age-pension means test. The proposal has been met with strong opposition from peak seniors bodies.

The move would disqualify many retirees from receiving the pension, says National Seniors Chief Executive Michael O’Neil.

“People would be forced to look at selling their home to free up cash to enable them to live during their later years.”

Families Minister Jenny Macklin has ruled out the option. She says the government would “not change long-standing policy that exempts the family home from the pension assets test”.

Charmaine Crowe, Policy Coordinator for the Combined Pensioners and Superannuants Association of NSW, applauds the decision.

“We’re pleased the Minister has ruled out including the home in the means test … you’ve got people in their 80s and 90s who have been receiving the age pension since they were 60 or 65. For them to suddenly find it has been cut because of the value of their home – that’s something that no one wants to see.”

She also points out that the consequences of such a move are not just financial. “For people to move out of their communities will disrupt connections they have with family, with friends and with health care facilities.”

Charmaine gives the example of retirees living in the inner-west suburbs of Sydney, such as Balmain. “These regions were very much working class 40 or 50 years ago and many people still reside in those areas. Their houses may have increased 10-fold in value.

“For them to move to another part of Sydney they would have to move quite a distance away. And even then they are not going to make a lot of money from downsizing because houses throughout Sydney are expensive.”

“People would be forced to look at selling their home to free up cash to enable them to live during their later years.”