4.6.4.10 General provisions for special residences
Summary
A person can be a homeowner even when they are living in a special residence.
This topic discusses:
- the definition of a special residence
- the exemption status of a special resident's former principal home
- the home ownership status for a person in a special residence
- the home ownership status for couples living apart
- the EC amount (1.1.E.130) for a person in shared equity housing, and
- deeming a special resident's EC amount.
Act reference: SSAct section 11(4) Homeowner, section 12C(2) A residence is a special residence if the residence is …, section 11A(1) Principal home
Definition of special residences
Special residences are:
- retirement villages
- granny flats, and
- sale leaseback homes.
Act reference: SSAct section 12(3) Premises constitute a retirement village for the purposes of this Act if … , section 12A(2) A person has a granny flat interest in the person's principal home if …, section 12B(1)-'sale leaseback home'
Exemption status of former principal home
IF a person is living in a special residence, their former principal home is assessable under the assets test.
Home ownership status
Home ownership status for income support recipients and eligibility for RA in a special residence is determined by comparing the EC amount to the EAA (1.1.E.240).
Special provisions apply to illness separated couples. The EC may also be an assessable asset (1.1.A.290).
Explanation: Special residents exchange an EC for accommodation rights, usually for life. In most cases the special resident does NOT have legal title in their accommodation.
The following table shows the assessability of the EC and home ownership status for:
- single income support recipients living in a special residence, and
- couples where one member of the couple IS living in a special residence BUT their partner (1.1.P.85) is NOT.
| If the EC is … | then the special resident is … | and RA … |
|---|---|---|
| LESS than or EQUAL to the EAA amount | NOT an ineligible homeowner (1.1.I.140) | MAY be payable. |
| MORE than the EAA amount | an ineligible homeowner | is NOT payable. |
Until October 1997, low level care facilities, then known as hostels (1.1.H.90) could have come within the definition of a special resident.
Act reference: SSAct section 12B(2) An agreement is a sale leaseback agreement …, section 1147 Entry contribution, section 12C(3) A person is a special resident if …, section 1148 Extra allowable amount, section 4(7) Illness separated couple
Policy reference: SS Guide 4.6.4.20 Hostels or low care facilities assessed before 01/10//1997, 4.6.4.30 Assessing Retirement Villages, 4.6.4.40 Assessing Sale Leaseback Residences, 4.6.4.50 Granny flats - features, rights & interests
Home ownership status of illness separated couples
Home ownership status is assessed separately for couples who are both living in a special residence. The following table shows home ownership status for couples living separately in a special residence.
| If the person's EC is … | and their partner's EC is … | then … | and RA … |
|---|---|---|---|
| LESS than or EQUAL to the EAA | LESS than or EQUAL to the EAA | BOTH are NOT ineligible homeowners | MAY be payable. |
| MORE than the EAA |
|
|
|
| MORE than the EAA | LESS than or EQUAL to the EAA |
|
|
| MORE than the EAA | BOTH are ineligible homeowners | is NOT payable. |
A special assets test limit is applied to illness separated couples who have a different home ownership status.
Act reference: SSAct section 1152 Members of illness separated couples …
Policy reference: SS Guide 5.1.8.30 Common provisions affecting calculation of a rate
EC amount for a person in shared equity housing
IF a person lives in shared equity housing (1.1.S.137) the amount paid for shares is regarded as being the person's EC amount.
Deeming a person's EC amount
Deeming provisions DO NOT apply to the resident's EC.