Be careful when selling family home
The family home is an untapped source of equity for those who may be adversely affected by the new Age Pension assets test but seniors should give due consideration to the implications of such a decision, according to Homesafe Solutions.
Managing director, Pete Szabo, said a number of pensioners may yield to the temptation of selling their home or downsizing as they faced the prospect of losing their pension or receiving a reduced amount.
However, he warned that pensioners should consider the emotional consequences of downsizing including moving to an unfamiliar neighbourhood where they no longer had their familiar social networks.
While home owning seniors could benefit from significant appreciation of residential property values, especially Sydney and Melbourne, they should also consider the fact that downsized homes or apartments may not be able to accommodate visits from family and grandchildren, or all of their collectables.
"It is for all these reasons that seniors need to consider with great care any decisions they make and ensure that they do not forget the role that home equity can have in securing their financial future," Szabo said.
Szabo said over 300,000 pensioners would have reduced entitlements, with as many as 100,000 losing all entitlements by 1 January, 2017.
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