C56/1998 Budget 1997/98 initiative to exempt certain accommodation from shared renter rules under the Social Security Act, 1991

Purpose

The purpose of this instruction is to explain the changes to shared rent rules under the Social Security Act 1991 (SSA) effective from 1 January 1999.  The changes exempt certain types of accommodation from the shared rent rules.  The exemption applies to customers renting in a range of commercial board and lodging type accommodation.

Background

Under the SSA, rent assistance is restricted to a maximum of two thirds of the maximum single rate of rent assistance for:

• Single people who do not have dependent children; and

• Share accommodation.

Renter sharers are people residing in a group house or share a house or flat (eg with friends or family).

Boarders and lodgers are already exempted from the sharer rules as they do not enjoy many of the benefits of sharing.  It has now become clear that many people lodging in commercial board and lodging and some hostel residents should also be exempted.

Exemption Extended

People living in certain types of commercial accommodation do not enjoy many of the benefits, or the economies of scale, usually associated with shared or group housing, such as shared electricity, gas and food costs.

From 1 January 1999, the single non-sharers maximum rate of rent assistance will be payable to single age pensioners who share accommodation in:

• Hostels;

• Boarding houses;

• Private hotels; and

• Similar accommodation.

The current maximum rate of rent assistance that will apply is $75.20 per fortnight however the rate continues to be subject to the amount of rent in excess of the rent threshold paid.

This exemption recognises that board and lodging type accommodation more closely resembles a separate dwelling unit, rather than a shared living arrangement.

Effective date

The commencement date is 1 January 1999.  Please note that the implementation date was brought forward from the 1 July 1999 announced in the Budget.

Legislation

The legislative amendments to the SSA are contained in 1998 Budget Measures Legislation Amendments (Social Security and Veterans' Entitlements) Act 1998.

Target Population

At 26 March 1998, DVA had 3 age pensioners assessed under shared renter rules.

A check of these cases will be made and if any appear to be residing in commercial accommodation that attracts the shared renter exemption the relevant State Office contact will be notified separately.

Procedures

Due to the exceptionally low number of age pensioners affected, PIPS/PC was not amended to provide automatic processing of the shared renter rules.

The 2/3 rd rule was applied via manual rates (MOA 99)

If a case is identified that should be exempted from the sharer rules simply follow existing procedures for rent assistance applicable to renters who are not affected by the sharer rules.

The Attachment provides Centrelink information relevant to determining whether the shared renter exemption should apply to an individuals assessment.

Contact

For policy clarification regarding this initiative, please contact Oona O'Beirne on telephone (02) 9213 7771.

Centrelink Advice

Set out below are considerations provided by Centrelink that can be used to determine whether a person should be exempted from the shared renter rules.

1

Determine whether the customer is a sharer by deciding whether their accommodation fits into one or more of the following categories:

• Boarding house

• Guest house

• Private hotel

• Rooming house

• Lodging house; or

• similar accommodation.

2

Is there a manager of administrator (other than a real estate agent) employed or retained to manage the premises?

3

Are there other employees, such as cleaners, employed to do work on a regular and frequent basis?

4

The residents lack of control over the day to day management of the premises.

5

The existence of house rules imposed by management.

6

Payments for utilities such as water, gas and electricity are not paid for separately from the accommodation charge.

7

Accommodation is not offered on a leasehold basis.

8

There is no requirement for the person to pay a bond prior to taking up the accommodation.

9

The accommodation is available on a short term basis (ie daily, weekly, fortnightly etc-this does not, however exclude long term tenants).

10

The accommodation is not private residential accommodation taking into account the number and nature of bedrooms and bathrooms or the number of residents who are not related to one another living at the premises (ie dormitory-style bedrooms).