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Survey responses on pension eligibility for wealthy homeowners

Last week's survey on whether to include the value of the principal place of residence in eligibility tests for the age pension drew 2,000 responses and much debate. We thank everyone who shared their views and opinions.

Our readers had a lot to say - for and against the policy change - so here we present a summary of the findings. If you want to delve into more detail, including the 1,000 plus comments, linked here is a complete results report.

Q1 Should the value of a principal place of residence be included in the assets test for the age pension?

In the 'yes' corner, we had 70% of respondents with 15% wanting to see the full value of the home included in the asset test and 55% thinking a value threshold is needed. That left 30% opposing inclusion totally.

Threshold values

We asked for views on what threshold might be appropriate. After zero, suggested amounts ranged from $500,000 all the way up to $2 million with varying caveats and allowances, including indexation, basing off median values by suburb/LGA/region (or median + a percentage), different levels for couples versus individuals, taking into consideration price fluctuations, stepped introduction over many years, using unimproved (land) values only, no retrospective changes ... the list seemed almost endless.

There were calls for the entire tax system to be overhauled (mmm, no small task), the reintroduction of death or inheritance duties for homes that are left to the next generation, or the abolition of negative gearing.

The idea of a universal pension, which is taxed along with any other income, was also commonly floated.

A big concern was if pensioners would be forced to sell the family home, rather than make use of home equity redraw products. Many suggested more equitable access to the Pension Loans Scheme or similar. Issues surrounding proximity to family and social networks, medical care, and even using the eventual sale of the home to fund age care costs were also raised.

Q2 If yes, for what reason(s)?

The most common reason given by those answering 'yes' was that people with considerable assets should not receive welfare (83%), followed by the use of home equity to fund retirement cash flow needs (65%), and the inequity of the system compared to those who have invested into other assets throughout their lives (61%).

Q3 If no, for what reasons(s)?

The top reason given for not including the value of the home was that people's primary residence is non-income producing (65.6%), closely followed by using the home to fund an aged care place (64%) and an aversion to being forced to borrow against the home (63%). Over half still viewed the home as having a special status that should be left alone.

Further comments

We received over 450 comments in the final open-ended section, which can be viewed in this full report (a meaty 58 pages).


Leisa Bell is an Editorial Associate at Firstlinks.


October 03, 2021

So the majority voted for more taxes. Never realised there was so many generous people out there.

October 03, 2021

Perhaps they voted for more taxes from belief in other people's generosity.

October 03, 2021

The government hate retires if you don't pay tax you no good in this world and also want to take all asset off you that you work for to fill their own pocket the sad thing about it we all and pay tax and when we get old we no good how much money do government wants now they want to take your home , what's the point of people working might a we'll sit on the dole and have nothing

September 28, 2021

I think the estate tax is a great idea, if not fraught politically. By all means draw the pension if you need it so long as the amount you draw is deducted from the value of your estate after you die. It might push people to look into sensible options like downsizing, moving to a cheaper area which will free up housing for younger families.

Someone said that retirees should be helped to live near their kids by keeping the home. Yes, but look at Vancouver. All the young people leave their parents behind in Vancouver as the property prices have been insane for years.

September 27, 2021

I wonder what is the probability of a principal residence will be included in the age pension assessment within the next 5, 10 and 15 years? My bet is 0, 0 and 0%. We have had so many tax reviews and has the government ever implemented any major recommendation?! Anyone who is aged above 50 and wishes to stay in multi million dollar house and collect pension can relax. For the sake of your blood pressure.

I own my home and investment properties. I have certainly worked hard but not harder than my younger friends who have been priced out. I am well qualified but not more qualified than my younger friends who have been priced out. I just had a it luck on my side.

September 25, 2021

Agree with many on here. Also large inheritances often end up in the hands of children who waste it all on trinkets, junk and stuff, international holidays, become hoarders etc. It is the same old story where one generation works hard to build up wealth and subsequent generations sometimes waste it all. Often it just sets up multi generation dynasties like royal families, lords and ladies etc. for which many receive vast unearned income. If most of inter-generation wealth was highly taxed then maybe one day tax on earned income could be a thing of the past.

September 25, 2021

"many receive vast unearned income": Earned by tasking risk and taxed as income. "If most of inter-generation wealth was highly taxed": The owners and their capital would migrate to fairer tax climes.

SMSF Trustee
September 26, 2021

It IS John. The instant an asset passed to the next generation is sold it triggers capital gains tax, with the only exception being if it's the principal residence and the person who inherits it sells it within 2 years of the death.

A lot of people commenting here would do well to check a few facts before expressing their emotional, but incorrect, arguments!

Bob the builder
September 28, 2021

I'm not going to put in writing because I am not yet retired and do not wish these closed to me. but SMSF Trustee, there are plenty of ways to pass assets on without triggering CGT. If you are wealthy you are well aware of these already, and if not, you have a poor tax/legal advisor.

SMSF Trustee
September 29, 2021

Not if the asset is sold, Bob, which is the situation my comment related to. Read the ATO website. Don't need an advisor to do that. No need to be insulting, mate.

Garry Bowden
September 23, 2021

Well, the comments regarding greedy & self centred politicians are well founded. Further discussion on the taxation, asset testing and pension eligibility for the general population should be shelved pending a review of politicians 'special' entitlements and privileges. Entitlements such as gold cards, supported offices and travel after they leave political life should cease. Why are they not subject to a preservation age for accessing their superannuation? Why do former Prime Ministers continue to reap special privileges for many years after they leave office and indeed into their retirement years; this is a multi million dollar liability to the Australian econkmy. Stop these roots first and let's see some real leadership before we continue any further discussion about how we should impact ordinary hard working Australians.

September 24, 2021

Politicians have many benefits when employed in the government which at times lead towards a serious job once they leave government so all gold cards etc should end
What's good for the general public should be good for ex government Politicians with no handouts,
Cancel all travel expenses for them or there families

September 26, 2021

Andy is spot on, ALL politicians should be held to the same standards as Australian taxpayers. Exceed your claims (ie. allowances, accommodation etc) then pay back the disallowed claim plus a penalty of the same amount of greater - just as audited taxpayers must do. Dishonestly claim on multiple occasions - no longer fit to hold office.

Politician pay should be indexed to the average pay rises experienced by all Australians - not a guaranteed increase every year.

Politicians superannuation should be paid at the same rate as most other Australians - the superannuation guarantee rate and politicians should all be enrolled in an accumulation fund - no more defined benefit or lifetime pension at the taxpayers expense.

Andrew Smith
September 25, 2021

Apparently LNP MPs have rates of investment property ownership well above those in society......

November 02, 2021

Here here great comment mate on the politician's, too highly paid while working and still receiving benefits when they leave No No No. We hard working people, paying their way, taxes, private health and on it goes should be able to leave something to their children with no penalties. This gives people the incentive to have a go, the Aussie way. More and more it seems people are going on the dole as they know they will get looked after by the people who work. Soon there will be no workers and where is the money going to come from then. Leave our retirees alone. Thanks Meg

Tom Harbrow
September 23, 2021

I believe at some stage many years ago Greece had a system where EVERYBODY received an age pension which done away with the ultra expensive and over complicated rules dreamt up by self serving bureaucrats which generally made it hard for everyone to claim, the idea was that people who didnt need it would mostly have it clawed back by the tax system and save massive administration costs borne by the taxpayer.

SMSF Trustee
September 23, 2021

Yes, and it bankrupted the country.

September 23, 2021

hasn't bankrupted New Zealand which has a non means tested age pension.

SMSF Trustee
September 23, 2021

Jesse a completely different level of generosity to the Greek one. No comparison. Had Tom mentioned NZ I'd have said nothing.

Steven Davison
September 25, 2021

This is a no brainer. Let everyone over 67 get the pension but make it assessable as income. No expensive admin expenses.

September 23, 2021

Pensioners in their owned home are there because they worked throughout their life, made sensible decisions and often sacrificed or went without. They could have rented, sat around drinking, gambling, living off unemployment benefits like some, but didn't. Why should those with their own home be levelled with those who haven't. This is a free society not a communist regime. You will also find those with homes will have other declarable assets which reduces their pension. Those who don't own a home are likely to have less declarable assets and will receive a substantially larger pension.

September 23, 2021

Geoff, your heartfelt plea to retain both your wealth and your pension, overlooks the fact that there are many people who choose to accumulate their wealth in other ways. Those that worked throughout their lives, made sensible decisions and often sacrificed or went without to build up their business or superannuation balance, find that because their wealth is not warehoused in the family home, their age pension is reduced or eliminated.
The fact is, the family home has value that could/should be used to pay for your old age, just like wealth held in other forms. It certainly has value (tax-free) to your beneficiaries on your death after the taxpayer has paid your income for 25 years in retirement. Some would call that a protection racket.

September 25, 2021

Spot on. It also encourages people to invest in non productive assets like a home rather than productive assets like industry and farms. Also pushes up house and land prices.

September 23, 2021

I agree why should pensioners who own their own home be targeted.
You work all your life pay your taxes do the right thing and save . To enjoy your remaining years.
People who have never saved or had a goal in their lives should not criticise those who did.
Our constitution dictates that as Australians we should be giving a fair go.
And that means our house and the blood sweat and tears that we put in obtaining that and our savings should not be infiltrated.
We the people elect the government to do the right thing by us.

September 24, 2021

Why is a home treated as a non asset when determining whether a person gets a pension.
It can't be fair that a person with a $ 10mil home gets a pension when a person with a
$ 2mil home and a $1mil in super doesn't get a pension - how is that fair?
The the person with the $10 mil home dies and the kids inherit - pay no tax whists for 25 years the government paid their parents a pension - this doesn't seem fair

September 24, 2021

"person [1] with a $ 10mil home gets a pension when a person [2] with a $ 2mil home and a $1mil in super doesn't get a pension" ..."doesn't seem fair":

That's because it's silly.

Both have the option of receiving the full Age Pension.

Couple [1] have twigged.

Couple [2] can withdraw all super, stuff all but $405,000 in home improvements and invest the remaining $405,000 as individuals earning $20,000 / y and receive Age Pension $40,000 / y.

$60,000 / y tax free, rent free and capital gains of about 6% / y, tax free.

September 25, 2021

correct Giuseppe. but the gov says "no-one should be better off in retirement " Ms Jane Hume. does that mean they just want to rip everything out from under us?? it seems others, want to take others"inheritance" for the good of themselves, when they didnt work for it. What about the farmers, where the families worked, didnt get paid and then will get their inheritance , like they should !! it seems others want that too !! i say get a job,a nd do the hard yards. leave others alone, and stop whinging about the pension rates, when you've already lived iot up, like the gov says we should......

Leila Carroll
September 28, 2021

Such unfairness in our system.
If you have invested outside the super system
and are self funded, and do not live in an expensive house, you are ineligible for an aged pension. Wrote to Jane Hume about this very issue of having to pay capital gains on investments outside super. Received the typical politico reply - hot air.

September 24, 2021

My parents worked so and now Centrelink decided that she is not entitled to her pension at the age of 92 because she owns one house
AND SUDDENLY NO PENSION at the age of 92
THANK YOU VERY MUCH CENTRELINK As they say a Fish stinks from the head

September 28, 2021

Trouble is Geoff is that in Sydney and Melbourne where a large chunk of Australians live and work, you can have a typical couple getting up 5am for difficult jobs every morning and living the frugal life for years to save up the deposit and then service the enormous mortgage that will take decades to get under control. On top of that they have to keep living frugally to madly invest into aggressive super fund for a self funded retirement. If they can't get on that tax free, un-means tested owner occupier property, they will be getting up 5am for a difficult job every morning and living the frugal life for years to pay rent increasing faster than the average pay rise. They will also have to save even harder to have more into aggressively invested super to fund their continued life of renting. Shame if they split up due to financial stress, get sick or some other bad luck. Living on one income is of the days of old. We are more like the US 10 years ago with two jobs at least. Its not just the old aged pension that is means tested. It is also newstart and the disability pension. The only way to be a dole bludger these days is to own a home.

December 14, 2022

Geoff, my parents did that and have a home in Sydney worth around $2.5m to show for it. My wife's parents did the same thing, but their home in a regional centre is worth around $450k. Both cost similar amounts at a similar time. A large part of my parents' wealth is therefore not hard earned but due to various factors outside their control that have seen capital city house price increase at a far greater rate than those in regional and rural cities and towns. Excluding the family home means the Government (taxpayers) are paying my parents so they don't have to negatively gear and chew up my inheritance. That seems wrong.

John Pracy
September 22, 2021

The aim should be to provide equity between homeowners and non-homeowners.
At the moment it is highly inequitable when assessing eligibility for the pension.
A starting point would be to include the family home in the assets test and raise the assets test limits to a liability neutral position for the age pension costs of the Government.
Any future tweaking would then be equitable between homeowners and non-homeowners.

September 22, 2021

"The aim should be to provide equity between homeowners and non-homeowners.":

The most equitable would be one Age Pension payment rate for all - including those who paid for it all.

Has the advantage of no rule or tax dodgery.

September 26, 2021

So what people are saying is that that an average person that works all his life buys and owns a house should have his/her house classed as an asset and loose part pension and the other average person wastes his/ her money on smokes and alcohol has not allowed for their future should get the full pension. Do people think that’s fair

Graham Hand
September 22, 2021

Really, Dudley. 'Downside to below the threshold' ... so they sell their $4m house and buy a $1m apartment and spend $3m on international holidays? Don't think so. In any case, it would release a large home for the next generation of families.

September 22, 2021

"so they sell their $4m house and buy a $1m apartment and spend $3m on international holidays?":

That's the incentive that would be created by such a government policy.

The law abiding spenders would spend like lions until the money exhausted then cast their ruined bodies on the mercy of the state.

The spending disinclined would 'holiday' in 'expensive' 'tax havens'.

New Zealand would be a 'semi-tax haven' refuge where tax refugee Australians can access their universal Age Pension.

Muhammad Malik
September 22, 2021

Pension should be universal like New Zealand.The idea of taxing the baby boomers again for being prudent with their money will only result in future generations never save again.Mind you these so called wealthy old people are now living in some suburbs which were not that posh and we're often working class suburbs of those days eg Carlton and Brunswick in Melbourne. Redfern in Sydney but being close to city has risen in value but owners are still cash poor.

September 22, 2021

I heartily concur with these comments regarding the value of elderly people remaining in the areas they have reared their families. The stress of moving, new medical and caring regimes, loss of friends and familiar associations, can increase the deterioration due to the myriad age related illnesses, dementia especially. The amount saved is negligible compared to the medical costs involved.

September 22, 2021

I have no problems with people who lived for ages in their home - which has now appreciated in value - keep living there and get the age pension as well. Regardless how high the value of the house. However, neither the age pension nor superannuation have ever been intended to be a vehicle to manage an estate or even increase its value. So in my opinion, yes, by all means get the pension but once the house is sold, gifted or goes into an estate then the amounts received should simply be paid back from the proceeds of the house.

Richard Ohea
September 22, 2021

I have no problem with this so long as politicians are treated the same the problem is these money grabbing politicians are throwing our money around and we are left to pay the price why don't these politicians come under the same rule as us they are paid well over what they are worth if they knew how to manage money we would not be in this mess where the family home is taken as an asset we should be given the same rights as politicians which will never happen the bottom line is we can not afford these politicians.

September 23, 2021

This is an excellent idea. I have friends who intend to sell all their assets when they get to pension age and purchase a wildly expensive home. Perhaps knowing their estate will be liable to pay back the pension they received will make them think about this strategy differently. Realistically it should apply on the deaths of everyone. Centrelink income support payments should be refunded out of the estate.

September 23, 2021

"Perhaps knowing their estate will be liable to pay back the pension they received will make them think about this strategy differently. Realistically it should apply on the deaths of everyone. Centrelink income support payments should be refunded out of the estate.":

So, the task would become how to avoid death duties rather than how to avail of Age Pension. Makes illegal behaviour more rewarding.

September 23, 2021

I as a single woman with multiple properties nearing retirement completely agree. I worked for mine my wealthier friends will largely inherit theirs having worked very little. A death tax is not a bad idea, we should all be philanthropists

September 23, 2021

Vast difference between city and rural property valuations.

Jenny Watkins
September 22, 2021

Perhaps it is already in the survey which we missed but I know from my friends that if they still live in the family home after decades they will probably be in a high value neighbourhood but they may be cash poor. That neighbourhood also will most likely provide their long term social, transport, care and medical support needs and most probably be more easily accessed. The costs of moving to new premises will erode the capital gain made from selling, increase their personal stress with medical repercussions, and increase the cost of their care through (often) reduced access to all of the care benefits already established. Do not underestimate the value of easily accessed public transport to the elderly. That the capital gain may then be able to provide capital to access total institution care for the last few years of their lives should not be underestimated. The costs to the individual and society in general of forcing people to downsize should not be underestimated. There is also the social/political question of if the high value asset is sold, is the government then going to prevent people from gifting their children (as it does now for a pension) or spending on items the government thinks unnecessary. At what point do we surrender our assets to Government control? There is a fine line between paying for your pension for social equality and Government taking complete control of your ability to make decisions about your own assets. At what point will future generations consider it's not worth gathering assets? Don't forget when these so called wealthy baby boomers begin to pass on what is left of their assets to their children, that money then reenters the taxation environment and will begin to pay dividends for the Government again.

Phillip Harris
September 22, 2021

Cannot agree more with Jenny Watkins. People who live in more wealthy suburbs should never have to sell their home property in order to qualify for the aged pension. It would be very rare indeed for such people who have owned and lived in these suburbs to not have considerable assets outside their family home. However I do think that when their property is passed on to their beneficiaries then tax in the form of a death duty should be applied to these properties and of course all other properties.

Neil Cox
September 22, 2021

Thank you Jenny, well said.
I feel this whole exercise is more about forcing people to spend more than they want to and to so reduce the ability to get any form of pension.

Graham Hand
September 22, 2021

Please read the original article, for all these people saying old people should be able to stay in their homes. Nobody is suggesting otherwise. The proposal is for a clawback of pension payments from the estate when the house is worth over a threshold amount. Many pensioners can live better by drawing more than the age pension. Why live frugally and pass such a valuable asset to the kids? They will still receive most of it.

September 22, 2021

"The proposal is for a clawback of pension payments from the estate when the house is worth over a threshold amount.":

That would change the goal from:
* 'stuff all but $405,000 in the home'
* 'downsize to below the threshold and spend all but $405,000 on international "holidays" to tax havens'.

Sophie Kocev
September 23, 2021

Well said Jenny Watkins!!!!

September 25, 2021

The government recently revised the Pension Loan Scheme. This is available to all individual of aged pension age. Surely there is some way to manage this system to ensure the family are able to remain in the family home and draw a comfortable retirement income and upon the death of the last survivor any outstanding balance can be recovered. Put in place some reasonable limits so as to not disadvantage individuals but super has limits of $1.7m tax free pensions and tax on taxable benefits to non dependants of 15% plus Medicare.


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