Readers of daily newspapers will have noted the sudden and positive coverage given last week to the concept of pensions being protected when seniors downsize from the family home.
The new Minister for Social Security, Scott Morrison, has positively taken up this concept for exploration. This in part follows the work done by Mary Wood, Executive Director of the Retirement Living Council, over the past 12 months with policy advisers. Derek McMillan, Chair of the Retirement Living Council and CEO of Australian Unity Retirement, also ran an opinion piece on page 12 of the Australian newspaper last Wednesday titled Get rid of the family home.
The significance is that Morrison, barely one month into the portfolio, is both aware and has been prepared to consider this proposition after no engagement by previous ministers because it will affect government revenue plus been seen as giving a free kick to pensioners.
Put simply, currently if a senior sells their family home and downsize to a lower cost home they can achieve a cash windfall. But that cash is counted in their pension calculation, potentially reducing it a disincentive to downsize. By staying in the larger family home, they have to pay for property maintenance, they do not have funds to contribute to their care and they are depriving a family home being available for a genuine, younger family.
Makes sense, doesn't it.
