Legislative change needed for Age Pension assets test
Retirees should be given a grace period during which they can cash-in on their homes without it being subjected to the assets test, a retirement income expert believes.
Homesafe Wealth Release general manager, Dianne Shepherd, argued that legislation was needed to enable retirees to access equity from the family home, without risking their ability to access the Age Pension.
Shepherd said the solutions currently being proposed in relation to the Age Pension pleased no one.
"On one side is the argument for keeping things as they are, which continues the inequity of the full Age Pensions for those with millions of dollars of wealth timed up in the family home," she said.
"The only alternative being offered in the debate is to include the family home in the Age Pension assets test, which could have harsh consequences for many retirees and is deeply unpopular.
"Legislative change to exclude cash released for a period of, say, 10 years would create a system of co-contribution that would be a win-win-win for Government, taxpayers and retirees."
Shepherd said the move would enable retirees to cash-in on the equity currently tied up in their homes through reverse mortgages, while not diminishing their right to remain in the home for life.
AUTHOR
Nicholas O'Donoghue
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