Pensioners are being given further concessions to encourage them to downsize and free up housing stock for younger families looking to buy.
The new federal laws reduce the impact selling a house has on the payments pensioners and other welfare recipients receive.
The current 12-month asset exemption test for the amount of money from the house sale that will go towards the new home will be doubled to two years from January 1.
The changes will give people more time to buy, renovate or build their new homes without worrying their welfare payments will be impacted.
More than 8000 people on income support took advantage of the 12-month exemption last year.
Social Services Minister Amanda Rishworth said it was an important piece of legislation to help pensioners downsize.
"This will provide real support to older Australians facing cost of living pressures," she said.
