1.1.E.130 Entry contribution
This definition applies to all payments.
An entry contribution is the amount paid or agreed to be paid by a person for the right to live in a:
- retirement village (1.1.R.270), OR
- granny flat.
If a person lives in a home subject to a sale leaseback agreement (1.1.S.25), the entry contribution is the balance of the amount still to be paid by a buyer, at the date of a sale leaseback agreement.
A person who has not paid more than the EAA (1.1.E.240) is treated as a non-homeowner. The amount of their entry contribution IS an assessable asset and they qualify for RA for the service or maintenance fees charged by the organisation.
These rules were introduced in June 1989. At this time the EAA was $64,000. People who had already paid an entry contribution of less than $64,000 before this date were assessed as non-homeowners.
Exception: A person who gained entry to a retirement village before 3 November 1988 AND who was receiving RA prior to that date in respect service or maintenance fees payable in the village, continues to be eligible for RA regardless of the amount paid as an entry contribution.
Act reference: SSAct section 12(3) Premises constitute a retirement village …, section 12A(2) A person has a granny flat interest …, section 12B(2) An agreement is a sale leaseback agreement …, Schedule 1A clause 28 RA-retirement village residents (changes introduced on 13 June 1989)
Policy reference: SS Guide 1.1.E.240 Extra allowable amount