3.8.1.60 Payments That May be Treated as Rent

Summary

This topic discusses some unusual forms of payments that may be treated as rent (1.1.R.160), and how they can affect RA entitlement. The following topics are covered:

  • child support maintenance payments,
  • money given to another person to assist with home purchase,
  • accommodation in residential care facilities,
  • residents of multi-purpose facilities,
  • accommodation in hospital, and
  • giving or receiving care in a private residence.

More common types of rent including board and lodging (1.1.B.70), Government rent and temporary accommodation are discussed in other Guide topics.

Policy reference: SS Guide 3.8.1.70 Board & Lodging for RA, 3.8.1.80 Government Rent & RA, 3.8.1.90 Temporary Accommodation & RA

Child support maintenance payments

Maintenance payments for child support purposes do not reduce the rent taken into account for RA, even if they are:

  • paid specifically to help with rental accommodation costs, or
  • made directly to the landlord or agent.

Explanation: This acknowledges that the maintenance recipient is not receiving free or cheaper accommodation. In other words, the 'cost' for the accommodation is not reduced by these arrangements. It would be inequitable to treat those who receive cash maintenance and use it to meet accommodation costs, differently from those for whom the maintenance is paid directly to the landlord on their behalf. Maintenance income also affects FTB similarly in both situations.

If an applicant or recipient receives accommodation instead of cash maintenance, the amount to be regarded as rent for the purposes of RA is the amount that would otherwise be payable for maintenance, regardless of market value.

Example: If living in the former matrimonial home which is owned by the former partner (although in many cases, the person would be an ineligible homeowner and, as such, precluded from RA).

In this case, an applicant or recipient can prove the rental cost in one of several ways:

  • legal documentation that supports their claim, or
  • a written statement from the owner to whom the rent is paid even if the rent is paid on the applicant's or recipient's behalf by someone else, or
  • a statutory declaration from the applicant or recipient.

When an income support recipient receives child support maintenance payments, RA is normally included in FTB Part A and no longer paid with the primary payment.

If a recipient does not take maintenance action they automatically receive the base rate of FTB Part A. In this case their RA is paid with the primary payment and not with FTB Part A.

Act reference: SSAct section 13(1)-'ineligible homeowner'

Money given to another person to assist with home purchase

RA may be granted to an applicant who has given a sum of money to another person with the intention of buying the home, if the applicant:

  • pays rent to live in the home, and
  • is not an ineligible homeowner (i.e. does not have security of tenure), and
  • is otherwise qualified for RA.

Policy reference: SS Guide 3.8.1.100 Ineligible Homeowners & RA

Accommodation in residential care facilities

An income support recipient living in a residential care facility (including nursing homes and hostels) may, in limited circumstances, be eligible for RA. Their eligibility depends on whether or not they are in a Commonwealth funded place, i.e. whether a residential care subsidy is payable under the Aged Care Act 1997 or the Aged Care (Transitional Provisions) Act 1997 to an approved provider for the provision of care to the income support recipient through the residential care service.

Examples:

Circumstance Eligible for RA?
A recipient lives in a Commonwealth funded residential care service and a residential care subsidy is payable to the approved provider for the recipient's care (i.e. the recipient is receiving care in a funded place). No.
A recipient lives in a Commonwealth funded residential care service and a residential care subsidy is not payable to the approved provider for the recipient's care (i.e. the recipient is receiving care in an unfunded place). Yes.

Exception: There is a 2-week period of grace during which an RA recipient can continue to receive RA following admission to a residential care service. RA is based on any continuing liability for rent at their former place of residence.

If an income support recipient is receiving care in a residential care service in an unfunded place and the recipient:

  • can identify the component paid for accommodation, this amount is treated as rent for RA purposes, or
  • cannot identify the component paid for accommodation, two-thirds of the total amount paid is treated as rent for RA purposes.

Act reference: SSAct section 13 Rent definitions

Aged Care Act 1997

Residents of multi purpose service facilities

Some income support recipients reside in multi purpose service (MPS) facilities, which are similar to residential care facilities. MPS facilities, however, unlike residential care facilities, do not receive funding from the Commonwealth for individual residents. Therefore recipients residing in MPS facilities may be eligible to receive RA on the amount of rent they pay to their MPS service provider.

Accommodation in hospital

An income support recipient in hospital, who is being charged nursing home type fees, may be eligible for RA.

Giving or receiving care in a private residence

An income support recipient who is personally providing, or receiving, a substantial level of care in another private residence, for a period of at least 14 days, is not to be treated as an ineligible homeowner and is subsequently not precluded from eligibility for RA, for a period of up to 2 years.

Act reference: SSAct section 13(2)-'rent', section 13(9)-'in a care situation'

Policy reference: SS Guide 3.8.1.70 Board & Lodging for RA, 3.8.1.90 Temporary Accommodation & RA, 4.6.3.70 Exempting the Principal Home - Care Situations

Last reviewed: 20 September 2018