AFTER a year of COVID-driven heartache, local pensioners have reacted warmly to two key changes to superannuation in the Federal Budget.
The headline announcements on super will:
- Widen the window on when older Australians can sell the family home and put some of the proceeds into their fund, and;
- Remove the 'work test' for some seniors who want to make voluntary contributions to their super.
Kempsey Macleay Pensioners president Maureen Mavin said the changes would suit some who were looking to downsize their home.
"For most pensioners the changes won't worry them. Lots of people are comfortable with where they live," Maureen said.
Judy Stokes, an officer with the now defunct Probus Club of Oxley, was of a similar mind.
"I can't see why people who own their own home and money can't do what they want with it and put it into their super without having to rely on the Government," Judy said.
The proposed change would see a reduction in the age from 65 to 60 to when people can sell their home and put up to $300,000 of the proceeds into super. It's a measure intended to encourage downsizing and free up home equity to fund retirement.
But Maureen and Judy were unsure whether encouraging older people to downsize would free up sufficient housing stock to help young people to get into the property market.
"It's very hard for the young ones, especially in Sydney. I don't know how they are going to do it," Maureen said.
Judy: "My heart goes out to them, it's really tough."
The other significant change to super rules would see removal of the work test for after-tax (voluntary) super contributions.
The current work test prevents people over 67 from contributing to super unless they are gainfully employed for 40 hours in a consecutive 30-day period.
Under the flagged change, people will be able to put savings outside super and financial windfalls such as inheritances and lottery wins into their fund.
"I'm a firm believer in that people should be able to stand on their own two feet," Judy said.
Maureen and Judy said the past year had been particularly challenging for older people - be they pensioners or self-funded retirees.
The pandemic had seen the Probus Club of Oxley disband, although a number of members still meet socially.
"A lot of our members were quite older and we were struggling and COVID was just the final nail," Judy said.
Also making the news
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: