This bill became law on Nov 29th, 2022.
Welfare & housing
Pensioners and other eligible income support recipients can keep money from selling their main homeThe home a person lives in as their main residence, which is the property this bill is about. out of the assets testA means test that checks a person’s assets to decide how much pension or other income support they can get. for up to 24 months while they buy, build, repair or renovate a new main homeThe home a person lives in as their main residence, which is the property this bill is about. under both social security and veterans payment rules.
Selling a home could still cut pension payments because sale proceeds were only exempt from the assets testA means test that checks a person’s assets to decide how much pension or other income support they can get. for 12 months and were still deemed to earn income. This bill extends the exemption to 24 months, with up to 36 months in some cases, and applies only the lower deemingA rule that assumes financial assets earn a set rate of income, even if the money is not actually earning that much. rate to those proceeds.
Before this bill, pensioners who sold their main homeThe home a person lives in as their main residence, which is the property this bill is about. to move could lose part of their payment because the sale proceeds were exempt from the assets testA means test that checks a person’s assets to decide how much pension or other income support they can get. for only 12 months and were still deemed to earn income while they looked for, built or repaired a new home. As rising prices, a tight housing market, supply chain disruption and labour shortages made downsizing take longer, the bill extended that exemption period and softened deemingA rule that assumes financial assets earn a set rate of income, even if the money is not actually earning that much. on the proceeds, then became law in November 2022.
The main criticism recorded is that the bill was too narrow, because it improved downsizing rules without addressing the bigger problem of income support payments staying below the poverty line. That concern appears to have been limited rather than broad, with Senator Janet Rice moving a second-reading amendment in the Senate and no party represented in the debate opposing the bill itself.
Hon Amanda Rishworth MP introduced this bill. It passed on the voices.
Did it become law?
Yes
Became law 29 Nov 2022
Final passage
Passed without a counted vote
1 recorded amendment or procedural vote was found, but no counted vote on the bill itself was recorded.
Passage speed
83 days
From introduction to the latest recorded parliamentary step
Meaning
Pensioners and other eligible income support recipients can keep money from selling their main homeThe home a person lives in as their main residence, which is the property this bill is about. out of the assets testA means test that checks a person’s assets to decide how much pension or other income support they can get. for up to 24 months while they buy, build, repair or renovate a new main homeThe home a person lives in as their main residence, which is the property this bill is about. under both social security and veterans payment rules.
People using sale proceeds for a new main homeThe home a person lives in as their main residence, which is the property this bill is about. can get up to 12 extra months in special circumstances, so the exemption can last as long as 36 months.
Money from a sold main homeThe home a person lives in as their main residence, which is the property this bill is about. that is being held for the next main homeThe home a person lives in as their main residence, which is the property this bill is about. is counted separately from other savings, and only the lower deemingA rule that assumes financial assets earn a set rate of income, even if the money is not actually earning that much. rate is used when working out income support payments.
The new rules apply to sales of a person’s main homeThe home a person lives in as their main residence, which is the property this bill is about. that happen on or after the ScheduleThe part of the bill that contains the actual legal changes, and whose commencement date controls when the new rules start. starts.
The amendments in Schedule 1 (items 7 and 8, and 15 and 16) will extend the assets test exemption for principal home sale proceeds intended for the purchase of a new principal home from 12 to 24 months (or up to 36 months by determination of the Secretary) under the Social Security Act 1991 and the Veterans’ Entitlements Act 1986.Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) explanatory memorandum
These amendments will treat assets test exempt principal home sale proceeds as a separate pool to the individual’s or couple’s other financial assets for the purpose of calculating deemed income. Only the below threshold rate will be applied to these proceeds for the duration of the assets test exemption. These amendments also extend the assets test exemption period from up to 12 months to up to 24 months. A further 12 month extension will continue to be available on a case-by-case basis in extenuating circumstances.Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) explanatory memorandum
The amendments in Schedule 1 (items 1 to 6, and 9 to 14) will assess the deemed income on proceeds from the sale of the principal home at the below threshold deeming rate, during the period when the sale proceeds are exempt from the assets test.Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) explanatory memorandum
The amendments made by this Schedule apply in relation to the sale of a person’s principal home that occurs on or after the commencement of this Schedule.Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Act 2022 final Act text
Context
Before this bill, pensioners who sold their main homeThe home a person lives in as their main residence, which is the property this bill is about. to move could lose part of their payment because the sale proceeds were exempt from the assets testA means test that checks a person’s assets to decide how much pension or other income support they can get. for only 12 months and were still deemed to earn income while they looked for, built or repaired a new home. As rising prices, a tight housing market, supply chain disruption and labour shortages made downsizing take longer, the bill extended that exemption period and softened deemingA rule that assumes financial assets earn a set rate of income, even if the money is not actually earning that much. on the proceeds, then became law in November 2022.
Government says existing downsizing rules are cutting pension payments
When the bill was introduced, the government said older Australians could be penalised by social security means tests when selling a home to downsize, especially amid rising prices and cost-of-living pressure.
Hansard ↗Tight housing supply and building delays make the old 12-month limit harder to meet
Speakers backing the bill said scarce housing, supply chain problems, labour shortages and rising building costs were making it harder for pensioners to buy or build a replacement home within the old exemption period.
Hansard ↗Parliament passes the bill
Both houses passed the bill, clearing the way for a longer assets-test exemption and lower-rate deemingA rule that assumes financial assets earn a set rate of income, even if the money is not actually earning that much. for sale proceeds being set aside for a new main homeThe home a person lives in as their main residence, which is the property this bill is about..
Parliamentary timeline ↗Royal AssentThe formal approval that turns a passed bill into an Act of Parliament. turns the changes into law
Royal AssentThe formal approval that turns a passed bill into an Act of Parliament. completed the process so the new rules could apply to eligible main-home sales from the scheduleThe part of the bill that contains the actual legal changes, and whose commencement date controls when the new rules start.'s commencement.
Parliamentary timeline ↗Legislative route
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The bill reached this recorded parliamentary step.
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The bill reached this recorded parliamentary step.
Reported from Federation Chamber
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Referred to Committee (28/09/2022): Senate Community Affairs Legislation Committee; Committee report (20/10/2022)
Referred to committee
APH bill page notesThe bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Introduced and read a first time
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Second reading moved
The bill reached this recorded parliamentary step.
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Second reading agreed to
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Third reading agreed to
Both houses passed the bill in the same form, completing parliamentary passage.
Finally passed both Houses
The Governor-General gave Royal AssentThe formal approval that turns a passed bill into an Act of Parliament., turning the bill into an Act.
Key criticism
The main criticism recorded is that the bill was too narrow, because it improved downsizing rules without addressing the bigger problem of income support payments staying below the poverty line. That concern appears to have been limited rather than broad, with Senator Janet Rice moving a second-reading amendment in the Senate and no party represented in the debate opposing the bill itself.
No significant broader public case against the bill is recorded so far.
Too narrow to address pension adequacy
The only clear criticism on the record was that the bill tinkered with downsizing rules while leaving the larger problem of inadequate income support untouched, so pensioners could still face poverty even if moving home became easier.
Further sources
Votes
The bill passed both chambers on the voices. The counted divisions below were about amendments or procedure, not final passage.
House agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Senate agreed to the bill's third reading on the voices, so there is no list of individual Aye and No votes for final passage in that chamber.
Passed on the voices
In a voice vote, members call out Aye or No and the presiding officer judges which side has it. Individual names are only recorded if a formal division is called.
Recorded amendment and procedural votes grouped by chamber. Expand a vote to see the party breakdown.
Senate
Defeated 15 to 25. Support came from Greens, Jacqui Lambie Network, and minor parties and independents. Opposition came from Labor, Liberal Party, and Nationals.
The amendment was defeated, so the bill proceeded without the Senate adopting the Greens' call for broader income support increases.
These are amendment votes, not the final passage vote on the bill itself. The bill passed both chambers on the voices.
Parliamentary debate
Start here — lead voices
Rishworth strongly supports the bill, saying it fulfils an election commitment and removes barriers that discourage pensioners from downsizing by easing the assets testA means test that checks a person’s assets to decide how much pension or other income support they can get. and deemingA rule that assumes financial assets earn a set rate of income, even if the money is not actually earning that much. treatment on home sale proceeds.
Read in Hansard ↗Garth Hamilton supports the bill and says it will help older Australians downsize without being penalised financially.
Read in Hansard ↗Henry Pike says he will support the bill because it removes barriers that stop pensioners from downsizing, helps older Australians keep more of their payments, and may free up homes for younger families.
Read in Hansard ↗Sam Birrell supports the bill, saying it removes disincentives for older Australians to downsize and will help housing availability, affordability and regional communities.
Read in Hansard ↗All speeches by bloc
2 speakers · 2 support
“This bill delivers on an important election commitment of the government to provide real support to older Australians confronted by the challenges of rising prices and soaring cost of living. It delivers amendments that will remove a potential barrier to pensioners downsizing their principal homes by reducing the impact that this has on their social security means testing.”Read the full speech in Hansard ↗
“I rise to speak today in support of the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022. This bill is another example of the Albanese Labor government putting legislation before this parliament to fulfil a commitment made to the Australian people before this year's federal election. This bill is one that many, particularly seniors lobby groups, have been crying out for for some time. This bill sensibly aims to reduce the impact and therefore a potential impediment for someone on income support payments thinking of selling one family home and buying a new one without falling foul of the assets test for an increased period of time.”Read the full speech in Hansard ↗
14 speakers · 14 support
“I very much support this bill to amend the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to support pensioners and other eligible income support recipients during the sale and purchase of a new home. I do so because this builds on a body of work, begun while the coalition was in government, to give older Australians greater options and flexibility when it comes to downsizing.”Read the full speech in Hansard ↗
“This bill is in the best interests of my constituents in the Redlands, and I will support it. But this parliament must remain diligent to ensure that this Labor government will implement this bill exactly as intended.”Read the full speech in Hansard ↗
“This bill, by removing disincentives for older Australians to downsize, will allow people to make decisions about their family home without the burden of financial uncertainty and will have positive flow-on effects for the economy, housing availability and affordability and, based on current population shifts, for communities across rural and regional Australia. It's good policy—good coalition policy—and I'm happy to add my voice in support of this bill.”Read the full speech in Hansard ↗
“As I say, we support this bill before the House. We support these amendments. The bill amends the Social Security Act 1991 and the Veterans' Entitlements Act 1986 to support pensioners or other eligible income support recipients during the sale and purchase of a new home.”Read the full speech in Hansard ↗
“This initiative contained in the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022 was put forward by the coalition. It was a good initiative then, and it's a good initiative now. Given the tightness of the housing market in Australia, the government should respond in this way, and it gives the lie, somewhat, to the general perception of the public that we always disagree on these matters when we get to federal parliament. While the cooperation of the coalition on this isn't necessary, it's good to see the parties working together.”Read the full speech in Hansard ↗
“This bill is very important in providing greater certainty and security to pensioners and veterans, increasing the assets test exemption from 12 months to 24 months. It really does build on the great work of the previous coalition government. The measure will see around 890,000 Australians have greater certainty in their fortnightly social security payments. This will benefit 450,000 age pensioners and 440,000 other payment recipients with financial assets affected by deeming rates.”Read the full speech in Hansard ↗
“This bill amends the Social Security Act and, of course, the Veterans' Entitlements Act to support pensioners even further along with some other eligible income support recipients when they sell and ultimately purchase a new home. This bill achieves that objective by doing two things. I will go into a bit more detail on each of them, but, broadly speaking, firstly, these two things extend the existing assets test exemption for the principal home sale proceeds, which a person or a couple intends to use to purchase a new principal home, from the existing period of 12 months to 24 months, doubling the period in which an eligible person is able to have those sale proceeds of their principal place of residence exempt for assets test purposes.”Read the full speech in Hansard ↗
“Deputy Speaker Stevens, having regard to the time and the opportunity that you've given me to speak to this bill, I want to tell you that I wholeheartedly support the bill and I wholeheartedly support the process, knowing that housing has been the most important economic stabiliser for families across Australia since the Second World War, as well as for those who came here to this nation and had the opportunity to create wealth and to not only own their own home but help their children to own their own home as well.”Read the full speech in Hansard ↗
“As recognised through this bill, encouraging pensioners to downsize from a family home to something smaller, without being financially penalised, will hopefully free up more housing for those seeking to purchase their first home.”Read the full speech in Hansard ↗
“To conclude, I have now spoken on a number of occasions about housing affordability, housing supply issues and providing better choice for Australians. For all of the reasons mentioned, I congratulate the Labor government for adopting this excellent initiative of the coalition, and I reaffirm my support for this bill.”Read the full speech in Hansard ↗
“This bill receives our support because it was our policy, and I compliment the members of the new government on taking up good policy. We're never going to obstruct good policy. But it's copycatting; you've got to admit that. I think I should just give you a quick summary of all the other good things we did in the housing market to help people get into their first home. Property prices are very hard for first home buyers. Whether you're in a metropolitan or rural setting, house prices have gone up incredibly over the last three to four years, and some of them in my area have gone up 30 or 40 per cent. But there are corrections happening in the marketplace as interest rates rise.”Read the full speech in Hansard ↗
“The coalition are supporting this bill, as the measures within it were first announced by us on this side. It does exactly what we committed to do at the last election—that is, to double the asset test exemption to two years when pensioners downsize from their family home, giving them more time to plan their future and, I might add, less lawn to mow. More importantly, we are supporting this bill because it will provide pensioners with the ability to extend from 12 to 24 months their existing asset test exemption for principal home sale proceeds from which a person intends to purchase a new principal home. As the shadow minister has stated, the best way to support older Australians in incentivising them to downsize is to remove the disincentives that exist in the system.”Read the full speech in Hansard ↗
“With that brief contribution, I commend the bill to the House.”Read the full speech in Hansard ↗
“It's obviously hard to regain composure as a collective, and we shall do that now. I'm going to be serious and sensitive now. But this bill, which we support—and I'm almost at the end of my contribution here now; I'm coming quite near to the end of my analysis of this legislation, which is amazing—supports pensioners or other eligible income-support recipients during the sale and purchase of a new home by, firstly, extending the existing assets test exemption for principal home sale proceeds which a person intends to use to purchase a new principal home from 12 to 24 months and, secondly, applying only the lower below-threshold deeming rate to these asset-test-exempt principal home sale proceeds when calculating deemed income, two important elements, and for those reasons the coalition supports the bill.”Read the full speech in Hansard ↗
1 speaker · 1 support
“I also rise to speak in support of the Social Services and Other Legislation Amendment (Incentivising Pensioners to Downsize) Bill 2022. We will be supporting this bill, but it is another very, very, very small step forward for the social services and social security agenda.”Read the full speech in Hansard ↗
Record
House · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
House · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Referred to Federation Chamber
Referred to Federation Chamber
The bill reached this recorded parliamentary step.
House · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
House · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
House · Reported from Federation Chamber
Reported from Federation Chamber
The bill reached this recorded parliamentary step.
House · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Senate · Introduced and read a first time
Introduced
The bill was formally presented to the chamber and read a first time, which starts its parliamentary journey.
Senate · Second reading moved
Second reading opened
A minister or sponsoring member moved the second reading, opening the main debate on the bill's purpose and principles.
Senate · Second reading debate
Second reading debate
The bill reached this recorded parliamentary step.
Senate · Second reading agreed to
Second reading agreed
The chamber agreed to the bill at second reading, meaning it accepted the bill in principle and allowed it to continue.
Senate · Third reading agreed to
Third reading agreed
The chamber agreed to the bill at third reading, which completed passage through that chamber.
Parliament · Finally passed both Houses
Passed both houses
Both houses passed the bill in the same form, completing parliamentary passage.
Assent · Assent
Assent
The Governor-General gave Royal AssentThe formal approval that turns a passed bill into an Act of Parliament., turning the bill into an Act.
Senate Community Affairs Legislation Committee; Committee report (20/10/2022)
Referred to committee
Referred to Committee (28 Sept 2022): Senate Community Affairs Legislation Committee; Committee report (20 Oct 2022)
APH bill page notes
