THE Retirement Living Council (RLC) has labelled the 2025 Federal Budget a “missed opportunity” to respond to Australia’s housing supply and aged care crisis.
Treasurer Jim Chalmers declared the Australian Government was “tackling housing shortage from every responsible angle”, but crucial reforms to free up 59,000 homes for young families across the nation have been overlooked.
The Budget comes just after the release of new Australian Bureau of Statistics (ABS) population data, which revealed a 9.13 per cent increase in the number of Australians aged 75 and over – equating to 181,339 more people in this age cohort than at the same time last year.
“When Australia is confronted by overwhelming demographic changes, we need a Budget blueprint that appropriately addresses the challenges associated with an ageing population,” RLC Executive Director Daniel Gannon said.
“This Budget does not speak to these challenges.
“Australia is ageing, retirement villages and aged care facilities are operating at full capacity, ambulances are ramping at hospitals bursting at the seams, and housing supply is in deficit. This means that business as usual policymaking just isn’t going to cut it anymore.
“If the Government is committed to tackling housing shortage from every possible angle, it would remove the financial barriers associated with ‘rightsizing’.”
With the number of older Australians surging, the RLC’s Budget submission – pointing to new research, Removing Rightsizing Roadblocks: Homes for all Australians – proposed reforms to the Age Pension assets test and Commonwealth Rent Assistance (CRA) eligibility.
Over a 30-year period from 1994 to 2024, capital city median house prices increased by almost 600 per cent over while the allowable assets to receive a full Age Pension increased by only 178 per cent for a single homeowner and 193 per cent for a couple.
Similarly, in 1997, the CRA cap covered 55 per cent of the median house price, but today it covers just 26 per cent.
The RLC called for crucial reforms to:
- Allow single homeowners who ‘rightsize’ to own assets of up to $550,000 before their Age Pension income is reduced, with an equivalent increase to the threshold for couples. The current threshold is $314,000 for singles.
- Remove the incoming purchase price threshold for Age Pensioners who ‘rightsize’ into retirement villages to allow access to CRA payments, consistent with eligibility applicable to residents in other seniors’ communities (land lease and manufactured home estates). The current cap is $252,000.
Although CRA has not been broadened to include older Australians who move into retirement villages, there have been back-to-back increases for those eligible.
“This is a missed opportunity at such a critical time, and disappointing to see much-needed reforms to the Age Pension and eligibility for CRA skipped over,” Mr Gannon said.
“These initiatives have significant potential to free up tens of thousands of homes for young families, addressing chronic supply shortages, while supporting older Australians into age-friendly housing without financial penalties.
“Housing markets have evolved significantly, yet the Age Pension assets test and CRA eligibility criteria remain frozen in time, effectively locking older people into homes that no longer suit their needs while also preventing young families from buying into the market.
“This comes at the same time that there is incredible angst across the sector relating to the July 1 commencement date of the new Aged Care Act and proposed liquidity ratios that will lock up hundreds of millions of dollars that could otherwise be invested in new housing supply.
“Disappointingly, and unlike last year, no additional funds have been dedicated to Home Care packages when we know there is a backlog of more than 80,000 people waiting for funding.”
