Downsizing Plan Headed In The Right Direction

The Property Council of Australia welcomes reports today that the Federal Government is examining ways to remove barriers for older Australians looking to downsize their home.

Executive Director, Retirement Living, Mary Wood said allowing seniors to unlock the equity in their family home is a critical policy step in the context of Australia's ageing population.

"Targeting reforms to the aged pension means test to remove the current disincentive to downsize is good public policy that will benefit seniors as well as making the pension system fairer and more sustainable," Ms Wood said.

"It's encouraging to see these ideas are on the table but we urge the government to ensure the choice of moving to a retirement village is respected in the reforms being considered.

"Older Australians need access to all retirement living options, and the penalty on downsizing should be removed for all pensioners, not just those who buy annuities.

"Retirement villages are already home to almost 200,000 residents - more than the total number of senior Australians who live residential aged care - and are becoming more and more popular."The Property Council has previously put forward a simple and fair reform proposal to make a highly targeted adjustment to the age pension means test, exempting up to $200,000 of home sale proceeds from the means test of age pensioners who:

• are homeowners;
• aged 75 or over;
• receive the full age pension; and
• purchase a cheaper home within 12 months.