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Our Seniors have struggled for years on the aged pension.
We are all aware of the current Harmer Pension Review and the Henry Tax System Review. Both relate to the need to have a sufficient income in retirement.
In today’s tough economic environment, it is hard to envisage increases to the Aged Pension will be sufficient to bring the lifestyle of our Seniors to the level indicated by the Westpac/ASFA Retirement Standard. So retirees having their only asset in the family home are limited in terms of alternative options for additional income.
An additional $430 per month ($100 per week) will make an enormous difference to Seniors in providing a suitable lifestyle without all the financial stress on a limited income. It may also be enough to pay premiums for Private Health Insurance – and how important is that in later years.
Over the years, properties show a capital growth. The average growth on a median priced house in a capital city is 7.5% (Federal Government Library study 2006). Over time, the net asset value of many homes will still grow with a conservative use of periodical payments from a reverse mortgage. Intending borrowers can access the ASIC reverse mortgage calculator and input various scenarios according to their needs.
When Seniors want to stay in their homes for longer (or forever), the house requires regular maintenance and repairs. The Aged Pension and/or other limited income is not normally enough to meet these costs and this is where a reverse mortgage can assist. According to the Australian Institute of Health and Welfare, the direct cost to the national’s health system to help people over the age of 65 recover from falls was $566m. Seniors must be aware of “safety in the house” and eliminate the dangers where maintenance and repairs have not been carried out. | 
