Pensioners assisted by changes to exemption rules on new homes

The Australian Government will extend the exemption period of principal home sale proceeds from 12 months to up to 24 months for affected pensioners from 1 July 2007.

Subject to the passage of legislation, customers who have been forced from their home due to a disaster and have not been able to rebuild or repair their home within 12 months will also benefit from the changes.

Under the current social security rules, if a pensioner sells their home, or if their home is destroyed, and they have not rebuilt or repaired their home, the proceeds and the unfinished home are exempt from the assets test for a period of 12 months.

‘The Government has decided to extend the exemption period from 12 months to up to 24 months which will assist those who cannot complete the construction of their home due to factors beyond their control,’ Acting Families Minister John Cobb said.

‘This new measure comes particularly as a result of monitoring of the recovery efforts from Cyclone Larry and recognises the difficulty some pensioners might experience where there are unavoidable construction delays.’

‘This measure recognises that the intensity of rebuilding efforts for large scale natural disasters exacerbate demands on skilled labour and results in slow construction times.

‘Rather than restrict the measure to disaster affected regions the extension of the exemption is a comprehensive approach that will assist pensioners throughout Australia who are having difficulty purchasing, constructing, or rebuilding their home.’

‘While the measure will start from July 1 2007, the Government understands that there will be a small group of people within the Cyclone Larry area who might need assistance after the expiration of the existing 12 month exemption period on the anniversary of Cyclone Larry in March 2007. As an interim measure, where and if required, provision for ex gratia payments will be made for affected pensioners.

‘This is another example of the Howard Government supporting our senior Australians. This year the Australian Government expects to spend around $22 billion in Age Pension for around 1.9 million people – up from around $12 billion in 1995-96.

‘The Howard Government has also increased incentives to save for retirement. Superannuation has been reformed and the pension assets test taper rate will be halved from 20 September 2007,’ Mr Cobb said