Making downsizing affordable

A pilot program will be introduced to assist older Australians to downsize their home.

Federal Budget 2013-14: Making downsizing affordable

A pilot program will be introduced to assist older Australians to downsize their home without affecting the Age Pension. Would this help you move?

Housing was identified by the Advisory Panel on Positive Ageing as a major challenge for an ageing population. A pilot program will be funded at a cost of $112.4 million to assist older Australians to downsize without their pension being affected.

From 1 July 2014 those claiming the Age Pension can downsize and invest the additional funds, capped at $200,000, in a special account. The funds invested and any interest earned, will be exempt from asset and income testing for up to 10 years.





    COMMENTS

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    Ming
    15th May 2013
    11:54am
    I live in Sydney, houses generate a lot in excess of $200,000 when sold. What is the position regarding proceeds in excess of $200,000? In fact there would be few places in towns/cities where houses were not worth in excess of the $200,000, one thinks it is a sneaky way to get older people to get off the pension and/or pay more tax. This government cannot be trusted big time.
    Ok
    15th May 2013
    2:14pm
    I agree that the Government cannot be trusted, but in this instance it would not make a difference if funds are tied up in a home or are in a bank account helping the economy. There are too many large homes occupied by a an elderly couple or single person. These homes could be used by families. It is overall a good idea.
    Golfer
    15th May 2013
    3:10pm
    Anyone know why this pilot would cost the government $112.4m?
    I cannot for the life of me see how it would cost them anything unless they pay the selling costs on your home and the stamp duty on the downsized purchase.

    The government would stand to gain on the $200,000 which must be placed in "a special account" because as sure as anything the govt would manage the account and all the money in it.
    Nan Norma
    15th May 2013
    4:07pm
    It sounded good until 'in a special account" but maybe it is in a special account is to seperate it from your other bank accounts. We need some clarification.
    Nan Norma
    15th May 2013
    4:09pm
    I'm thinking it would free up a lot of large homes for families. That's what is needed in Brisbane.
    Dide
    15th May 2013
    4:12pm
    I have been pushing for this policy change for some time. It is intended for people who are downsizing into another home (maybe an apartment or smaller home etc) and there will be a residue from the sale of the family home, which is likely to only be about $200,000 if people choose to live in the same area. I think this is a terrific initiative. It will allow people to move into smaller perhaps more modern, less maintenance homes. Dide
    Nan Norma
    15th May 2013
    4:15pm
    Dide It will certainly encourage some people to make the move.
    Ok
    15th May 2013
    10:36pm
    I had another good look and the scheme seems to be a con. You have to have lived in the home for 25 years to get the benefits from the scheme. Many from us were working in areas where you could not buy a home and we had to shift into the city later on in life. This seems to be another scam designed by Swan. How many people had to move around Australia to find work in other towns and places and here we find Swan another way to punish people trying to find work.
    piklo
    16th May 2013
    6:54am
    morning people
    I could not agree with all the above but the point that sticks in my gizzard its a blood shame that no one trusts the government of the day and its so true the moment they seem to doing something that you think might help us in one way or another there is always a hidden agenda and as for this government the only way to treat it would be like a tipan trying to attack you pick up a good stick or run roll on September
    FEDUP
    16th May 2013
    8:11am
    I live in the country on a small holding of 14 acres, mostly by my self and would be happy to
    downsize and move to a different area. But the property I have is only worth $300,000, by the time you sell at say $270,000 buy a place in a retirement village $225,000 plus and update my car $20,000, pay for moving $7,000. There is nothing to put into a "Special Account". You cannot gift money to anyone as that is classed as income, according to an enquiry made with Centre Link a few years ago. But if anyone is interested in living in the country at Wycheproof, where at least you can smell the grass and not petrol fumes. Contact me.
    Nan Norma
    16th May 2013
    4:26pm
    Fedup, You can gift up to $10,000 in one year but no more than $30,000 in 5 years. Anymore than that and you will be assest has still having it.
    Goldie
    16th May 2013
    3:11pm
    Who said no one trusts this govt. I do. Our prime minister is wonderful. This budget will help those who most need it. And woderful for most of the people needing to downsize. Get off her back. Stop whinging you lot, or go and live in another country. It's impossible to please all of the people,all of the time.
    Ok
    16th May 2013
    5:13pm
    To Goldie: Julia must be happy still having a fan. I agree, with all her faults, she is still by far the best person form the Labor company. The idea is good, but only a few working people would have lived in the same place for 25 years. It seems to be a scheme to suit people having lived in the same place forever and never ever worked or lived. 25 years means they could have stayed put in one place from the age of 40.!!
    Nan Norma
    16th May 2013
    5:23pm
    Hey, I've lived in one place for forty years. I've seen several countries in that time and, I believe I've done a lot of good work for my community and made many wonderful friends, as well as bringing up a family. I've been happy to live in one place as my parents were always moving.
    Ok
    16th May 2013
    5:29pm
    To Nan: Why should YOU get the downsizing deal and not people having lived in different places to make a living? Labor has to learn something about fairness.
    Nan Norma
    16th May 2013
    5:37pm
    OK, Hey, it's not my fault. Don't blame me. Complain to Julie. I doubt I'll be moving anytime soon. I don't think I'd make anything out of moving anyway.
    franny
    16th May 2013
    7:28pm
    what a ridiculous rule that to benefit when downsizing .... you must have lived in the house for 25 years ...when they were in the political meetings they must have had to many Margaritas and just picked a nr ...how many people do you all know who lived in the same house for so long ...I know nobody
    Nan Norma
    16th May 2013
    9:27pm
    franny, they don't want too many people benefiting. But I'm glad they're sting the baby bonus. Giving that amount of money was ridiculous.
    Ok
    16th May 2013
    9:27pm
    it is sometimes hard to believe how stupid some of the rules are. I am sure they have hired all the best paid consultants to make a simple thing complicated. If it would not be real and if it would not affect us all, our politics would make a best selling comedy show.
    Nan Norma
    16th May 2013
    9:30pm
    OK, They just wanted to look as if they were giving all the seniors something.
    tams
    17th May 2013
    5:08pm
    Seems a strange piece of policy from a Government who won't be there in July 2014 (start date). Dreamed up by public servants who have worked and lived in Canberra all their lives. The $112m is supposed to encourage 30,000 to downsize by 2017. They couldn't have read the research from AIHW that over 90% of seniors don't want to leave their current home, especially those who own their home outright or have a mortgage
    Ok
    17th May 2013
    10:47pm
    There are many of us with big homes, which we needed to bring up our children. (4 children in our case). These homes are now half empty and as pensioners, many of us haven't got much money to pay for the upkeep and would be happy to downgrade. The high cost of buying and selling combined with the madness of stamp duties and other silly hindrances prevents us doing so. The proposal of the Government to make it easier could have some merits, if the silly 25 years ownership could be changed to a more reasonable 5 year term.
    Disgusted
    12th Aug 2013
    4:14pm
    Well, I think it is a case of simply job creation. 112 million going into wages for yet more unnecessary public servants. I have owned my own home for 21 years, the trial finishes in 3 years when I will have owned it 1 year short of the end of the trial. How many houses take more than 3 years to sell anyway, even if all the eligible pensions placed their homes on the market immediately. Who would call it a policy? Policy explains the workings, there is no mention of what interest rate would be paid or how it would be calculated! And has everyone missed the little piece of legislation that says it is not income or asset tested for 10 years OR UNTIL YOU MAKE A WITHDRAWAL!!!! No clarification of what that means, whether the minute you start to spend some of your own money on an overseas trip or anything else you may have planned for the money, the whole lot is suddenly asset and income tested. I have looked at the FASCIA website and that sneaky little clause is never explained. WHO CAN BLAME US FOR NOT TRUSTING THE GOVERNMENT, THEY ARE NOT OUT THERE TO HELP YOU, THEY WANT TO GET THEIR HANDS ON EVEN MORE OF YOUR MONEY! If not why don't they tell us how the interest rate would be calculated and what they mean by ....until you make a withdrawal..... Who on earth would want $200,000 sitting in an account that earns low interest and they can't access it easily. Is there a hope that you will die within the 10 years and it will be quietly spirited away into consolidated revenue?
    FEDUP
    13th Aug 2013
    4:52am
    Disgusted, you hit the nail on the head. The program should not be for those that have had their homes for 25 years, that is discrimination. It is cheating just like K Rudd did at the first,
    and I hope only debate. Why cannot some of us sell our homes, go into smaller houses which we can maintain. What about the memories left behind, they will travel with us, rather than some of us asking our departed spouse "Do you want a cuppa, love". Then sitting down and crying at all the memories, and asking why they left us. I would like to move, but cannot afford to do so, so I will die in my home, maybe not found for a couple of weeks. All because I have been discriminated against by a Government that I once, but never will again, voted for.
    MarcioWilges
    27th Jul 2015
    6:49pm
    I think it's really quite complicated for the older folk to downsize if it's going to affect their pension. I know a number of families in Sydney that ended up having to find a way to move into their parents homes so that they could take care of their aging parents without affecting the extra funds coming in.
    Nan Norma
    27th Jul 2015
    8:26pm
    Family can live with parents without it affecting their pension. Adult children can give their parents money too (I wish) without it affecting their pension.


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