6.1.2.30 Reviews - Income from Real Estate

Summary

This topic explains reviews that result from a person starting to receive income from real estate, or receiving a different rate of such income. This topic covers:

  • income from rental of real estate, and
  • when to conduct a review.

Act reference: SSAct section 8(1)-'income'

Policy reference: SS Guide 4.3.8 Income from Property, 6.1.1.10 General Provisions for Income & Assets Reviews

Person who receives income from real estate

A person may receive income from the rental of real estate if they:

  • own property , or
  • have a life interest in property (1.1.I.185).

The following table shows the ownership of property under the 3 categories.

If a person… Then…
own the property as a joint owner, the whole property is mutually owned by each of the parties.
owns the property as a tenant in common, each partner individually owns a proportion, not necessarily half, of the property.
has been granted a life interest in a property,

they have the use and benefit of it for a lifetime and:

  • may live in it, OR
  • depending on the terms of the bequest, rent it and receive any income derived.

When to conduct a review

These guidelines apply to a person who receives income from real estate.

If… Then…
one joint owner dies,

the property automatically passes to the survivor/s without being included in the deceased's estate AND

the full value of the property is taken into account in assessing payment/s to the survivor/s.

one tenant in common dies,

their proportion goes into the estate and is disposed of according to the will or as provided by the law of the particular State regarding intestacy, AND

the survivor's pension is NOT reviewed UNLESS, they receive, or are able to receive, a distribution from the estate.

a person was granted the right to occupy a property, having only the right to live there, AND

the property is rented out or sold,

they will NOT NECESSARILY receive the income derived. A delegate needs to obtain full details of any document conferring a right to occupy a property and related arrangements, particularly for income from rent or sale of the property.

Last reviewed: 21 September 2015