E&OE TRANSCRIPT
GARY ADSHED, HOST: The New Year, of course we know this is only a few days away and with that comes legislative changes to all sorts of things. One of those of interest to pensioners if they're thinking about downsizing is assistance on its way through a Federal Government initiative. To tell us all about that is Federal Social Services Minister Amanda Rishworth. Minister, thank you for your time on Boxing Day.
AMANDA RISHWORTH, MINISTER FOR SOCIAL SERVICES: Great to be with you.
GARY ADSHED: Now, this will obviously affect many older people who, I mean, I suppose typically have been living in large-ish, you know, the four by two homes on the quarter acre block. Now they're on their own, perhaps they don't need four bedrooms and two bathrooms. So what is the Government doing to smooth that process for pensioners?
AMANDA RISHWORTH: You're absolutely right. A lot of pensioners find themselves that were in the family home, over time that becomes a bit much for them. But there has been a concern that if they were to sell that home while they were looking for another home, they would actually have a cut to their pension because they were deemed to have assets in the bank money and the bank. And of course, we know that the family home is treated under the pension differently to having same money in the bank. So what this change does is effectively say we will treat once you sell your family home while you're looking for another home, we will treat the that money that you've made from that sale for now two years as if you still have a family home. So it will be deemed at a lower rate at only 0.25 per cent and it won't count towards your assets test for 24 months now instead of 12 months. So this is an important change so that pensioners don't feel as soon as they've found their home and sold their home, sorry, and might be looking for a new home that they will be financially penalised as a result. So it gives them a bit of more financial freedom and doesn't put as much pressure on them to buy another home, a smaller home, as quickly as possible.
GARY ADSHED: How does this new legislation affect pensioners who perhaps might put an offer on a smaller home conditional on the sale of their family home?
AMANDA RISHWORTH: Yeah, that I think doesn't really change things for pensioners for that, except the fact that if they were to sell their home and hadn't found another home, that they have the money sitting in the bank would not be, considered and their pension wouldn't be cut. Because that's the big problem here is that if you were to sell your family home and the money was sitting in the bank what might happen is if you couldn't find another place, it would affect your pension and actually have your pension cut. So you wouldn't want that to happen. So that's what this measure particularly is trying to address.
GARY ADSHED: Sounds like it's a long overdue measure. Do you have bilateral support? Not that you need it, but do you have bilateral support on this?
AMANDA RISHWORTH: The legislation just went through the Parliament. All sides of politics agreed that this was a long overdue measure. So that's gone through the Parliament now and it's due to begin on the 1st of January. So it does give that level of security and takes away that barrier for some pensioners that might think, look, this would be a good thing to do, but I could be financially penalised, I could have my pension cut if I, didn't find another home immediately. And so this takes away a bit of that worry. So effectively pensioners will have two years to find another home plus in extenuating circumstances another 12 months. So it gives them a significant amount of time to go and find another home and not be financially penalised as a result.
GARY ADSHED: We're talking of course, about seniors on the aged pension. Does this legislation extend to others who are in receipt of Centrelink benefits who might be thinking about doing exactly the same thing? You don't have to be old to downsize, for example.
AMANDA RISHWORTH: No, you don't. This is particularly though for pensioners. There's a different asset test for people that are on JobSeeker or other sorts of payments, Centrelink payments. So this is specifically for pensioners. As we've seen this as a specific need for them because there is a different, asset test that applies to different payments. This one is particularly for pensioners.
GARY ADSHED: And what does this what will this program cost?
AMANDA RISHWORTH: I don't have the figures in front of me because it is a demand driven program. We don't know how many pensioners will take it up – 8000 pensioners chose to downsize last year, so we're hoping that figure will be higher as a result of these changes. But it does cost the budget obviously because it does means that pensioners don't have their pension cut. But we think this is a really sensible change because pensioners were unfairly being affected as a result of the measures in place.
GARY ADSHED: Minister, I hope you don't mind taking a call from one of our interested listeners. He's Colin. Good on you, Colin.
COLIN, LISTENER: I bought a unit, independent living group. I downsized and through a church group I thought it was. And from that day forth I give them $300,000 and I do not own it. Everything that happens to this place, I'm going to pay for it. The crowd that's managing it, all they're interested in is taking money off you. So I just think this downsizing stuff is a lot of rot when it comes to pensioners Minister.
AMANDA RISHWORTH: I don't know all the details there. Certainly when it comes to downsizing, this legislation doesn't just apply for people that go into retirement style villages. This could be just downsizing from a large family home to a smaller home that you are not part of residential or a retirement village. Retirement villages are largely governed by state government legislation. So I'd be trying to get some advice from your state government about that. But when it comes to this downsizing legislation, it's not just for people who are moving from the family home into, say, a retirement village where there's some sort of management. It could be, for example, just downsizing in terms of a smaller unit or a smaller house that you just own yourself.
GARY ADSHED: Colin, thank you for your question. Liz has one for you, Minister.
LIZ, LISTENER: Good morning. I just want to know if you sell, if you sold your family home and you go into a nursing home, you pay the rate of $500,000 or whatever it is at the nursing home and say you've got $500,000 in the bank…
GARY ADSHED: What is the situation on their pension on that basis?
AMANDA RISHWORTH: This particularly applies to the downsizing when you are purchasing another home. So the rules around the cost of nursing homes are governed by aged care legislation. So this legislation specifically is about downsizing and purchasing another home.
GARY ADSHED: Good on you. Thank you very much indeed, Liz. And thank you so much, Minister, for your time on our morning program today. We do appreciate it. We realise that ministers of the Crown have lives to lead as well. They've got families to interact with over the holiday period. So again, thank you for joining us on the show this morning.
AMANDA RISHWORTH: Not a problem.
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