KICKING people off the age pension by including the family home in the asset test has been raised in Budget negotiations with Treasurer Joe Hockey.

Liberal Democrat senator David Leyonhjelm yesterday told Mr Hockey retirees should be using use reverse mortgages to unlock equity for their retirement, not rely on taxpayers.

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He said people feared they would be forced to move, but a well-regulated reverse mortgage industry could give those who no longer qualified for the pension access to cash “with no risk of them being chucked out”, he told Mr Hockey.

A couple who own their home can have $279,000 in assets and a single pensioner can have $196,750 and receive the full pension, no matter how valuable their home is.

A couple can have up to $1,110,500 in assets, and a single person up to $748,250, and still be paid a part-pension.

“If you’ve got a million-dollar house, you should be releasing the equity in that house before you call on your fellow Australians to pay for your pension,” Senator Leyonhjelm said.

“And the problem, of course, is those pensions are being paid for by people who don’t own a house.”

Mr Hockey has been trying to garner crossbench support for his Budget before Parliament resumes this month.

“I will meet with anyone who is sensible and the independent senators so far are proving to be sensible,” he said.