Income from Boarders or Lodgers

Last amended: 5 September 2012

Income treatment of board and lodging situations

The following table shows the percentage of income from different kinds of boarding and lodging situations that is treated as assessable income for DVA purposes. These situations assume that the boarder/lodger is not a family member.

Mortgage on the home

If there is a mortgage on the home, the mortgage interest payments are an allowable deduction from the assessable income being received from the boarder or lodger.

Home is rented not owned

If the pensioner rents their principal residence, the rent they pay is an allowable deduction from the assessable income being received from the boarder or lodger.

Disputes over assessable income

The percentages DVA uses to determine assessable income for the different kinds of boarding and lodging situations are designed to provide an estimation of the costs and expenses likely to be encountered by a pensioner involved in this type of venture. A lower amount of income may be assessed if the pensioner claims that more than the percentage allowed is expended in costs associated with the income derived from the boarder or lodger. Any claim of this nature must be fully investigated before a determination is made. The pensioner must provide full details of costs over and above their normal allowable household expenses, directly or indirectly associated with the boarder or lodger.

Board and lodging received from a family member

If a boarder or lodger is the father, mother, son, daughter, brother or sister of the person, the income that is received from the rooms rented is not treated as income for DVA purposes.    

More than five rooms let

If more than five rooms are let, the:

• operation is defined as a commercial venture, and
• net profit from the operation is treated as income for DVA purposes.    
  More →

  Chapter 10.3 Business Structures and Trusts

  More → (go back)

Rooms vacant for periods of time

When the income from rooms constantly varies due to rooms being vacant for periods of time, the net profit on the latest taxation return and assessment notice may be accepted as the pensioner's income for DVA purposes.

Letting of dual occupancy dwellings

Where a near relative pays rent for a second dwelling in a dual occupancy dwelling arrangement, the rent is regarded as being similar in nature to board and lodging received by a family member. The income received from this arrangement is therefore not treated as income for DVA purposes.