DATE OF ISSUE: 29 SEPTEMBER 1994
RENT ASSISTANCE - RENT AMOUNTS PAYABLE AS A CONDITION OF OCCUPYING PREMISES
The purpose of this Departmental Instruction (DI) is to clarify current policy and legislative provisions regarding the assessment for rent assistance purposes of rent amounts payable as a condition of occupying premises.
2.A Western Australian Administrative Appeals Tribunal (AAT) decision was handed down in October 1993 (re Ball) which involved a veteran who was paying rent for the use of a site in a caravan park. The pensioner occupied the site as his principal home on the condition that a flat rate site fee was payable. An additional condition of occupancy of the site was that electricity used by the pensioner was not included in the flat rate site fee and would instead be metered for the pensioner's site and billed to the pensioner as a weekly surcharge payable to the caravan park owner.
3.In this particular case, the Department of Veterans' Affairs (DVA) originally assessed rent assistance as only being payable in respect of the rent amount payable by Mr Ball for the use of the site for a caravan. This decision was arrived at through application of sub-paragraph 5N(2)(a)(v)(A) of the Veterans' Entitlements Act 1986 (VEA), as shown in the abbreviated extract below (full text of sub-section 5N(2) at Attachment A):
"(2) Amounts are rent in relation to the person if:
(a) the amounts are payable by the person:
(v) for the use of a site for:
(A) a caravan or other vehicle;"
The AAT Decision and Current Legislative Provisions
4.The AAT observed that sub-paragraph 5N(2)(a)(v)(A) of the VEA did indeed apply but that sub-paragraph 5N(2)(a)(i) also applied in that an amount payable as a condition of occupancy of rented premises constitutes a "rent" amount. Sub-paragraph 5N(2)(a)(i) of the VEA reads as follows:
"(2) Amounts are rent in relation to the person if:
(a)the amounts are payable by the person:
(i)as a condition of occupancy of premises, or of a part of premises, occupied by the person as the person's principal home;".
5.Further, the AAT noted that sub-paragraph 5N(2)(a)(i) and sub-paragraph 5N(2)(a)(v)(A) are not mutually exclusive due to the operation of Section 5N(3) as quoted below:
"(3) Sub-paragraphs (2)(a)(ii) to (vi) (inclusive) do not limit the generality of sub-paragraph (2)(a)(i).".
6.That is, according to the relevant provisions of the VEA, a person may be eligible for rent assistance because they are paying amounts for the use of premises such as a caravan site but the person is also eligible to receive rent assistance with respect to any other amounts payable as a condition of occupying the premises as their principal home.
7.Therefore, in the case of Ball, the AAT decided that the pensioner should be paid rent assistance in respect of the total of:
the flat weekly amount paid for the use of the caravan site; and
amounts payable as a condition of occupying the premises as the principal home, being an average of 12 months worth of the weekly metered electricity usage costs paid to the caravan park owner as a condition of occupancy of the caravan site.
Current Policy Provisions
8.It should be noted that the AAT's approach to the case of Bill, as well as reflecting the intentions of the provisions of the VEA as discussed above, is in accordance with the intention of current DVA policy as stated in the General Orders Service Pension (GOSP) chapter entitled "Rent Assistance". This chapter of the GOSP deals with the definition of rent and states quite specifically that:
"Amounts paid as a condition of occupying a premises can also include rent paid to an owner or landlord, and amounts paid in lieu of rent, eg payments made towards household expenses such as gas, electricity or other bills."
Policy amendment - averaging of rent amounts payable as a condition of occupancy
9.In its decision in the case of Ball, the AAT noted that it is reasonable to average amounts payable as a condition of occupying rented premises as a principal home in order to accurately determine rent expenditure and therefore the amount of rent assistance payable.
10.Effective immediately, this averaging principle is to be applied to all assessments involving rent amounts payable as a condition of occupancy. However, this principle is only required to be applied to all new claims and assessments identified through routine review.
11.Once it is established that a pensioner is required to pay certain amounts of rent as a condition of occupancy of premises:
where the person has only recently moved into the accommodation, such costs are to be averaged over a minimum of the preceding 3 weeks worth of the payments in question; or
where the person has occupied the premises for a period of greater than 3 weeks, such costs are to be averaged over the period for which payment has been made in respect of those particular premises up to a maximum of 12 months worth of the payments in question.
Frequency of review
12.The issue of the regular review of pensioners who pay certain amounts of rent as a condition of occupying premises is currently under consideration as part of the overall Income Support reviews strategy. Standards and Control is investigating this issue and will, in consultation with Branch Offices, consider the formulation of an appropriate review strategy for these cases which will consider options for the method and frequency of review of such cases.
Contact Officer
13.The contact officer regarding inquiries related to this Instruction is Martin Dibb - telephone 06-2896706.
KAY GRIMSLEY
ASSISTANT SECRETARY
INCOME SUPPORT
ATTACHMENT A
VEA Extract - Subsection 5N(2)
"5N.(2) Amounts are rent in relation to the person if:
(a)the amounts are payable by the person:
(i)as a condition of occupancy of premises, or of a part of premises, occupied by the person as the person's principal home; or
(ii)for services provided in a retirement village that is the person's principal home; or
(iii)if the person is residing in a nursing home that is the person's principal home for accommodation in the nursing home; or
(iv)for lodging in premises that are the person's principal home; or
(v)for the use of a site for:
(A)a caravan or other vehicle; or
(B)a structure;
occupied by the person as the person's principal home; or
(vi)for the right to moor a vessel that is occupied by the person as the person's principal home; and
(b)either:
(i)the amounts are payable every 3 months or more frequently; or
(ii)the amounts are payable at regular intervals (greater than 3 months) and the Commission is satisfied that the amounts should be treated as rent for the purposes of this Act.
Note:for retirement village see subsections 5M (3) and (4) and for principal home see subsections 5L (5), (6) and (7).
(3) Subparagraphs (2)(a)(ii) to (vi) (inclusive) do not limit the generality of subparagraph (2)(a)(i)."