Should older people be encouraged to move?

What to do with “older people” and their fixation for staying put in the home they once scrimped and saved for is fast becoming a topic eliciting any number of open-ended responses, ranging from mob hysteria to downright bizarre.

Government and futurists take what they deem as the serious, sensible approach, quoting predicted future taxation shortfalls, lack of workforce participation and fear, disguised as cost pressures, of the coming hordes of “very old people” ambling over the hill – 400,000 people aged over 100 in 2054/55, compared with just 122 now. Really?

Former Treasurer Joe Hockey has already quoted any number of solid figures from the government’s recently-released intergenerational report, a five-yearly review of the next 40 years. He concluded that if we don’t do something, we risk reducing our available workforce, impacting negatively on growth and prosperity, and our income will come under increasing pressure.

These thinly-veiled scare tactics did little to move the aging masses, mostly because we operate on the principle of ‘Stay Calm and Panic Later’. We’re also acutely aware that parliamentary terms in this country are three years, way too short for politicians to actually do anything, let alone put in place an unpopular long-term strategy which can’t be reversed.

Even as I write this, the revolving door of prime minister-ship has long since slammed on Tony Abbott and ministers such as the aforementioned Joe Hockey, who did nothing to redeem himself by advising first home buyers to “get a good job that pays good money if they want to enter the property market”.

Point 2: The Property Market

It’s hot, as we all know, particularly in the capital cities (which are where most young people want to live). Consequently, they are having difficulty getting on to the property ladder and Struggle Street is overflowing with a backlog of would-be domestic buyers shaking themselves off after being knocked back onto ground level.

As the clawing and scraping intensifies, the glaring problem of illegal foreign real estate purchases and now the glut of Chinese investors propelled by the low Aussie dollar have been consigned to the background of diplomacy. As usual the low-hanging fruit has borne the most savage brunt of revenge attack – oldies! “Why are they still rattling around in their big castles when they should be forced to sell and live in a shoebox so we (the next and instant-gratification generation) can “get on with our lives” – insert raising of eyebrows here.

Parents of all means always want what’s best for their children but this moralistic catch-cry has swept the wide brown land like an all-encompassing dust storm. The only answer for many older folk is to dig the heels in.

It’s pointless to remind kids that we had to save every penny, too, in order to buy a modest house at credit card interest rates – yes, 20% at one stage, suck on that.

Haven’t we already contributed by putting up with way-too-adult children living free at home and taking advantage of Mum’s endless cooking and washing services? Not to mention permanently minding grandchildren to save on daycare fees? Lending our cars, money and clothes in some cases … the list goes on.

Age Discrimination toward larger home owners

When we talk about real estate a classic case of contradiction in terms comes when we count how many bedrooms the house has. For instance, renovators constantly spruik that adding a third bedroom is the best thing you can do if you want to maximise your sale money.

However, the dreaded third bedroom takes on a sinister life of its own if, heaven forbid, the house belongs to an “older person”.

All of a sudden, that third bedroom becomes a weapon to wield against older people who refuse to sell their family home. The language has even been manipulated to suit. It is now considered “overconsumption” for couples to be living in a house that has three bedrooms. But only if you are older. It smacks of age discrimination to me.

The tired old 2011 Census is trotted out to proclaim that almost three-quarters of occupied private dwellings in Australia have three bedrooms or more. Luckily, the 2016 Census is about as far away as the next election so journalists will have some different fodder to chow down on fairly soon.

Getting back to the bedrooms, has the thought not occurred to those who enjoy flinging guilt in the direction of the elders they should be respecting that there are a number of ways bedrooms can be gainfully occupied?  They can be used to house a snoring partner and prevent sleep deprivation. Space for children and grandchildren – oh, and yes, I know it’s surprising but older people do have friends that come and stay. And finally, spare bedrooms make great offices and hobby rooms when the kids fly the coop.

No financial incentive to downsize

Older people looking to relocate to smaller, less-costly abodes come up against the same problem time and time again. The Law of Unintended Consequences swings into action. The family home in this country has always been a highly effective vehicle for accumulating, storing and passing on wealth. It has been a rusted-on view that housing wealth as precautionary savings is only rolled out in extreme circumstances.

The cost of selling a home can amount to tens of thousands. As the home is the primary place of residence, it is exempt from the assets test for the age pension. However, proceeds from the sale of the home are not exempt.

Selling a home for, say, a million dollars and swapping it for a $500,000 unit may well land the older person in pension limbo, with the remaining $500,000 profit expected to be used to fund retirement – sorry, kids, there goes another chunk of the inheritance. In fact, the pension threshold is a nightmare, requiring the finesse of a licensed financial planner to map out a way forward that doesn’t punish older people for saving sensibly over the years.

Add the Mickey Mouse interest available on savings accounts and there’s not a whole lot to get excited about.

In another quirky twist that flies in the face of urging older Australians to sell their homes, the government’s Living Better, Living Longer package is now being rolled out and actively encourages people to remain in their homes with the help of support and services delivered to the home by service providers and, by extension, governments.

It’s not all about the money

Believe it or not, older people are not necessarily permanently welded to a pile of bricks in the same suburb – they are attached to the area, the amenities, friends and neighbours. They are also equally willing to explore other sea/tree-change options to enhance a lifestyle they perhaps could not have enjoyed in previous years.

Freedom or a change in circumstances leads many to the liberating decision to embark on a new adventure. From my point of view, this opening up of choices is a more effective way of encouraging downsizing than the current smear tactics merely for the purpose of putting more housing stock on the market at cheaper prices. It will be interesting to see if this desired result truly is the case in the years to come. The cynic in me is not convinced.

What’s next?

Who would have thought the mood of the mostly-young-capital-city dwellers could turn so dramatically in such a short span of time?  Fuelled by this, we have a government response that I can only term as curiously comical.

Next thing, the government will be suggesting we all work till we’re at least 70 because we won’t be able to access our own superannuation or the age pension until we’ve got one foot in the grave.

Wait a minute – that sounds eerily familiar!

 

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