Mr Frydenberg said: “Accessing small amounts of equity in your home can allow retirees to amp up their retirement income at a time when it suits them and amp it back down when they have more available money.”
HomeSafe Wealth Release, which deals in products similar to reverse mortgages, said the report’s findings were encouraging.
Chief operating officer Dianne Shepherd said accessing the equity built up in the home made sound financial sense.
“Government has an unprecedented opportunity to facilitate greater efficiencies in the equity release market, not only for the benefit of individuals but also the wider economy,” Ms Shepherd said.
National Seniors Australia chief advocate Ian Henschke said one of the main reasons why older Australians did not draw on the wealth in their home was that it was too expensive.
“National Seniors has long been calling on the government to cut the interest rate for the existing Pension Loans Scheme [PLS] which essentially allows people to borrow against the equity in their home. It’s a clear barrier,” Mr Henschke said.
“This scheme is especially important for those receiving aged care, who could be using it to live more comfortably staying in their own home and out of residential aged care.”
The report also noted that the median age of people buying their first home had increased from 24 in 1981 to 33 in 2016, and that some things could be done to improve this.
It noted how early access had been used in other countries with much less restriction.
People need access to equity without compromising the system.
Sahba Abedian, Sunland managing director
“Some countries have a more open approach to early access to retirement savings. For example, in the US there is an option to access retirement funds early without any assessment of need, but the funds released are taxed as income at marginal rates plus a 10 per cent penalty.”
Mr Frydenberg pointed to how the government’s policies were enabling home ownership.
“[The report] should give people the confidence that government policies to boost home ownership, whether it is through the First Home Super Saver scheme, through the home loan deposit scheme, are helping to increase home ownership,” he said.
Some property developers have backed the push to use super for first home purchases.
Sunland managing director Sahba Abedian said he was glad people were talking about such policies.
“I think if it is a first home buyer being allowed to enter the housing market that would be a good thing,” Mr Abedian said.
“People need access to equity without compromising the system. The implications are longer term so there needs to be safeguards.”