18.104.22.168 Board & lodging for RA
This topic discusses the following issues and how they can affect RA assessment:
- payments for board and lodging (1.1.B.70)
- the two-thirds rule, and
- free board and lodging.
Act reference: SSAct section 13(6) Board and lodging
Payments for board & lodging
Board is defined in SSAct subsection 13(1) as the provision of meals on a regular basis in connection with the provision of lodging. However, only the amount paid for lodging is counted as rent for RA purposes.
Note: For the purposes of RA, a payment for lodging is the same as a private rent payment, regardless of whether the lodging is provided in private or government housing accommodation. Government sub-tenant rules apply (22.214.171.124).
Example: An income support recipient paying an amount for board and lodging to a government housing tenant may be eligible to receive RA on the amount identified as the lodging component.
Note: Consideration should also be given to the net rent rules (126.96.36.199).
A recipient who pays amounts for board and lodging should be asked if an identifiable amount is paid for lodging. The recipient's estimate or statement of the amount paid for lodging should generally be accepted.
If the recipient is unable to identify the amount paid for lodging, a two-thirds rule applies. This is explained in more detail below.
If the recipient is being paid YA while living in a boarding school, the fees are regarded as being paid by the student even if they are paid by a parent on behalf of the student. Money paid by a parent to cover a YA recipient's rent at a tertiary student residence is also regarded as being paid by the student.
Example: University students may be eligible to receive RA on the amount paid for their boarding house/hostel type accommodation, even if the amount is paid by a parent or guardian of the student.
Act reference: SSAct section 13(1) Rent definitions, section 13(2A) If: YA is payable …
The two-thirds rule means that if an income support recipient pays for board and lodging and the amount paid or payable for lodging cannot be separately identified, two-thirds of the total amount is considered to be for rent.
Example: If an income support recipient pays $60.00 a week for board and lodging and cannot identify the amount paid just for lodging, then $40.00 per week is considered as rent for RA purposes.
Act reference: SSAct section 13(6) Board and lodging, section 13(7) Nursing homes
Free board & lodging
Where an income support recipient provides services in exchange for board and lodging, the value of the accommodation is not considered as rent for RA purposes, and neither should it be assessed as income for the purposes of the social security law.
Where an amount of money is deducted from a recipient's salary or wage to pay for board and lodging, the component of the amount deducted to pay for accommodation would be considered rent for RA purposes. In this case, the full amount deducted to pay for board and lodging should be assessed as income for the purposes of the social security law.
Example: An income support recipient works part-time as a waiter and resides with their employer, receiving board and lodging. Part of the recipient's wage is deducted each week for accommodation and meal costs. The proportion of the deduction paid for accommodation is considered rent paid by the recipient and RA is calculated on that proportion.
Example: An income support recipient has an informal arrangement whereby they receive free board and lodging in exchange for doing odd jobs around the house and occasional repairs. This income support recipient is NOT eligible for RA.
If an income support recipient is given the right of occupancy of a property (not being a life interest or an equity in the property) in return for the payment of rates or similar, the recipient MAY be regarded as paying rent IF:
- it can be established that they are required to pay regular amounts, AND
- in the delegate's opinion, they should be regarded as paying rent.
Special rules apply when someone is receiving SpB as well as free board and lodging.