Changes to the way the age pension means test rules are applied to the family home may be needed as a way of encouraging more people to use the wealth tied up in their home to fund their retirement.The Actuaries Institute has published a new paper, Unlocking Housing Wealth, which canvasses policy changes that would remove the biases that constrain older Australians from accessing part or all of their housing wealth to improve their standard of living in retirement.Those policy options include excluding wealth released from a family from the age pension means test, limiting the age pension means test exemption that applies to family homes, providing stamp duty relief for retirees downsizing and developing more comprehensive consumer protection regulation to cover all equity release products.The Actuaries Institute estimates that A$926 billion of the total value of Australian residential property ($5.8 trillion) is in the hands of people over 60.Australian retirees are asset rich but cash poor. The OECD says Australians over 65 suffer from the second worst level of income poverty among OECD countries.The report said: "One thing that discourages retirees from dipping into the wealth tied up in their homes is the family home exemption from the age pension means test. "The current means test is poorly targeted as it does not differentiate between retirees with large disparities in home asset wealth."An option is to make the value of the family home above a specified amount subject to the age pension means test.Another issue is that, under current rules, capital amounts released from a protected asset (such as the family home) into a different asset class could affect the age pension entitlement.The Actuaries Institute said options included protection from the age pension means test for amounts released under home equity release schemes or downsizing. This would take the form of partial protection, up to a cap.The Institute said stamp duty relief should be available for retirees downsizing. "The cost of downsizing can be significant. Stamp duty is particularly problematic and there are other costs involved with sale and relocation," it said.It said the Government should review the regulation of equity release schemes, ensuring that security of tenure applies to all schemes and providers. While reverse mortgage contracts include borrower protection, such as security of tenure, there is no overarching consumer protection regulation for other types of arrangements.The regulation of such schemes should be at a Commonwealth level. State based property law complicates regulation in this area.The Government should look at ways to facilitate access to home equity release, including the establishment of a government scheme, such as an extension of the current Pension Loan Scheme.