Struggling seniors face hard times with new scheme
STRUGGLING seniors could be hit hard in the back pocket if they buy into the Government's proposal to assist them to move out of the family home.
The Turnbull Government introduced a scheme in this year's budget that offered incentives to sell their homes and move into a smaller residence.
However, the measure, which will allow people aged 65 or more to invest $300,000 from the sale into superannuation, could leave less-wealthy seniors on the outside looking in with a person's super expected to have a major impact.
Verante Financial Planning principal Liam Shorte said the scheme didn't "pay off" for retirees finding it hard to make ends meet.
"I don't think this is a strategy for anybody who is on the age pension because money going into super is going to be counted towards your asset test," Shorte told Seniors News.
"I just don't think it is going to pay off for anybody who is currently receiving an age pension."
However, on the flipside, the proposed changes are a massive boon for wealthier elderly Australians with any earnings on the superannuation dump tax-free after retirement, and any additional money exempt from existing limits on superannuation, including the $1.6 million balance cap introduced in the last budget.
"It's really suited to those people who are above the age pension limit and have a lot of assets outside of super and are therefore paying a lot of tax in their personal names," Shorte said.
"It's an opportunity for them to lower their personal tax."
Despite the negative impact on some seniors, Shorte said the changes were still a good option, for some.
"I think it's a good option to give to people, especially those who didn't receive the full benefit of the superannuation system," he said.
"The superannuation system stared in the 90s and a lot of people missed out on the opportunity of getting some money into super."