The family home could soon be considered under the Age Pension assets test, should recommendations by the Institute of Actuaries Australia be adopted.
In its pre-budget submission, the institute has called on the Government to consider imposing a dollar cap on the value of the family home that is exempt from the assets test. The cap could improve fairness in the system for homeowners and non-homeowners.
According to the submission, 95 per cent of homeowners would be on retirement incomes at least equivalent to the Association of Superannuation Funds of Australia modest level, compared to 28 per cent of renting couples.
Single female renters would have the lowest retirement incomes, with 23 per cent projected to reach ‘modest’ levels compared to 35 per cent of male renters.
“Actual rental payments are significantly higher than the level of Centrelink rental assistance, with the maximum Centrelink rent assistance being $136 per fortnight for a single renter living alone whereas the median rent is closer to $400 a fortnight,” states the submission.
The submission also damned Rent Assistance as inadequate, saying it had fallen as a percentage of average rental payments since 2001. The institute recommends Commonwealth rental assistance be increased by 40 per cent to provide adequate support for renting age pensioners and other welfare recipients.
What would you say to a cap on the value of the family home? What dollar cap would you recommend? Or should the family home remain exempt from the means test?