Budget 2013: Seniors allowed to sell family home without risking age pension
THIRTY thousand seniors will be able to sell up and move into more manageable residences while their profits are shielded from means testing in a special account.Under a $112.4 million, three-year trial from July next year, they will be able to sell their home - which must have been owned for 25 years - buy a smaller home and sink 80 per cent of the remaining proceeds - up to $200,000 - into a special bank account.
The money, plus interest, will be exempt from the age pension means test for up to 10 years as long as no withdrawals are made, except to be gifted.
People moving into granny flats or retirement villages can also benefit, but not those moving to residential aged care.
Currently, the pension assets test doesn't take into account the value of a home.
But if the home is sold, cash assets can trigger a means test that dilutes pension payments.
Families Minister Jenny Macklin said many older Australians were staying in sprawling homes with difficult-to-manage stairs and gardens because they were scared moving would see their pension cut.
''We certainly heard from pensioners they want the opportunity to downsize,'' Ms Macklin said.
''Obviousy it's up to them, but we want to give people the opportunity to go into a smaller home if that's what they would like to do.
''This is a way of having a home that might be a bit more managable.''
It is hoped the trial will free up family homes in a tight housing market.
Meanwhile, the Government will spend $9.9 million extending its Broadband for Seniors program, which has already seen about 2000 free internet kiosks built in places like RSLs and community centres for seniors to surf the web and learn computer skills.
And $4.6 million will be used to set up an institue for ageing to nail down the pros and cons of an ageing population in fields like health and wellbeing, community participation and changing infrastructure needs.