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This topic discusses how to determine the rent amount that RA should be calculated upon. Generally, RA is payable only on the amount of rent paid by the RA recipient net of any subsidies or payments from tenants. However, there are a few exceptions. Details of the most common situations are:
A recipient who sub-lets a house that is managed by a co-operative or community housing group is paid RA based on the amount of rent paid by the recipient. This is usually a given percentage of their income.
Some recipients reside in disability accommodation provided by a government or community agency. The accommodation may be owned by the SHA but managed by the disability service agency. However, for administrative convenience, rent may be paid directly to the SHA. A recipient in disability program accommodation is paid RA only for the amount paid by the recipient for accommodation. RA is not payable for amounts paid for maintenance and service fees.
Note: Recipients who sub-let in community or co-operative housing and recipients who reside in disability program accommodation do not have formal tenancy agreements with the SHA and, as such, are not affected by the rules for sub-tenants of SHA housing and their housing is not considered 'Government rent'. RA may therefore be payable. This applies even if these groups (i.e. the community or co-operative housing group or the disability program accommodation group) receive funding or dwellings from the SHA.
Some state and territory governments offer rent relief schemes which impact on eligibility for RA. The government schemes offered and their treatment under RA provisions are as follows:
|
State Government |
Scheme Name |
Details of Scheme |
Eligibility for RA |
|
New South Wales |
Special Assistance Subsidy (SAS) |
Subsidy paid to disabled and HIV/AIDS positive people on the priority public housing waiting list. |
RA paid on gross rent payable. |
|
New South Wales |
Start Safely Rental Subsidy Scheme |
Subsidy paid to women with children escaping domestic violence who are homeless or at risk of homelessness. |
RA paid on amount of rent nominated on their lease. |
|
South Australia |
Student Rent Relief (closed to all applicants in February 2007) |
Subsidy paid to tertiary students who live more than 75km from home. |
RA paid on gross rent payable. |
|
South Australia |
Student Housing Program |
The household rent under this scheme is 75 percent of the 'market rent' paid by government housing tenants, regardless of the number or income of people sharing the property. |
Rent is paid to the Government therefore it is a government rent and no RA is payable. |
Defence Force members generally have 2 ways of paying rent, through DHA or a rent subsidy. If members reside in a DHA home, then RA is payable on the amount of rent the member pays to DHA - this will be a reduced rate.
Example: DHA lease a home for $300 per week, the member then pays DHA $140 per week to live in the home. RA is payable on $140 per week.
Some members rent their own home through the private rental market and then receive a subsidy from the Defence Force, RA is payable for these people on the net rent amount (rent minus subsidy).
Example: The member rents a home privately for $250 per week, Defence pay the member a subsidy of $110 per week, RA is payable on $140 per week ($250 minus $110).
Accommodation rented through DHA is not considered 'Government rent'.
Refugees on permanent and humanitarian visas (subclass 200) are eligible for RA subject to meeting other eligibility criteria.
Some humanitarian entrants may receive a short term accommodation subsidy through DIAC. In these cases, RA will only be payable in respect of the net amount of rent paid by the tenant (i.e. the dwelling rent less any DIAC rent subsidy) but will be payable on the total rent once the subsidy ceases.
Commonwealth Accommodation Scholarship, Commonwealth Education Cost Scholarship, relocation scholarship, and/or student start-up scholarship are not considered income for social security purposes. Merit equity-based scholarships (1.1.M.136) are treated as exempt income for social security purposes up to a threshold of $6,762 in 2010 (indexed annually). These scholarships are also not to be taken into account when calculating RA. RA should be paid on the amount of rent paid by the student, without discounting it for the scholarship amount.
Students who receive other scholarships generally have their scholarships assessed as income or 'valuable consideration' and therefore treated as income. Where scholarships are income tested, even if the scholarships may be specifically for the purposes of rent or accommodation costs, RA is paid on the gross rent payable by the student and not discounted for the scholarship amount.
Explanation: The income-tested scholarship (whether paid as a lump sum, fortnightly payments or as a reduction in rent) has already had an effect on the recipient's income support payment through the income test. To further income test the scholarship against the recipient's entitlement to RA would be unreasonable.
In most cases where a scholarship is not income tested, RA is payable on the amount of net rent paid by the student discounted by the scholarship amount above the threshold of $6,762 (2010, indexed annually).
Explanation: The non-income tested scholarship has not had an effect on the recipient's income support payment through the income test therefore it is reasonable to assess their RA based on the discounted amount of rent paid.
Example: Bill receives an equity-based scholarship of $100 per week in 2010. This scholarship is paid to Bill by the institution to reduce the accommodation fees Bill incurs. Bill's total rent for his accommodation before the subsidy is applied is $150 per week. Bill's scholarship is not considered as income for the purposes of social security law and is also not income tested, as the total scholarship amount is under the threshold of $6,762. Bill's assessed rent liability for the purposes of RA is $150 per week.
Policy reference: SS Guide 4.3.9.40 Income from Scholarships, 4.3.2.30 Income Exempt from Assessment - Legislated
Some income support recipients receive rent or board and lodging as payment for services rendered. Eligibility for RA depends on the particular arrangements applying.
Generally, RA is only payable on rent where the recipient would otherwise be paid an income for the services provided. A key factor is whether the value of the accommodation is included in the recipient's income test. If rent is deducted from the recipient's wage, the entire wage would be counted as income and RA may be paid on the accommodation cost.
Example: A student works part-time at the hall of residence where they also reside, they receive an award wage of which some is deducted for accommodation costs. This deduction is considered rent paid by the student and RA is calculated on this amount.
Note: In these circumstances, the board and lodging 2/3 rule may have to be applied to the deducted amount to determine the RA entitlement.
If rent is provided to an income support recipient in return for services alone, the value of this accommodation is not income tested (SSAct section 8(8)(za)) and the recipient is not eligible for RA.
Example: A YA recipient has an informal arrangement whereby they stay in a room rent free and in return they do some gardening and odd repair jobs for the homeowner as needed. This recipient is not eligible for RA.
Act reference: SSAct section 13(2) Amounts are rent...
Policy reference: SS Guide 3.8.1.70 Board & Lodging for RA, 4.3.2.30 Income Exempt from Assessment - Legislated
A person who runs a business from their home may claim, for taxation purposes, a proportion of the rent paid on their home as a business expense. In situations where a recipient claims part of their rent as a tax deduction, this amount does not attract RA. The portion of the rent attributed to private and domestic purposes only attracts RA.
Explanation: RA is targeted at assisting income support recipients meet the costs of housing in the private rental market. The costs of running a business are offset through the taxation system. Where a business is run from a person's principal home, the ATO has specific rules relating to the separation of business expenses from other 'household' expenses. Once a cost is accepted as a business expense, it ceases being an amount payable as a condition of occupancy of premises occupied by the person as the person's principal home.
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Last reviewed: 1 July 2010
