C02/1999 Amending Departmental Instruction re: Departmental Instruction C32/97

DATE OF ISSUE:  21 JANUARY 1999

Amending Departmental Instruction re:  Departmental Instruction C32/97

“1996/97 BUDGET INITIATIVE: DVA TO PAY DSS AGE PENSION TO DISABILITY PENSIONERS”

Purpose of instruction

The purpose of this instruction is to advise staff of an amendment to Departmental Instruction C32/97, “1996/97 Budget Initiative: DVA To Pay DSS Age Pension to Disability Pensioners”.

Reason for amendment

DI C32/97, published 18 June 1997 advises that there are differences between Department of Family and Community Services (DFACS) and DVA policy relating to the assets test assessment of curtilage.  The information was incorrect.  That is, there is no difference in legislation or policy regarding curtilage.

Amendment

The VEA column of Income and Assets Differences summary table at page 40 of the instruction requires amendment. Under both the VEA and the SSA 2 hectares of curtilage is exempt as long as the land in question adjoins the principal home and is used for private or domestic purposes.

Correct Policy

The legislation contained in both the SSA and the VEA is the same and the policy on curtilage is as follows: Where the principal place of residence includes more than one adjoining title and where the adjacent block includes structures that are primarily used for private or domestic purposes, that block of land will be regarded as adjacent, so long as the total area of the blocks does not exceed two hectares. All references stating otherwise should be removed from State Office documentation. Attached below is an excerpt from the GOSP outlining the correct treatment of curtilage.

Authorised by

R J HAY BRANCH HEAD INCOME SUPPORT

Attachment

CURTILAGE

The value of a person's home and the land surrounding it is normally exempt.  However, any person who resides on a block larger than 2 hectares must have the value of the excess land taken into consideration.

The principal home includes the land adjacent to the house that is used primarily for private purposes.  In the case of a flat or home unit, a garage or storeroom used primarily for private purposes is considered to be part of the principal home.

Where the private land on which the residence is situated includes a structure such as a tennis court, swimming pool, shed or garage, and includes an area of land which is not used primarily for private purposes, that structure or area of land cannot be regarded as part of the home, and is therefore not exempt.  Subsection 5L(6) VEA refers.

An area of land or a structure will be regarded as not used primarily for private purposes if it is not available for private use for at least half of the year.  A valuation should be sought for any such structure or area of land.  In the case of a farm or an area of land which is used for commercial purposes (eg. market gardening) the Australian Valuation Office (AVO) may be required to determine what area of land is being used primarily for private or domestic purposes and will advise the value of the non-exempt portion.  This is only relevant when the assets value is within $10,000 of the prescribed asset limit or where the value appears understated.  In this situation, all relevant information should be obtained from the pensioner to enable the AVO to make an accurate valuation.

Refer to Charge Or Encumbrance On Both Assessable And Exempt Asset for information regarding apportionment of a charge (eg. mortgage) on both an assessable and an exempt asset.

Where the area of private land adjacent to the dwelling-house exceeds 2 hectares (4.5421 acres), the excess cannot be regarded as part of the principal home of the person.  The area of 2 hectares includes the area on which the dwelling house is built.  Paragraph 5L(5)(a) VEA refers.

Land in excess of 2 hectares is assessable, regardless of whether:

• local zoning laws preclude building blocks of 2 hectares or less; or

• .the excess area is used primarily for private or domestic purposes in association with the dwelling-house.