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Retirees Should Just Sell Their Homes: Productivity Commission

Earlier this afternoon ABC News reported that the Productivity Commission’s discussion paper is suggesting that retirees would enjoy better quality of life if they sold their homes in lieu of relying on the Age Pension.

The paper argues that most retired Australians are engaged in unnecessary, precautionary saving into their golden years, and are more likely to cut spending than draw on the wealth that is their home.

The report suggests a better option for retirees would be to draw on home equity and stop relying, or rely less on, the pension.

The Combined Pensioners and Superannuants Association’s Amelia Christie said it’s not so simple.

“Inbuilt into the age pension is the assumption that people own their own home. It’s only enough money to live on just if you do own your own home,” Ms Christie said.

“And that’s increasingly not the case for people. People renting in their retirement are fairing a lot worse than home owners.

“Importantly though this is the only asset that people have. They need it to be able to survive on the age pension.

“And this idea that keeps on being floated around that older people are somehow not allowed to stay in a free standing home anymore is just ludicrous.”

Ms Christie also pointed that the reverse mortgage market in Australia is very small.

“The last time we looked at it there was only five lenders in Australia and that was post GFC where it went down from 15.”

“There’s also the issue of course that people across the country aren’t able to access reverse mortgages. They are only available to people in areas that the banks think will increase in value. So if it wasn’t across the board we wouldn’t have a fair system.”

She pointed out that many people don’t want to down size – and that there are many reasons for this, some more complex than others.

“It’s not just because they want to stay in that home – and of course that’s a valid reason as well – but there’s a lot more things at play here,” Ms Christie said.

“The other issue is that increasingly people are needing to use their house to fund residential aged care if they need it and you can’t use the home twice.

“You can’t be eating your home, for starters, you know living on it on a daily basis through the income it’s generating and then be able to cough up money for an aged care bond should you need it.

“So we need to make sure that – you know, the home is not a renewable resource that people can just keep tapping into and be expected to fund their retirement and any care needs they have.

“We need to make sure that older Australians are adequately looked after and that they are able to have some sort of security as well.”

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Alana Lowes


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  • The best solution to this dilemma seems to me to be a government scheme that allows people to sell the equity or part thereof to the government in return for the pension. I have been told the lump sum to support the current full pension is $450,000 or thereabouts.
    The problem of selling houses is well documented- agent’s fees, stamp duty, moving fees and refurnishing eat up the money freed up by a downsizing move.
    Unless you happen to live in an old dump on a big block of land suitable for medium or high density the result is inferior accommodation and no money in hand.

  • Up yours. I didn’t work hard all my life to give it to the Chinese. I rather Die and donate my House to my Family member so that you will get you hands on it

  • There is of course the current solution that exists in the UK and USA and that existed in Australia up until the 1970’s – inheritance tax.
    The ‘family home’ is a difficult concept. Does it mean the people whose children never lived in the particular property they now occupy have a family home with the attendant idea of sentimental memories or are we actually talking about a family owned asset? In the latter case is it suggested that children have some claim over the home purchased by their parents?
    Are people who live in public housing actually justified in arguing that they should be able to remain in three bedroom houses while families live in their cars? These people can also argue that they are ‘losing precious memories.’