Pensions and the family home

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There has been much talk in the media about taking the value of the family home into account for pension eligibility purposes. Do you think this is likely?


Think about the practical difficulties of doing it. Every home would have to be regularly valued, and there would have to be weighting given to areas like Sydney where home prices are at record highs. What sort of consideration would be given to those who were asset rich and cash poor? If the rules changed, the media would be full of stories of cash strapped widows living in rundown houses in good suburbs, who would be forced out on the street.

Would people have to resort to reverse mortgages to live, or would they spend up big so they could retain the full pension? Who would pay $600 to have their home valued every five years, and then suffer a drop in the pension if a property boom meant the value of their home had risen?

I think it is most unlikely.