The Labor government has plans to introduce a Bill to parliament with hopes to encourage pensioners to downsize and free up their larger homes for younger families. The Albanese’s government’s legislation would give pensioners an additional 12-month asset test exemption on their home sales proceeds. This is designed to give pensioners time to purchase a new home before their pension is affected.
Amanda Rishworth, a social services minister stated “We don’t want people putting off downsizing to a more suitable home because they are concerned about the impact it could have on their payment rate and overall income”, which is indicative of the Labor government’s goal to help pensioners have more flexibility by extending the length of the home sale proceeds to 24 months. In effect, this would provide them with ample time to buy a new home before the money that goes into their account from the house sale will affect their pension payments.
While this incentivises pensioners to downsize, this also benefits younger families that are seeking to grow their family sizes and require a larger house. Last year in 2021, there were roughly 8000 pensioners who downsized, and the Labor Government hopes that under this potential law, more pensioners will also downsize in the coming years.
This law was set to come into effect from 1 January, 2023.
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