Q: We own our own home and have $500,000 in pension assets that count towards the age pension. How would our position change is we downsized and an extra $300,000 into our super fund?

A: If you sell your home and add $300,00 to super you will have your age pension reduced by $23,400 a year. You would have to produce and after-tax return of 7.8 per cent a year on the $300,000 to be ahead of your current position. That’s not an easy task in today’s environment.

Under the new rule announced in the Budget, which takes effect on July 1 next year, a person aged 65 or over will be able to make a non-concessional superannuation contribution of up to $300,000 from the proceeds of selling their home.

These contributions will be in addition to those currently permitted under existing rules and caps, as well as the age test, work test and $1.6 million total superannuation balance test for making non-concessional contributions

A couple with $821,000 of assets, apart from the family home, or a single person with $546,000 may benefit from these changes because they are above the asset test threshold.

The family home is exempt from the asset test for the age pension but super is included.

With the new assets test taper of $3 a fortnight for every $1000 of assets, this works out as a reduction in pension payments of $78 a year for every $1000 of assets, or $23,4000 on $300,000.

Jonathan Philpot is a wealth management partner at HLB Mann Judd Sydney.