2nd of December 2016
Seniors need to carefully consider their options under the new Assets Test, says Peter Szabo
MEDIA RELEASE – 2 December 2016
Seniors should consider their situation carefully if they find their Age Pension has been adversely impacted by the new Age Pension Assets Test that comes into effect on January 1, 2017 said Peter Szabo, Managing Director of Homesafe Solutions.
Commenting further, Peter Szabo said, “It’s been estimated that over 300,000 Age Pensioners will have entitlements cut with perhaps as many as 100,000 losing all entitlements from January 1 next year”.
“It is important that seniors affected by the changes to the Age Pension Assets Test should consider their financial position with care and not make quick decisions.
”Potential solutions to the reduction in the Age Pension need to be properly assessed including the role that home equity can have in replacing lost entitlements.”
Home owning seniors especially in Melbourne and Sydney have benefited from the significant increase in residential property values. This untapped source of equity can be used to augment existing sources of income to provide a dignified and financially secure lifestyle in retirement.
Peter Szabo continued, “With so many seniors about to lose or have pensions reduced as a result of the new Assets Test, a number will succumb to temptation, to sell their home and downsize”.
“Homesafe has consistently advocated that decisions to downsize need to consider the emotional cost of moving to a smaller home in an unfamiliar neighbourhood no longer surrounded by familiar faces and social networks”.
It also very quickly becomes apparent that smaller ‘downsized’ homes or apartments may be unable to cope with visits from grandchildren, family and friends – or accommodate the storing of a lifetime of memories in 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”.
“The Homesafe solution has been developed to allow seniors to access the wealth tied up in the home by providing seniors the ability to sell a share of the future sale proceeds for an immediate cash sum”.
“These funds can be used to replace lost pension entitlements, avoid the need to downsize and continue to live in the family home with dignity and financial security”, concluded Peter Szabo.