Scott Morrison re-considering family home inclusion in pension assets test

Scott Morrison re-considering family home inclusion in pension assets test
Jonathan ChancellorDecember 7, 2020

The prospect of including the family home in the pension assets test was not being seriously considered by the Minister for Social Services, Scott Morrison.

He reportedly discussed it with two seniors groups, National Seniors Australia and Council on the Ageing (COTA) Australia last month, but ruled it out this morning.

It was suggested the government had agreed that Baby Boomers, whether retired or approaching, would be exempt from any asset test changes that would be transitional to allow ample time to prepare.

The discussion comes ahead of the upcoming intergenerational report, the five-yearly public service exercise containing the 40-year budget forecasts.

Morrison, who was put in charge of the welfare system in the late 2014 Abbott Government ministerial reshuffle, sounded out seniors groups during talks late last month, according to the report by Phil Coorey at The Australian Financial Review.

But today Scott Morrison said the idea of restricting wealthier retirees' access to the pension by means-testing their homes was not something he was considering. 

"The idea that this Government would put the family home in the assets test for the pension is just not under consideration," he told ABC Radio National this morning.

Instead Scott Morrison said he wanted to encourage older people to move into smaller homes using the money to fund their own retirement.

"There is a big penalty at the moment for people who want to choose to sell the family home and to use income to support them as they age," he said.

"We do have an ageing population and at the moment the system penalises people for doing that."

The 2010 intergenerational report estimated that by 2049-50, age-related pension payments would increase from 2.7% of GDP to 3.9%.

The Grattan Institute estimated in 2013 that including some of the value of the home in the assets test could raise $5 billion a year given pensioner-age households with a $1 million in net assets. 

Labor opposes including the family home in the assets test on the basis that the value of the home depends on where people live.

"A lot of people would live in Sydney, for example, in a house they bought a long, long time ago, which has increased in value. Doesn't mean they are cash rich. It just means they are living in a house in which they have raised their family and which now has a considerable value to it because they live in Sydney," shadow treasurer Chris Bowen said.

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.
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