220.127.116.11 Sharers provisions for RA
Single RA recipients who share their accommodation with others are only entitled to a maximum rate of RA two-thirds of that for singles living alone.
Explanation: This is in recognition of the economies of scale available to sharers.
If a recipient's calculated rate of RA is below the sharer's maximum rate, the lower rate applies - i.e. the recipient is unaffected by the sharers provisions.
This topic covers:
- sharers classification
- exempt income support recipients
- exempt accommodation
- single parent sharing with child, and
- boarders and lodgers.
In order to be classified as a sharer (1.1.S.150), an income support recipient must be:
- without dependent children
- not in an exempt category of person or accommodation, AND
- have a LEGAL RIGHT to share a MAJOR AREA of their accommodation with others.
A MAJOR AREA of accommodation is a bathroom, kitchen or bedroom. If an income support recipient shares 1 of these major areas with others, they may be classified as a sharer.
Example: An income support recipient has their own bedroom but they share a bathroom and/or a kitchen with the 3 other people living in the house. This recipient may be a sharer, if they have a legal right to share the bathroom and/or kitchen.
A person who has the exclusive right to use a bathroom, a kitchen and a bedroom is NOT to be treated as a sharer solely because they share another area with other people.
Example: An income support recipient has a self-contained room, which includes their bedroom, a kitchenette and an attached bathroom which they exclusively use. However, they share a lounge room with 2 others. This person should not be classified as a sharer.
A LEGAL RIGHT to share a major area of accommodation can be demonstrated in ONE OF 2 WAYS:
- the recipient's name is included in a formal lease or tenancy agreement, OR
- the recipient has an oral agreement to share AND there is evidence of this in the form of a rent certificate or rent declaration proving that the recipient pays regular amounts of money on a regular basis.
If there is no evidence that the recipient in question has a LEGAL, ENFORCEABLE right over the accommodation, then they are NOT a sharer. They are considered a GUEST, possibly with personal privilege of access.
Example 1: An income support recipient decides to move in with their friend, who is already paying fortnightly rent for an apartment. The income support recipient is not on the lease, but rather has an oral agreement with their friend to pay them half the rent each fortnight. When applying for RA, the income support recipient explains the oral agreement and provides a rent certificate signed by their friend, confirming this arrangement. This demonstrates a LEGAL RIGHT over the accommodation, and means that the recipient in question should be classified as a sharer.
Example 2: An RA recipient has a friend stay with them several nights a week, as it is convenient for that friend's transport. Although the arrangement is fairly regular, and the RA recipient receives some money from their friend when they can afford it, they have not made an oral agreement that this will be an ongoing arrangement. The friend in this situation does NOT have a legal right to stay in the RA recipient's accommodation, thus the RA recipient would not be classified as a sharer.
When making a decision on this issue, all available information should be considered.
Example: Bank statements may be used as proof of regular amounts of money paid, accompanying a rent declaration.
When making a decision on this issue, it must be considered that rent is defined as amounts payable by a person as a condition of occupancy of their principle home. This means that flexible arrangements, such as one tenant paying the rent and one tenant paying the bills, MAY be capable of demonstrating that both parties have a legal right over the accommodation. ONLY IF the oral arrangement is EVIDENCED with a lease, tenancy agreement, rent certificate or rent declaration.
Note 1: In this situation net rent rules still apply, and may affect the amounts on which RA is payable.
Note 2: For amounts to be considered rent, they must be payable on a regular basis. Generally this will be at least every 3 months. However, where the decision maker is satisfied that amounts payable at regular intervals greater than 3 months should be treated as rent, they may be.
Example: 2 income support recipients share an apartment which has a rent of $200 a fortnight. They have an oral agreement whereby one pays the rent, and one pays all the bills, which generally works out at $200 each fortnight. The names of both recipients are on the formal lease. By paying regular amounts of money and providing this lease, both recipients have a legal right to occupy the apartment. They would both be classified as sharers. HOWEVER, net rent rules apply, so that both recipients CANNOT apply for RA payable on $200 a fortnight. RA should be paid on amounts totalling $200 (the total rent payable).
Act reference: SSAct section 5A(1) For the purposes of this Act …, section 5A(3) A person who has the exclusive right to use …, section 5A(6) In this section…, section 13(2) Amounts are rent …
Policy reference: SS Guide 18.104.22.168 Net rent rules
Exempt income support recipients
The following groups of income support recipients are NOT affected by the sharers provisions:
- boarders and lodgers (1.1.B.70)
- DSP recipients
- CP recipients
- recipients in nursing homes (1.1.N.140)
- single parents sharing accommodation ONLY with their recipient children
- singles living in a caravan, boat or a mobile home on their own, even if they are sharing a major area of accommodation in a caravan park or marina, and
- people who live in exempt accommodation (1.1.E.168).
Act reference: SSAct section 5A(6)-'recipient child'
For the purposes of RA, exempt accommodation is accommodation that is considered to be a:
- boarding house
- guest house
- private hotel
- rooming house
- lodging house, or
- similar premises.
Examples of assessing a recipient against the sharers provisions appear under the next 2 headings in this topic and in 22.214.171.124.
Act reference: SSAct section 5A Single person sharing accommodation
Policy reference: SS Guide 1.1.E.168 Exempt accommodation (RA)
Single parent sharing with child
Single parents who share their accommodation ONLY with their recipient child (1.1.R.84) are exempt from sharers provisions.
If a single parent and their RECIPIENT child share their accommodation with a third party, then the exemption does NOT apply to anyone in the household, and the sharer provisions DO apply.
Example: Jenny rents her house for herself and her recipient child Louise. Because they have Adam as a sub-tenant, the sharer provisions apply to all of them.
If a single parent shares accommodation with 1 or more DEPENDENT children (1.1.D.70) and a third party, the exemption only applies to the parent with their dependent children. That is, the third party is assessed as a sharer.
If a single parent shares accommodation with 1 or more INDEPENDENT children who receive a wage or salary, then all occupants are classed as sharers.
Act reference: SSAct section 5A Single person sharing accommodation
Policy reference: SS Guide 126.96.36.199 Special RA rules for couples & families with children
Boarders & lodgers
A single boarder and lodger is classed as a private lodger, and may be assessed as a sharer IF they:
- can separately identify the costs of accommodation from the costs of meals, AND
- are sharing a major area of accommodation with others.
Example 1: A single income support recipient living in a hostel where regular meals are provided as part of the accommodation arrangements. This recipient would be treated as a boarder and lodger, NOT as a sharer.
Example 2: A single income support recipient living in a boarding or lodging house, sharing a major area of accommodation with others as a lodger, and not receiving regular meals as part of the accommodation arrangements. This recipient WOULD be treated as a sharer because they share a major area of accommodation with others, BUT would be exempted from the sharers rate of RA if they live in exempt accommodation.
Quick reference & examples
A number of examples that serve as a quick reference to assessing a recipient against the sharers provisions, can be found in 188.8.131.52.