3.8.1.100 Ineligible Homeowners & RA

Summary

RA is generally not payable to an income support recipient who is a homeowner (section 11(4)) living in their own home. However, in some circumstances recipients who are treated as homeowners are able to receive RA.

This topic covers:

who is excluded from the general rule,
income support recipients in special residences,
members of a couple, and
ineligible homeowners and caravans.

Act reference: SSAct section 11(4) Homeowner

Who is excluded from the general rule?

These people are not classified as ineligible homeowners, and may be eligible for RA:

an income support recipient who has sold their former principal home within the last 12 months and is likely to use some or all of the proceeds of the sale (within 12 months of the sale) to acquire, build, repair or renovate another home that will become their new principal home,
an income support recipient who has sold their principal home (section 11A(1)) within the last 12 to 24 months and has made reasonable attempts, within a reasonable period after selling the home (section 1118(2B)), to acquire another residence, but has experienced delays beyond their control,
an income support recipient who is absent from their principal home and is providing a substantial level of care (1.1.C.15) for another person for at least 14 consecutive days, but for no longer than 2 years, and

Note: If the person is still absent from their own home after the 2 year period, the home ceases to be exempt under the asset testing rules, i.e. it is no longer their principal home,

an income support recipient who:
- is in a care situation (1.1.C.25) but not residing in a retirement village (1.1.R.270) or aged care residence, or
- pays for the use of a site or structure, including rights to moor a vessel, that is their principal home.
- Example: A caravan or boat.

Act reference: SSAct section 13(1)-'ineligible homeowner', section 11A(1) Principal home, section 1118(2B) For the purposes of subsection (1B)...

Policy reference: SS Guide 4.6.3.20 Determining Homeowners & Non-Homeowners, 4.6.3.80 Exempting the Principal Home - Sale Proceeds (from 01/07/2007)

Income support recipients in special residences

Special provisions exist for income support recipients who enter a retirement village, obtain granny flat rights or enter into a sale leaseback agreement.

Policy reference: SS Guide 3.8.1.102 Special RA Rules for People in Accommodation for Older People (Life Interest Rules)

Members of a couple (1.1.M.120)

If one member of a couple is an ineligible homeowner, both partners (1.1.P.70) will be ineligible homeowners and RA cannot be paid to either of them.

Exception: A member of a couple is not an ineligible homeowner if they have left the matrimonial home to receive or provide a substantial level of care for another person who needs, or is likely to need, that level of care for at least 14 consecutive days, but for no longer than 2 years. After 2 years if one partner is still living in the principal home, both partners are considered as homeowners and RA cannot be paid to either of them.

Act reference: SSAct section 13(9) A person is in a care situation if...

Policy reference: SS Guide 1.1.C.15 Care definitions, 3.8.1.90 Temporary Accommodation & RA, 4.6.3 Assessing the Principal Home, 4.6.4 Assessing Special Residences & Aged Accommodation, 5.1.8.30 Common Provisions Affecting Calculation of a Rate

Ineligible homeowners & caravans

Income support recipients who own their caravan and pay site fees for the land it stands on are not ineligible homeowners and may be eligible for RA.

Income support recipients who own their caravan and the land it stands on are ineligible homeowners and are not eligible for RA.

Income support recipients who rent or lease a caravan but own the land it stands on may be entitled to RA provided they are not classified as ineligible homeowners. Deciding whether or not a recipient in this situation is an ineligible homeowner will depend on the particular circumstances of each case, and any decision reached should consider all the relevant circumstances and information available.

Issues to consider are:

in order to receive RA, the RA applicant must not be an ineligible homeowner (section 1070C(b)).
Most homeowners are classified as 'ineligible homeowners' (with some exceptions as mentioned above) (section 13(1)-'ineligible homeowner').
To be a homeowner, the RA applicant must have a right or interest in their principal home which gives them reasonable security of tenure (section 11(4)).
When deciding whether or not a rented caravan gives reasonable security of tenure, it might be helpful to look at the details of the lease agreement.
- Example: Is the lease for a limited time only? Is there a guarantee of renewal in the lease?
Owning land provides a degree of security of tenure. However, land in this situation may not be considered part of the RA applicant's principal home.
- A principal home is defined as a dwelling-house and the land adjacent (section 11A(1)).
- If the caravan is not set up in a permanent way, the caravan may not be considered a dwelling-house, and therefore the land would be excluded from what is considered the principal home.
- This would mean the land is an asset for asset testing purposes, but the security of tenure provided by the land would not be part of an assessment for RA. This will depend on the particular circumstances of the case.

To decide that the income support recipient is a homeowner for RA purposes, the information available must indicate that:

the RA applicant has reasonable security of tenure in respect of the caravan, and
the set up of the caravan resembles a permanent, rather than temporary, structure.
- Example: Where a concrete slab has been laid as part of a caravan's annex.

Act reference: SSAct section 13(1)-'ineligible homeowner', section 11(4) Homeowner, section 11A(1) Principal home, section 1070C Common requirements (about aged care residence, home ownership and rent)

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Last reviewed: 2 August 2010

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