Seniors’ groups give their verdict on budget measures

In the lead up to the budget, there was a lot of talk about how it might address concerns about aged care, downsizing and housing affordability for older Australians.

Now, that it’s been delivered, seniors’ groups and industry bodies have had their say on whether it will be effective – and the response is mixed.

One of the most talked about and anticipated measures for older Australians was a change in the rules to encourage people to downsize their homes.

From July 1, 2018, people aged 65 and over will be able to make a post-tax contribution into their super of up to $300,000 from the proceeds of the sale of their family home. The $300,000 cap will be per person, so a couple could contribute $600,000 to their super under the new ‘downsizing’ rules.

To do so, however, they must have lived in the home for at least 10 years, and the increased super pot will be subject to the Age Pension assets test.

While the budget didn’t take up the ‘rightsizing’ suggestions put forward by groups such as National Seniors Australia and the Property Council of Australia, the new measures have been described as “a very positive step forward”.

Ben Myers, the executive director of retirement living at the Property Council, said allowing older Australians to invest the proceeds of the sale of their home into their super would encourage more people to downsize.

“Allowing eligible seniors to sell their home and invest up to $300,000 – effectively $600,000 for couples – into superannuation will encourage downsizing and lead to happier and healthier lifestyles,” he said.

“Retirees and pensioners don’t deserve to be penalised for making housing choices that suit their needs, and this policy helps to address that penalty. But what it doesn’t do is address the inequality in the aged pension assets test, which the Property Council estimates is blocking upwards of 50,000 people a year from making the move to smaller and more manageable homes.

 “Exempting some sale proceeds from the assets test would remove the largest barrier to downsizing for people receiving the full age pension.”

 Meanwhile, the Council on the Ageing has stated it doesn’t see the downsizing measure having an immediate effect on housing affordability.

“This is likely only to have an impact over the longer term as other drivers come into play for older people considering leaving the family home, and it will have to be monitored for unintended consequences,” CEO Ian Yates said.

But what about older Australians who don’t own a home?

Well, as some seniors’ groups point out, the budget didn’t have a lot in it to ease concerns about rental affordability.

Fiona York from the Housing for the Aged Action Group told Starts at 60 that while the organisation was happy to see funding for homelessness services continue for the next two years, she was disappointed the budget didn’t do more to address the issues.

“There has been no more promises for investment in public housing,” she said.

“Public housing is an important form of affordable housing, especially for people on the age pension.

“There needs to be an immediate investment in public housing – both state and federal investment.”

Aside from public housing, the Housing for the Aged Action Group also expressed disappointment in the government’s reluctance to address housing affordability concerns such as negative gearing.

“That’s a bit disappointing,” York told Starts at 60.

“It’s also disappointing there hasn’t been an increase in the age pension.

“People coming through our service are paying as much as 90% of their pension on rent and most of the people in our services are in housing stress because of increases in rent.”

Outside of housing affordability, aged care funding measures in the budget also attracted plenty of feedback from seniors’ groups and industry bodies.

Among the measures in the budget was a commitment to maintain the current levels of aged care funding, putting aside money for the ongoing aged care reform process and a commitment of $1.9 million to set up a taskforce to look into making sure Australia has enough care workers.

Aged and Community Services Australia welcomed those funding measures, as well as the extension of Commonwealth Home Support Program to July 1, 2020 while the government works on the merging of the program with the Home Care Packages programs.

“It will be important that the Government now undertake the development work to ensure the new program commences in full on 1 July 2020 with an integrated assessment workforce and consistent fees policies,” CEO Pat Sparrow said.

“It is pleasing to see the commitment to wellness and restorative approaches within the CHSP while the new program is built.”

They’ve also welcomed money in the budget to improve the My Aged Care service, describing them as “much needed”.

“If My Aged Care is to be an effective entry point to the aged care system it must be adequately resourced to ensure older people and providers can easily find the information they need and it is easy to access services,” Ms Sparrow said.

“ACSA has repeatedly highlighted the need for funding certainty and is pleased that the Government has heeded our advice. The steady as she goes approach outlined in this Budget is necessary while the Legislated Review and ACFI reviews are completed. Industry and the Government will then be able to have a sensible conversation on how aged care funding, including those from the public and private purse, can be structured to ensure our older citizens receive the quality of care they deserve.”

COTA has also welcome most of the aged care measures in the budget, although they have warned about delaying the development of an integrated care assessment service.

CEO Ian Yates warned that any further delays could risk undermining broader reforms to aged care.

“COTA also urges the government to announce a firm commitment to promptly implementing the Aged Care Reform Roadmap to provide timely and seamless aged care across home and residential care with full consumer control over care packages and beds,” he said.

“If this does not happen soon then deferring the merger of CHSP and HCP programs will turn into “more of the same”, which is not good enough and will impede real reform.”

Meanwhile, the Aged Care Guild said funding stability for aged care would give assurance to elderly Australians and their families that resources “will be maintained”.