Housing Decisions of Older Australians Assignment

Added on - 28 May 2020

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Running head: PROFESSIONAL PROJECTInfluence of Transfer system and Tax on Housing decisions of older AustralianName of the Student:Name of the University:Author Note:
1PROFESSIONAL PROJECTExecutive summary:Certain housing policies have been taken for the older residents in Australia. It has beenobserve d that the structural concept of housing has been used in Australia for differentpurposes. Housing plays a significant role in the society of Australia. The report containsprescription of different usage of housing. The transfer system and tax impacts on thedecisions made on the housing system and the report has pointed out the older segment on thehousing related decisions. The level of income during the retirement period and the way toimprove the living standard has been provided in this report. Interpretative approach hasbeen made in this research and the data are collected from the secondary sources. Themethodology is based on quantitative research method.
2PROFESSIONAL PROJECTTable of ContentsIntroduction................................................................................................................................3Background............................................................................................................................3Objectives...............................................................................................................................3Research Questions................................................................................................................3Literature Review.......................................................................................................................4Research Methodology...............................................................................................................6Findings from secondary data analysis:.....................................................................................8Theme 1: Age Pension and residence:...................................................................................8Theme 2: Transfer system:...................................................................................................11Discussion:...........................................................................................................................12Conclusion................................................................................................................................16Aim and objectives:..............................................................................................................16Limitation:............................................................................................................................17Recommendation:................................................................................................................18References................................................................................................................................19Checklist:..................................................................................................................................22
3PROFESSIONAL PROJECTIntroductionBackgroundHousing plays an important role towards the ever increasing population of the ageingAustralians. It forms an integral part of the economy of Australia and is a major part for thewellbeing of the individuals. Moreover, it serves as a basic need of human beings for shelterand contributes to the psychological, physical as well as emotional security. It acts as a keydeterminant of the individual’s financial security and wealth in the old age. Housingdwellings and land attributes for more than 50 percent of the total domestic assets and twothirds of the Australian home owners (Agnew, 2013). Housing is an essential part ofeveryday life and also, it is considered as a major investment. The ageing population ofAustralia and ever growing longevity, as well as the demographic and structural changes haveelevated the policies and helped in driving the decisions of the older people (Barrett et al.,2015).ObjectivesThe purpose of this report is to discuss about the influence of transfer system and taxon housing decisions of older Australian. The overall study aims to explore those drivers ofthe changes in their decisions and the barriers which affect better outcomes. In addition tothis, the report also provides information regarding the future public policy decisions. It hasbeen evident from leaked sources that older Australians like to have their own homes than theyounger ones and their standards of living are more dependent in nature. The quality as wellas the location of the housing highly influences the physical as well as psychological healthof the older segment of the society (Burke, 2012).
4PROFESSIONAL PROJECTResearch QuestionsThe purpose of this report is to;Analyze the scope of increasing the standards of living of the older Australiansthrough availing the equity of the overall family income in order to back theirincomes up at the retirement period.Analyze how the transfer system and tax influences the housing decisions of the olderAustralian.Provide some recommendations on how the living standards could be improved.Literature ReviewAccording toChomik & Piggott (2014), housing is an integral part for the wellbeingof the individuals, especially for the older segment of the society. For the majority of theolder people, home ownerships provide independence as well as security at the time ofretirement. The older Australians strongly prefer residing in their family homes, although thecommon notion is that such residences are comparatively bigger in size. Majority of the olderAustralian’s assets is in their family homes; however, it remains an unexplored source ofincome during the retirement period. On considering the influence of tax and transfertreatment of the housing policies, several factors like Age pension, ownership over rentingand others come into play.InYeandle, Kröger, & Cass’s (2012) opinion, the principal residence consist the mostpercentage of wealth of the aged households. Moreover, a majority of the older Australiansprefer relying on Age Pension as the source of income and also some other supports from thegovernment for accommodation and aged care. The way by which residential properties areactually treated by the transfer and tax system offers for both equity and efficiency problems.As perÉgert’s (2013) opinion, the transfer and tax systems have the power to affect the
5PROFESSIONAL PROJECTchoices of the individuals whether to relocate or remain in the current residence. Anotherfactor, that is, drawing on the housing wealth for income also comes into play. In addition tothis, a key indicating factor of the equity and efficiency is the transfer and tax system, as itrelates to the decisions taken for the housing policies. Moreover, it influences the differenttypes of residential tenures and various types of allocation of funds in a neutral manner.Australia’s Age Pension is the subject which incorporates assets tests as well asincome. A couple’s or say, individual’s asset and income level highly imfluences their overalleligibility of the pension limit, as well as the amount of their pension entitlements.Juddet al.(2012) mentioned that the asset ranges which are subjected to the asset tests are real estate,life interests, granny flat interests, superannuation investments, financial investments inassets, business assets and income streams. Some assets like principal residence and othersare excluded from the asset tests. In addition to this,Podger, Stanton & Whiteford (2014)commented that retirement village contribution is considered as an extra allowable amountwhich is also excluded from the asset tests. The principal home residing property is notincluded in to the means tests for the majority of the Australian Government transferpayments like Child Care Benefit, Parental Leave Pay and Family Tax Advanatages Part Aand B (Wang, Caminada & Goudswaard, 2012).Moreover,Simpson & Clifton (2016) said that those individuals whose assets or levelof income make them unfit for receiving full age pension entitlements are actually decreasedto some percentage. According to recent researches conducted on this topic, it is evident thatfor the individuals who receive monthly salary beyond the threshold level, their pensionpayments will be reduced by fifty cents. In the year 2013, there were around 2.3 millionpeople receiving pensions in the country of Australia, which roughly representedapproximately seventy percent of the individuals aged sixty five and over. Furthermore,according to leaked information, the assets test is insignificant to those people who do not
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