4.6.8.30 Grandfathering Provisions for More than One Title

Summary

This topic discusses the grandfathering provisions that exist for income support recipients (who have land adjacent to the principal home of up to 2 hectares) and who would otherwise be disadvantaged by the introduction of the one title rule from 1 January 2007.

Background information

From 1 January 2007 the legislative definition of a principal home was amended to clarify the exemption of land adjacent to the home as being the land held under the same title document as the land on which the dwelling-house is located.

This amendment would have resulted in some income support recipients receiving a reduced rate of payment, or having their payment cancelled, from 1 January 2007.

Act reference: SSAct section 11A(1) Principal home

What are grandfathering provisions

Grandfathering provisions enable a person to continue to have their circumstances assessed under the 'old rules', so they are not disadvantaged by the introduction of the 'new rules'.

Generally, if a person's payment was to be reduced or cancelled due to the introduction of a new rule (legislative or policy) then a grandfathering provision enables that person to be assessed as they were still under the old rules.

Income support recipients to whom the grandfathering provisions apply, may come to light on an ongoing basis.

Application of grandfathering provisions

The grandfathering provisions apply to income support recipients who were receiving payment as at 31 December 2006, and:

  • whose payment would be reduced or cancelled from 1 January 2007 as a result of the application of the amended definition of land adjacent to the principal home, OR
  • whose payment was reduced prior to 1 January 2007 because land adjacent to their dwelling-house was not on the same title.

Explanation: The grandfathering provision applies to income support recipients, current at 31 December 2006, who would be disadvantaged by the new one title rule because they currently have an exemption over 2 titles.

Example: Prior to 1 January 2007, a disability support pensioner was assessed as having the area of land adjacent to his or her principal home on 2 hectares exempt even though the 2 hectares is split across 2 titles. This is because the SSAT ruled in 2006 that the income support recipient should be eligible for the 2 hectare concession even though the area of land is over 2 titles.

The land on the other title was not being put to any commercial use. The income support recipient can have the 2 hectares exempt under the grandfathering provision if their payment was to be reduced or cancelled as a result of the one title rule being enforced.

Under the grandfathering provisions, from 1 January 2007, the income support recipient will continue to have the 2 hectares on more than one title exempt from the assets test, providing:

  • the land on the other title is not used primarily for commercial purposes,
  • the income support recipient remains living in their home, and
  • the income support recipient continues to receive an income support payment.

The grandfathering provisions also apply to income support recipients, current at 31 December 2006, who would have gained an advantage in the past if it were not for the one title rule being enforced. That is, the income support recipient could have had land of up to 2 hectares on 2 titles exempt, but because the one title rule was enforced they only have an exemption for one title.

Example: An age pensioner had one-hectare of land on one title and one-hectare of land on another title. Prior to 1 January 2007, the pensioner was assessed as having the area of land adjacent to his or her principal home on one-hectare exempt. The adjacent one-hectare block was assessed under the assets test. The pensioner finds out about the new grandfathering provisions and applies to have the 2 hectares exempt. The pensioner can have the 2 hectares exempt under the grandfathering provision if they would have received an increase in payment if the one title rule were not enforced.

Under the grandfathering provisions, from 1 January 2007, the income support recipient can have the 2 hectares on more than one title exempt from the assets test, providing:

  • the land on the other title is not used primarily for commercial purposes,
  • the income support recipient remains living in their home, and
  • the income support recipient continues to receive an income support payment.

Where income support recipients could have gained an advantage in the past if it were not for the one title rule being enforced, the normal date of effect provisions relating to a favourable decision will apply. That is, the date of effect of the favourable determination is the day they sought the review.

The grandfathering provisions apply only to income support recipients whose dwelling-house and adjacent land is 2 hectares and under, but the area of land is on more than one title.

The grandfathering provisions do not apply to a person who satisfies the extended land use test.

Act reference: SSAct section 11A(6) Extended land use test

Cessation of income support payment

If the person ceases to receive an income support payment then grandfathering provisions are lost and cannot be reapplied some time in the future.

Example: A person is benefiting from the grandfathering provisions but their income support payment, for whatever reason, is cancelled. If at a later date they apply for payment again, the person, if they qualify under the private land use test, will only have the area of land adjacent to the principal home on the same title document exempt from the assets test.

Last reviewed: 6 February 2017