Accessing SGL Assets for Acquisition of Owner-Occupied Property: Consequences for Australian Households and Government

Abstract

Analysis by Evans & Razeed (2019) showed that to achieve a reasonable standard of living in retirement, in addition to the Pillar 2 compulsory system (SGL), Australians would need to contribute during their working life to private savings, but the contribution would be significantly reduced if there was an owner-occupied property that could be partly converted to income-generating assets in retirement. Given the favourable tax and Age Pension eligibility treatment of owner-occupied property relative to other assets in Australia, the issue arises as to whether or not SGL members should be allowed to access their SGL assets to acquire owner-occupied property. This paper shows that such an arrangement would generally benefit both SGL members and the government, but there is a small possibility of negative outcomes for the government.