Increasing your Age Pension entitlements by renovating the family home Jeremy Cooper, Challenger’s chairman of retirement income, explains how home improvements can boost your government entitlements.
W
ith your house being such a foundational part of any retirement income decision, it’s important to remember that it’s not usually considered an assessable asset when determining Age Pension entitlements. Therefore investing in your home could help boost your Age Pension. Consider some of these numbers. The total value of housing across Australia is heading towards $8 trillion. That’s about 10.6 million dwellings that are worth, on average, a bit more than $700,000 each1. In fact, the average is now probably more given the surge in prices during the autumn auction season. Low interest rates have underpinned strong demand for housing over the past six months. Auction clearance rates have been sitting around
the 80 per cent mark in recent weeks – higher than usual – and the four big bank chief executives have forecast price rises of at least ten per cent this year2. Of course, there are big discrepancies between the city and the bush, between (and within) capital cities, between houses and units. With the exception of inner-city apartments in Sydney and Melbourne, the housing market has been broadly strong. Eight trillion dollars in housing is a lot of value. That’s 266 per cent more than the combined value of super assets in Australia. So it makes sense to put housing and super at the centre of any decision about managing your
1. R esidential Property Price Indexes: Eight Capital Cities, December 2020 | Australian Bureau of Statistics (abs.gov.au) 2. Senate Estimates Hearings, Canberra, 15-16 April 2021
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YourLifeChoices Retirement Affordability Index™ May 2021
