" The Budget " Judgement !

Millions of Australians will be making calculations on the back of an envelope to see if this weeks Federal budget costs them money - or delivers a saving.  It is hoped that one of the measures will induce the aged still living in a large family home to sell and downsize, freeing up a lot of housing stock that may hopefully ease problems for first home buyers.

Most will not pass judgement until hey have perused the small print, but basically the government is offering a concession that would allow each of a home owning older couple to deposit three hundred thousand dollars of that sale proceeds into their superannuation - without it tripping the usual laws and restrictions that apply.

That couple - or perhaps the one surviving partner - would still pay the Estate Agents commission on the sale of the home and be responsible for stamp duty should they buy a smaller unit, but presumably the means test for the aged pension would still apply.   The main concession here seems to be waiving a law that restricts how much you can deposit into superannuation in your later earning years.

That is certainly an inducement for people with a low superannuation account balance because of interruptions to contributions throughout their working life, but for those who eventually need the services of a nursing home or placement in an aged care village that means test again comes into play when the daily charge for accommodation is determined.

Those fees are not determined by the aged care provider, but by the government and if the means test is unfavourable to the regulations in place daily fees higher than the aged pension apply - and that is an entirely reasonable outcome.   Unfortunately, it is also one of the main reason the elderly are sticking to the free value status of the home they own when it comes to pensions.

Many are "ordinary "people, living in an "ordinary " house in one of Sydney's "ordinary "suburbs who are amazed to find that the home they bought as a young couple for what seems a ridiculous figure today - is suddenly worth more than a million dollars.   They also remember the struggle to pay off that mortgage, on the salary levels current at that particular time.

What frightens them is the prospect of that family home changing status from that of a "protected asset " in pension estimates to a new status where - at the whim of the government and by the stroke of a pen - its value can be taken into account and affect the living standards that apply.   Whatever is being promised today can be changed later by this - or some other government voted into office - if the economic situation changes.

In all probability, the government will need to be very persuasive and offer a lot of iron bound guarantees if they hope that this concession will free up a huge housing component locked away to preserve the state of mind of the elderly.