I believe the family home should be included in pension means testing, this is why… 44



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Yesterday Social Services Minister Scott Morrison announced that despite the controversial debate around it, the Liberal government will not consider the family as part of the means test for the pension. Today on Starts at 60 I read so many comments saying “Hooray” “of course it shouldn’t be means tested” and supporting the idea of it not being included in the means test. But yesterday research released from the National Centre for Social and Economic Modelling found that retirees aged 65 or over who have assets worth $2 million or more still receive $500 million in welfare benefits annually – this wealth is mainly accumulated by the family home.

Australian millionaires are receiving the pension and I have to ask, can we really have our cake and eat it to?

I believe that the family home should be included in the means test and this is why.

My parents have paid taxes all their life. They both worked like many of us do, they both had an education behind them like many of us do, they volunteered time in the community like many of us do and together they owned a home like many of us do. They invested heavily in keeping this home even though at times we all thought that the mortgage was going to be the death of them. Because they had average paying jobs their house was their only investment so they didn’t have any cash assets or other investments.

When the time came to retire they were faced with a choice; do we go on the pension? Or instead do we sell the family home, downsize and live off the money we’ve worked hard to save?

They chose the latter option and the house wasn’t worth millions and millions of dollars, but it was enough. They were able to downsize into a smaller unit, this came with multiple lifestyle benefits for them and they didn’t take any government welfare.

They’re proud of this because they knew that while they sat on their hundreds of thousands of dollars worth of property, if they received the pension because they simply felt like it was owed to them, that was one lifetime of welfare support gone that could have been given to someone who truly needs it.

Selling their home has given them a better quality of life than that they’d have if they lived off the pension and to them it seemed silly to sacrifice their happiness to keep the family home. Some people asked why they weren’t leaving it for the kids but they’ve given us so much love, time and education that we don’t need to receive anything from them when they go.

Australian culture and perspective of government has changed significantly over the last few decades and it’s become a right of passage to get our money back from the government after paying taxes and working for so many years – rightly so. But if we don’t need it, should we still demand it?

I’m approaching retirement and I hope to follow in their footsteps.

After reading this, do you still think the family home should be exempt from the means test? Do you think it is only fair? Share your thoughts in the comments below… 


Guest Contributor

  1. I get so fed up with hearing “I’ve paid taxes all my life and now it’s my turn to get something back”. Taxes paid during your working life are NOT your benevolent fund for retirement, they are to pay for health, education, Infrastructure and other myriad things that taxes pay for.

    I’ve done exactly what this article talks about. I’ve downsized my million dollar plus home and freed up capital to enjoy retirement and probably won’t get a pension but hey, lucky me if I have more than the (very generous) asset limit.

    3 REPLY
    • And if you could afford to buy a million dollar house then you probably had a huge income. Therefore you should not need the government to prop you up. But, like so many people who have money, you have little or no idea how people without get by day to day.

      2 REPLY
      • You’re an idiot Faye. We paid $56,000 for our home almost 40 yrs ago, now it is worth around $1mil – — result: we pay high rates but it doesn’t mean we have any more money to spend because of our home value. Also, if we flog the ol’ place and buy a newer, smaller property anywhere 30mins distance from home, we’d be worse off! Newer, smaller = more attractive to two income small families – we’d have to pay more AND moving away from adult children and growing grandchildren means we would be more dependent on Govt services with increasing frailty. Shortsighted policy I think.

      • No, I grew up very poor, left school at 15 and had an average paying job. A bit of planning way back when was all I did.

    • Chris in my day, health education and infrastructure were paid for by our taxes. Houses cost more than 10 years salary. Women weren’t allowed to get loans, superannuation for women, forget it, equal pay never. Now you want the women who are still living, fought hard to get were they are punished even further. Remember we couldn’t work when we got married, and everything we had was our husbands even when the left us. No lets keep the family home sacrosanct

    • Well Chris you’ve obviously not heard of the Social Services Contribution Act 1945 which the workers were required to pay – separate from Income Tax. The two are now combined which means that part of my taxes pays for my pension. So I do feel entitled and you can leave my modest house ($400,000 value) alone, thank you.
      Besides, what are folks supposed to do with no cash coming in…..eat the bricks?

      1 REPLY
      • In Sydney the average home price is nearing $1 mill. Ours is and it is basically a fibro shack, which we struggled to pay off. To get cheaper we would have to move out of Sydney, away from family and with less quality medical services.

        A short sighted view.

  2. I have been retired now for about eight years – and I might add a self funded retireee – and I have yet to meet a single retiree, myself included who is on a pension and who owns a house valued any where near ONE million dollars.Where are all these millionaire pensioners? If you are one of them you are the first I have met, and while there may be some exceptions, no as a general principle I do not agree with you about including the family home in means tests.

    1 REPLY
    • That’s what I’d like to know too. The people I know on pensions like myself have properties valued well under $500,000. A lot of people who had properties probably struggled to buy them. If however, someone had done the wrong thing, say in cases of corporate greed where they were subjected to having their assets curtailed or taken, and put properties and assets worth millions in their wives or children’s names, I would agree but for the ordinary person who has worked hard, that’s a shocking suggestion.

  3. Your parents must have had a pretty amazing house! For us to downsize we are up for about as much as we would get for our current home. There would be nothing left to live on. We have paid taxes all our lives and are happy to accept a top up from the government to make our retirement comfortable.

  4. No Im sorry why should people be forced to move house they may NOT be in a position to change residence or be happy in a 1 bedroom apartment or bedsit where they can not have a bit of time in their own garden or privacy – sadly you can’t put financial $ caps on house values as they chop and change so a $400k bottom line in future would be due to inflation the smallest value home. And where are people to move to? Crappy high crime neighbourhoods?? Farther up the track away from family friends and support groups?? Nope leave my house alone – reverse mortgages mean the bank owns your soul so not the answer..

    1 REPLY
    • Agree with that, even though you are not related to me.
      A house such as ours (1970s, 3 br brick veneer) will have wildly different values in different parts of Australia.
      Here, I guess it would be around $300,000. The same type of house in Sydney or Melbourne, likely double that. Over in Perth, would I be wrong in saying triple? Port Hedland, quadruple???
      So, what are people in the higher priced areas supposed to do? Live in a bloody tent?

  5. My husband and I are on the pension and own our own home. We live in an area where houses a relatively cheap and don’t increase in value hugely. Having said that if we sold we probably couldn’t even afford a retirement village. I guess it’s different strokes for different folks but our future security lies in keeping our own home and managing on our pension. We don’t have a great deal.
    Although we both worked all our life we were in unskilled work which didn’t pay much and there was no super available to us.

  6. Yes re millionaires homes…
    If a home is over 1/2 a million it should be included.BUY what about all the tax dodging some of these millionaires or others r doing &the g/ment is still not realling them in.The lurks & perks of the G/ments.councils etc.The waste of resources ,the mistakes their r making how much does all this mount up to for the poor , hospitals,roads etc.

    3 REPLY
    • It doesn’t take a mansion in much of the country to pass the half-million dollar value

      1 REPLY
      • Yes Dennis I agree. If say, a single pensioner lives in a capital city what are they supposed to do? Move to a country town where they have no support from friends, family and the environment they are used to?

    • I bought my house newly married for $14,400 in Concord 1967. Have worked all my life, have lost my husband to cancer and am now a pensioner. I don’t know what the value of my house is now but guess it would be in the million dollar bracket but it is still a struggle to pay rates, etc. Why should I abandon my home because you think I’m well off. I’m not. I just haven’t moved around, seen this country or had holidays overseas. But there ain’t much in the bank I can tell you.

  7. My family home (modest 3 bedrooms) is worth under $400000 – less than $20000 if we sold it and could invest the realisation of the entirety at 5% (highly doubtful today). With rents currently at around the $400 mark where we live, we wouldn’t get much change from this investment. I suppose we could beg for food… Family homes are an asset only when they are too big (ie downsizing is desirable). I’m glad that Chris is not in our position, but there you go – lots of people aren’t in his position. It would make more sense to apply a capital gains tax to the family home once the ‘parents’ die. After all, the kids have probably already got their home (not).

    1 REPLY
    • I grew up very poor, left school at 15 and worked in an average paid job all my life. Had to start again at 40 when my husband left me. The only lucky break I got was that I owned a house which was in Sydney. I’ve sold it and moved to the country to partly fund my retirement. I get so sick of entitled boomers saying “why should we have to move”. Better start accepting the fact that the Govt will be looking hard at people with million dollar plus homes. It’s not a matter of if, but when.

  8. Why should it be included. Your house may have been worth $10000 when first bought but because richer people bought in the suburb, paid a lot for their house, the other properties become more valuable even though they may be run down. These people already pay higher rates and taxes due to their suburb. I worked ten extra years so that I wouldn’t have to be reliant on Centrelink but due to taxation paid, super theft by the govt and other things that happened my house is in a poorer suburb. Why should those that worked and paid the high tax, stamp duty etc now start paying again. LETS HAVE POLICIES THAT MAKE IT EASIER TO DOWNSIZE. Thanks to Govt policy I now have lost my employment so have to downsize in everything else.

  9. After reading that story I agree our family homes should be means tested. But there should be a limit .Say $800000.These people with million dollar homes are just hanging on to them for their kids.Plus they know the pros and cons of how to get the pension

  10. So if I have an indulgent life style live in a modest home or rental, enjoy great holidays, expensive clothes, shoes, beauty spas, dine out and reach retirement practically broke then I should be allowed a pension. Let’s just penalise the stupid people who save ?

  11. No the family home should not be included, you should not be forced to sell it. Some people are lucky when they buy places a house I wanted to buy on the lake on 1989 was $179,000, but we couldn’t afford it, now it’s worth around a million dollars, land rates are about $5000 now. That’s just one example how people can have a million dollar home without the outlay.

  12. I agree the family home should be included above a reasonable amount. The assumption that those on the pension or welfare payments have not worked or paid taxes when able to do so and therefore are bludging on those that have been able to Aquire homes etc. is wrong . The super rich have taken advantage of the public to become rich also by avoiding paying a fair amount of taxes they are robbing the country . Many on welfare have no chance of getting work and many have been made sick by bad safety practices in the workplace and surrounding areas in the past and present. People are being seduced into bad living practices by the companies producing the processed foods etc. creating sickness and dependence on welfare. In other words the rich get rich on the backs of the poor.

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