The Impact on Residential Choice of the Family Home Exemption in Resource-Tested Transfer Programs

Many countries have policies offering transfers or other entitlements, subject to a resources test. In most cases, these exempt the family home. While the impacts of means-tested programs on saving and labor supply have been extensively studied, exempting the owner-occupier home has escaped analytic attention. We assess the exemption of the owner-occupied home from the Australian age-pension on residential mobility and housing trade-downs. Results suggest that this provision discourages trade-down behaviour.