NSW real estate: Retirees who fear pension cuts from downsizing stay put
MANY of Sydney’s most vulnerable retirees may be trapped in large, potentially dangerous houses for fear their pensions will be cut if they sell.
Property analysts say asset-rich but income-poor pensioners stand to lose thousands of dollars from downsizing because any cash surplus will affect their pension.
Homes are excluded from the calculation under which fortnightly pensions are cut by $1.50 per $1000 above the assets threshold of $202,000 for single pensioners and $286,500 for couples.
Retirees Pat Young and Vincent Young: “We love the home but it’s too big for us.” Picture: John Fotiadis
A pensioner already close to the threshold left with $150,000 in the bank after selling their home would lose $5850 a year in payments.
Property Council of Australia director Mary Wood said many older homeowners needed to sell for health reasons and increasing the asset-free threshold would save nearly $2 billion in healthcare.
“Moving into smaller homes is safer for many elderly people but it also delays their entry into aged care facilities by about five years, helping save taxpayer money,” Ms Wood said.