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Homeowner's Basic Assessment Rules

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Last updated: 8 November 2013

Definition of a homeowner

    

A person is a homeowner if they have a right or interest in the residence they are living in, which gives reasonable security of tenure. A person who is a member of a couple is considered to be a homeowner if they or their partner has a right or interest in one residence that is the principal home of one or both of them. Married couples living apart may be treated differently.  Different rules apply to people who have left their principal home in order to go into a care situation or become an aged care resident.    

More ?

Assessing the homeownership status of married couples and principal homes

9.2.2/Married couples living apart

9.2.2/Principal Home

In Care – Assessment Rules

Section 9.2.4

More ? (go back)

Security of tenure

Security of tenure exists where a person has a right or interest in a property, unless the delegate is satisfied that the right or interest does not give rise to security of tenure. Accordingly, the types of security in some leases are taken to provide security of tenure. For example, a guarantee to a mobile home owner that a current lease arrangement is to be extended, will satisfy the requirement of reasonable security of tenure.

Mortgage over home

If a pensioner has a right or interest in a property, but is paying off a mortgage, they are still classed as a homeowner.

Sale of the former principal home

    

A person is also considered to be a homeowner where the person:     

  • has sold their principal home
  • within the previous 12  months, or
  • within the previous 24  months if granted an extension due to delays beyond their control, and
  • intends to apply some or all of the sale proceeds in acquiring another residence that is to be the person's principal home.
Temporary absence from principal home

    

A person may continue to be regarded as a homeowner while temporarily absent from their principal home:     

  • if there is a clear intention to return to live in the home, within the first 12 months of absence, or
  • if absent due to the home being lost or damaged and they intend to repair/rebuild the former home or acquire a new home
  • for up to 12 months, or
  • for up to 24 months if granted an extension due to delays beyond their control.
Assessment of principal home

    

A homeowner's principal home is a disregarded asset under the assets test. This includes the:

Dual occupancy

If a person has established a dual occupancy dwelling, being two separate dwellings on the same land title that cannot be subdivided, then the second dwelling may also be disregarded under the assets test.  The delegate will need to be reasonably satisfied that the second dwelling forms part of the person's principal home.    

Homeowner's assets limit

The lower assets value limit applies to homeowners.    

Homeowners and rent assistance

    

Homeowners are not eligible to receive rent assistance, unless:    

Household contents

Household contents are not exempt. They are assessable for assets test purposes. The amount to be held is the market value, not the replacement value.     


A person is a homeowner if he or she has a right or interest, which gives reasonable security of tenure in the principal home. A person is also considered to be a homeowner if they have sold their home in the previous 12 months and intend to use part or all of the proceeds to purchase another home.

According to Section 5E(2) of the VEA a person is a member of a couple, if they are:

  • legally married to another person and is not living separately and apart from the other person on a permanent basis; or
  • living in a prescribed registered relationship with the other person (whether of the same sex or a different sex) and is not living separately and apart from that other person on a permanent basis; or
  • all of the following conditions are met:
  • living with another person, whether of the same sex or a different sex;
  • not legally married to that person;
  • in a de facto relationship with that person; and
  • not in a prohibited relationship

The term “partnered” is also commonly used.

A person's 'partner' is someone who is a member of a couple with that person.

The principal home has the meaning given by subsection 5LA(1) of the VEA and subsection 5LA(2) of the VEA. The principal home of a person is generally the place in which they reside. In certain circumstances, however, the principal home of a person can be the place in which they formerly resided. The following property is regarded as part of the principal home.

  • the residence itself (e.g. house, flat, caravan),
  • permanent fixtures (e.g. stoves, built-in heaters, dish-washers, light fittings and affixed carpets),
  • [glossary:curtilage:DEF/Curtilage] (i.e. two hectares or less of private land around the home where the private land use test has been satisfied, or all land held on the same title as the person's principal home where the extended land use test has been satisfied), or
  •       any garage, shed, tennis court or swimming pool used primarily for private purposes provided it is on the same title as the principal home.

 

 

One element of the means test for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their assets increase above a certain threshold known as the assets value limit (AVL).

Curtilage is the land adjacent to the exempt principal home.  A certain amount of curtilage is disregarded for the assets test.. The amount of curtilage that is exempt depends on whether the private land use test described in section 5LA(3) of the VEA, or the extended land use test described in section 5LA(4) of the VEA, is satisfied. Under the private land use test, up to two hectares on the same title as the principal home may be exempt. Under the extended land use test, all land on the same title as the principal home may be exempt.

 

 

Assets value limit is the maximum value of assets a person can have without affecting the person's pension rate. The assets value limit is worked out in accordance with SCH6-F3 of the VEA.

Rent Assistance is an allowance, which may be paid to a service pensioner or income support supplement (ISS) recipient to assist in meeting the cost of rental accommodation.

To receive rent assistance, a pensioner must be paying rent (other than Government rent) for accommodation in Australia, and the amount paid must exceed a certain threshold.