Op Ed provided by Retirement Living Council Executive Director Daniel Gannon.

Here’s a thought.

What if one of the quickest ways to get more family homes back onto the market was to stop penalising older Australians for leaving them?

Australia talks endlessly about housing supply. Yet government policy actively discourages older people from moving into homes that better suit their needs.

Retirement Living Council modelling shows simple changes to Commonwealth Rent Assistance (CRA) could help more older Australians move into retirement communities and free up family homes for younger buyers.

Daniel Gannon — Executive Director, Retirement Living Council Photo Jeremy Piper /New Romans

No rezonings. No new subdivisions. No decade-long planning fight. Just fix the rules.

Rent assistance is where the problem becomes absurd.

A pensioner entering a retirement village can lose access to CRA if they pay more than $267,000 to move in, which captures 97% of these homes. That threshold doesn’t reflect today’s housing market. It’s a policy fossil.

Worse, similar seniors’ housing options are treated differently. That isn’t smart policy, it’s a penalty for unlocking housing supply.

And when government makes it harder for older Australians to rightsize, the consequences don’t stop at the front door.

Pension, savings and retirement planning with senior couple reading their budget, calculating at a table at home. Mature wife and husband bonding while checking bills, utility and mortgage costs

Australians are being penalised for wanting to stay in their own homes.

People stay in homes that no longer suit them. Sometimes that becomes dangerous.

That matters because Australia is ageing fast. The number of Australians over 85 will triple over the next 40 years, while the aged care system is already straining.

Almost 4,000 Australians are stuck in hospital beds waiting for an aged care spot. More than 100,000 are waiting for ongoing Support at Home funding, while the broader queue for a package or assessment has been put above 200,000.

This is where the contradiction becomes impossible to ignore.

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We financially discourage older Australians from moving into age-appropriate housing, then tell them to remain at home for longer.

For many single older women, the stakes can be even higher – rightsizing should be a pathway to security, not a policy penalty that risks pushing them closer to housing insecurity.

And then we offer the false gift of home care arriving on their doorstep when hundreds of thousands are already ahead of them in the queue.

That’s not an ageing strategy. It’s a holding pattern.

Grandparents greeting grandchildren on the steps of a house

It’s rough on our older Australians, the Retiment Living Council says. Picture: istock

The longer people are held in place, the more pressure builds everywhere else. It’s a policy powder keg.

A large home stays locked up. Families shoulder more care. Productivity falls. Hospital beds stay blocked, and ambulances wait outside.

This is why housing and aged care can no longer be treated as separate conversations.

Remove the barriers and make rightsizing easier.

And let’s be clear, these reforms are not asking Canberra to write another multi-billion-dollar cheque.

Small changes can produce an outsized return.

Rent assistance reform requires targeted investment, but rightsizing could unlock tens of thousands of family-sized homes, generate stamp duty revenue and relieve pressure on hospitals, aged care and public housing.

This isn’t government spending its way out of a housing crisis. It’s government clearing the path.