Seniors to benefit from downsizing
May 27, 2013
As people age, downsizing becomes more appealing.
A smaller home means lower utility bills (less space to light and heat) and less maintenance, like lawns and cleaning.
Yet downsizing is not always a good financial decision. Under the current aged pension means testing rules, the value of the family home is not assessed and does not affect a person’s pension. That is, unless you sell it, which is why many Australians stay in their family home rather than looking for a smaller and more manageable property.
However, a new trial, announced by the Federal Government in last week’s pre-election budget, could change all that.
The Government has committed $112.4 million for a four-year trial that will enable seniors to downsize their home, without it immediately affecting their pension.
From 1 July 2014, eligible pensioners who have lived in their own home for at least 25 years will be able to invest up to 80 per cent of the gain from downsizing, up to a limit of $200,000 in a special account.
The funds in this account will not be counted under the pension income and assets test for up to ten years or until a withdrawal is made from the account.
The Government expects around 30,000 pensioners to take up the offer, which means a lot of people will soon be living with less space. Downsizing can become troublesome when you realise you no longer have the garage or cupboard space you once used for storage of all your possessions.
Containaway is a cheap and reliable option for downsizers looking to store the things they treasure but simply don’t have space for in their new home. We come direct to your door, which means you don’t need to worry about loading a truck or a trailer. Plus, you can save yourself the back-breaking working by choosing to have our experts load the container for you.
With the help of the Federal Government and Containaway, downsizing just got a whole lot easier.