The Guides to Social Policy Law is a collection of publications designed to assist decision makers administering social policy law. The information contained in this publication is intended only as a guide to relevant legislation/policy. The information is accurate as at the date listed at the bottom of the page, but may be subject to change. To discuss individual circumstances please contact Services Australia. Assessing Retirement Villages


A person's principal home can be in a retirement village (1.1.R.270). A retirement village is a special residence (1.1.S.255). The 'special residence rules' are used to determine the homeowner status of a person living in a retirement village. Whether or not a person living in a retirement village is considered a homeowner or non-homeowner is determined by the EC (1.1.E.130) amount. The exception is an illness-separated couple.

This topic discusses:

  • the exemption status of a person's former principal home,
  • how to determine a person's EC to a retirement village, and
  • the home ownership status for a person in a retirement village.

Act reference: SSAct section 11A(1) Principal home, section 4(7) Illness separated couple

Exemption status of former principal home

IF a person is living in a retirement village, their former principal home is assessable under the assets test.

Determining a person's EC

The total amount that a person is required to pay in order to secure accommodation in a retirement village is their EC amount. This amount is that which the person pays to the retirement village, unless the person can provide evidence that proves an amount paid does not relate to the purchase of the right to accommodation. For illness-separated couples the EC is based on the 'single' rate of the retirement village EC. Regardless of the terms used to describe the EC in the entry agreement, or the method of payment, it IS an EC if it is an amount that MUST be paid as a condition of entry to the retirement village.

Explanation: The EC may be described as a payment, donation or loan that is used to secure accommodation in the village.

The EC amount does NOT include ongoing costs. If the person is eligible to receive RA, then these fees and charges are assessed as rent.

Example: General service or maintenance fees, which are payable on a regular basis.

A person may pay for their right to live in a retirement village under more than one contract. The total amount paid under the contracts is the person's EC amount. The signing of more than one contract does not alter the EC assessment.

Example: A person obtains the right to reside in a retirement village under 2 contracts for the purchase of a unit and a garage. The total amount paid under both contracts would be used to calculate the EC.

A person may be able to produce evidence that an amount paid is unrelated to the right to accommodation. In this case, the amount is excluded from the EC amount, and assessed as an asset.

Example: A person pays amounts under 2 contracts for the purchase of a unit and a garage. The person is able to show that there is no 'one for one' allocation of garages to every unit in the retirement village, the garage is not attached to the unit and the right to accommodation was not conditional on the garage purchase. In this case, the amount paid for the garage is excluded from the EC amount, and assessed as an asset.

If a person moves from a self-contained unit or serviced unit in a retirement village AND leaves their refund in lodgement with the retirement village, deeming provisions MAY apply.

Explanation: A person may move to the high level aged care section of their retirement village. A retirement village cannot charge an EC in respect of Australian Government funded aged care so they must refund any charge paid. However, the person may choose to leave their refund with the retirement village.

Act reference: SSAct section 12(5) A person is a retirement village resident…, section 13(1) Rent definitions, section 13(2) Amounts are rent in relation to the person if…

Policy reference: SS Guide 3.8.1 RA - Qualification & Payability, 4.4 Deeming Provisions

Home ownership of a person in a retirement village

The following table shows the assessability of the EC and home ownership status for people living in retirement villages.

If the EC is… Then the person is… And RA…
LESS than or EQUAL to the EAA (1.1.E.240) amount, NOT an ineligible homeowner (1.1.I.140), MAY be payable.
MORE than the EAA amount, an ineligible homeowner, is NOT payable.

Policy reference: SS Guide General provisions for special residences

Moving to residential aged care (1.1.A.110)

A person is in residential care if they have been assessed by an ACAT as having significant care needs and requiring residential care and they are being provided with that residential care through an aged care service (1.1.R.220) conducted by an approved provider.

Where a retirement village resident enters a unit or aged care section of their village, for which recurrent Australian Government funding is being provided, and they are an aged care resident, then the person is 'in residential care' and is assessed under the care situation provisions.

Act reference: SSAct section 11A(9) A residence of a person is to be taken to continue to be the person's principle home during…, section 23(4CA) For the purposes of this Act, a person is in residential care…

Policy reference: SS Guide 1.1.C.25 Care situations

Last reviewed: