4.6.8.80 Land Adjacent to the Principal Home Transitional Provisions

Summary

This topic explains how the land adjacent to the principal home transition provisions are applied and covers:

  • what are the backdating provisions,
  • periods where the transition provisions can apply,
  • transition provisions applying to new income support recipients,
  • existing support recipients decrease in entitlements,
  • what constitutes special circumstances,
  • factors to be considered when determining if special circumstances exist, and
  • when special circumstances transitional provisions should NEVER be applied.

What are the backdating provisions

The backdating provisions enable a person to be paid their entitlements in the transition period if they qualify under the extended land use test to have the area of land on the same title document as the principal home exempt from the assets test.

Periods where the transition provisions can apply

The land adjacent to the principal home transition provisions can be applied to all new claims lodged between:

  • 1 January 2007 and 31 March 2007 (inclusive), or
  • 1 April 2007 to 30 June 2007 in special circumstances.

New income support recipients who qualify on the date of claim lodgement

New income support recipients who qualify for the concessional assets test treatment under the extended land use test, and have a social security payment payable on the date of making the claim may have their claim backdated to the LATER of:

  • 1 January 2007, and
  • the day on which the social security payment first becomes payable.

Example: Joe makes a claim and provides the information required to make an assessment under the extended land use test on 31 March 2007. Joe is assessed and qualifies for payment. Joe will receive payment from 31 March 2007, but will also be backdated for his entitlements from 1 January 2007 to 30 March 2007. If Joe was only entitled to payment from 1 February 2007, then he will be backdated to the later of 1 January 2007 or when the payment first becomes payable. So, in Joe's case he will be backdated to when his payment becomes payable (from 1 February to 30 March 2007).

Act reference: Families, Community Services and Indigenous Affairs and Veterans' Affairs Legislation Amendment (2006 Budget Measures) Act 2006 Schedule 1 clause 20(2) Transitional arrangements-effective use test

New income support recipients who do not qualify on the date of claim, but would have sometime in the transition period

This applies to new income support recipients who at the date of making the claim (for the concessional assets test treatment under the extended land use test) do NOT qualify, and do NOT have a social security payment payable. However, if the new income support recipient would have qualified and becomes payable sometime between 1 January 2007 and the date of the claim, then they can be paid arrears.

Under the transitional arrangements the new income support recipient's entitlements between 1 January 2007 and the date of claim will be assessed and paid.

Example: George makes a claim and provides the information required to make an assessment under the extended land use test on 1 February 2007. George is assessed as NOT qualifying for payment on 1 February, however, is assessed as qualifying for a payment from 1 January to 30 January 2007. In his case George would be paid his entitlements for 1 January to 30 January 2007.

Act reference: Families, Community Services and Indigenous Affairs and Veterans' Affairs Legislation Amendment (2006 Budget Measures) Act 2006 Schedule 1 clause 20(3) Transitional arrangements-effective use test

Existing income support recipients - increase in entitlements

For existing income support recipients who receive an increased entitlement as a result of the 1 January 2007 exemption to the assets test, may have their increase in payment backdated to the LATER of:

  • 1 January 2007, and
  • the day on which the increase first becomes payable.

Example: Isabella provides the information required to make an assessment under the extended land use test on 1 March 2007. Isabella is assessed and qualifies for an increase in entitlements, and will receive the increase from 1 March 2007. Isabella will be backdated for her entitlements from 1 January 2007 to 28 February 2007. If Isabella was only entitled to an increase in payment from 1 February 2007, then she will be backdated her entitlement from when she becomes payable for the increase (from 1 February to 28 February 2007).

Existing income support recipients decrease in entitlements

For existing income support recipients who receive a decrease in entitlements as a result of this measure, the date of effect is to be the date of the decision. No overpayments will be raised unless the income support recipient has fraudulently misrepresented their circumstances.

Decrease as a result of a new valuation

A decrease in entitlement may occur as a result of a new valuation when:

  • the income support recipient fails the effective land use test and a new valuation is undertaken of the income support recipients property that increases the value of the land, or
  • the income support recipient gains an exemption for land on the same title as the principal home but the new valuation undertaken of the income support recipient's land on other titles increases the value of the land (on other titles).

The date of effect in this case applies from the first payday after the valuation is received.

Example: A pensioner makes a claim on 1 February 2007. On 1 April 2007 the pensioner is assessed and receives a decrease in entitlements due to the value of other land not on the same title as the principal home. The decrease in entitlements will occur on the first payday after the valuation is received.

Act reference: SSAct section 23(1)-'payday'

Policy reference: SS Guide 4.6.6.10 General Provisions for Valuation of Assets, 8.6.1 Date of Effect of Determinations - Summary of Legislation

Special circumstances

Special circumstances apply to people who will be new income support recipients from 1 January 2007, and those who will receive an increase in payment from 1 January 2007 as a result of a determination made under the extended land use test.

When to apply the special circumstances transitional provision

The land adjacent to principal home transition provisions apply to claims lodged between 1 April 2007 to 30 June 2007. If, after 1 January 2007, a social security payment becomes payable, or is payable at an increased rate as a result of the exemption, then a claim for payment lodged between 1 April 2007 to 30 June 2007 should be examined to determine if special circumstances exist.

What constitutes special circumstances

There is no definitive description of what constitutes special circumstances. However, there have been a number of AAT and Federal Court decisions that offer a guide in determining whether special circumstances exist.

Example 1: In SDSS v Hulls (1991) 13 AAR 414, the Federal Court held that it is not possible to set out a complete list of the relevant factors to be taken into account in determining whether special circumstances exist. Each case must be considered on its own merits.

Example 2: In Beadle and D-GSS (1984) 1 AAR 362 the AAT held that, in order for 'special circumstances' to exist, it must be possible to say that the circumstances in the case in question are 'markedly different from the usual run of cases'. The circumstances must have 'a particular quality of unusualness that permits them to be described as special'.

Factors to be considered when determining if special circumstances exist

The discretionary nature of the special circumstances provisions makes it impossible to give a precise list of factors that should be taken into account when considering whether the provisions should be applied. There is usually not one factor that makes a situation unusual, unforeseen or exceptional, but a combination of factors applying to each individual. The decision to apply the special circumstances provisions should be based on an individual's circumstances.

In general terms the decision maker should determine if there are any circumstances that exist for the person or their nominee that would warrant the application of the special circumstances provisions during the transitional periods.

The following table lists some factors that should be taken into consideration when determining if special circumstances exist.

Factors to consider What to look for
Health

Changes in health could have a major bearing on the individual's circumstances.

Examples:

  • Has the person been recently admitted to or been in hospital for an extended period?
  • Has the person's capacity to make rational decisions been impaired?
Changed circumstances Have the circumstances of the person altered significantly due to circumstances wholly or partly outside of the person's control?
Carers & nominees Changes in a carer's or a nominee's circumstances may impact on their capacity to act on behalf of the income support recipient. Has the carer or the nominee had any exceptional or unusual circumstances that may have a bearing on whether special circumstances should be applied?
Location Has the person's location contributed to any delays in lodging a claim?
Incorrect or insufficient advice

Generally, if a person has been incorrectly advised by a third party or their representative then they should seek a remedy through other channels, for example, the courts.

However, the person may not be, or ever likely to be, in a position to take this action.

Other details If there is some doubt as to whether special circumstances exist then the person should be given the benefit of the doubt.

When the special circumstances transitional provisions should NEVER be applied

The special circumstances transitional provisions should never be applied to assessments:

  • made outside the transitional periods, and
  • where the person does not qualify for payment, or an increase in payment as a result of the exemption to land adjacent to the principal home.

Act reference: Families, Community Services and Indigenous Affairs and Veterans' Affairs Legislation Amendment (2006 Budget Measures) Act 2006 Schedule 1 clause 20(4) The Secretary may determine in writing that a person is to be treated…, Schedule 1 clause 20(5) The Secretary may determine in writing that a person is to be treated…

Last reviewed: 15 August 2016