We investigated whether postural after-effects witnessed during transitions from a moving to stable support are accompanied by a delayed perception of platform stabilization in older adults, in two experiments. In Experiment 1, postural sway and muscle co-contraction were assessed in eleven healthy young, eleven healthy older and eleven fall-prone older adults during blind-folded stance on a fixed platform, followed by a sway-referenced platform then followed by a fixed platform again. The sway-referenced platform was more compliant for young adults to induce similar levels of postural sway in both age groups. Participants were asked to press a button whenever they perceived that the platform had stopped moving. Both older groups showed significantly larger and longer postural sway after-effects during platform stabilization compared to young adults, which were pronounced in fall-prone older adults. In both older groups elevated muscle co-contraction after-effect was also witnessed. Importantly, these after-effects were accompanied by an illusory perception of prolonged platform movement. Following this, Experiment 2 examined whether this illusory perception was a robust age-effect or an experimental confound due to greater surface compliance in young adults, which could create a larger perceptual discrepancy between moving and stable conditions. Despite exposure to the same surface compliance levels during sway-reference, the perceptual illusion was maintained in Experiment 2 in a new group of fourteen healthy older adults, compared to eleven young adults. In both studies, older adults took five times longer than young adults to perceive platform stabilization. This supports that sensory reweighting is inefficient in older adults.