Last amended: What is a special residence?
VEA ? [2]
A residence is a special residence [3] if it is:
An entry contribution [3] is the amount paid in order to secure the person's right to live in the special residence. This amount is used in the special residence basic assessment rules to determine whether the person should be considered a homeowner [3] or a non-homeowner.
More ? [8]
Note: If the special residence is either a granny flat or is subject to a sale leaseback agreement, there are additional assessments to be undertaken before applying the basic assessment rules.
More ? [9]
VEA ? [10]
A retirement village is accommodation intended mainly for people aged 55 years or over. Usually a retirement village is made up of self-care units, serviced units, hostel units or a combination of these. Most retirement villages also have communal facilities such as a dining room, kitchen or entertainment area.
More ? [11]
A granny flat arrangement is where a pensioner acquires either a right to accommodation for life or a life interest in the residence in exchange for a valuable contribution. They are often family arrangements to provide assistance for the pensioner.
More ? [12]
A sale leaseback arrangement allows a person to sell their home but retain the right to live in that home for life or for a fixed period. These arrangements often involve the buyer paying the pensioner an initial payment and agreeing to pay a deferred payment amount to the pensioner at the end of the fixed period, or to the pensioner's estate upon the death of the pensioner.
More ? [13]
Supported residential services (SRS) operate privately in Victoria, New South Wales, South Australia, Queensland and Western Australia. An income support pensioner entering SRS accommodation and required to pay an entry contribution may be able to access the special residence assessment rules.
More ? [14]
Some organisations provide accommodation through a company structure for particular groups, such as the elderly or people with a disability, on a shared equity basis. The amount paid for shares in the company operating the housing is regarded as being the person's entry contribution amount.
More ? [15]
A company title property ownership is not assessed as a special residence.
Company title property ownership occurs where a block of flats, units or apartments is held under a single title. A person with company title property ownership purchases a share in the company that owns the property, rather than purchasing the title for the individual property in which they live. Company title property ownership differs from shared equity housing as the amount paid for the share in the company is not regarded as an entry contribution.
If the person's share in the company gives them a right to live in the property, they are regarded as a homeowner for pension purposes.
More ? [16]
If the pensioner was a homeowner prior to entering a special residence and is retaining ownership of the former home, the asset value of the former home will be included in the assets test. This is because the special residence is now the person's principal home.
More ? [17]
If the pensioner resides in a SRS and is regarded as being in a care situation, the former home can be exempt for up to two years from the date that the pensioner enters the SRS.
More ? [18]
Note: This does not apply to sale leaseback arrangements, where any remaining right or interest in the former principal home will be considered in the assessment of the deferred payment amount.
More ? [19]
According to subsection 5MC(2) of the VEA [46] a special residence is:
According to subsection 5M(3) of the VEA [46], premises constitute a retirement village if:
A granny flat interest exists if a person has established a right to accommodation for life, or a life interest in another person's private home.
Granny flat interests are established by the following methods:
Refer to Section 5MA(2) [46] of the VEA for the full definition.
The principal home has the meaning given by subsection 5LA(1) [46] of the VEA and subsection 5LA(2) [46] 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.
According to subsection 5MB(2) of the VEA [46] an agreement is a sale leaseback agreement, in relation to a person, if:
An entry contribution is the amount paid or agreed to be paid by a person for the right to live in a:
If a person lives in a home subject to a sale leaseback agreement, the entry contribution is the balance of the amount still to be paid by a buyer, at the date of a sale leaseback agreement.
Refer to Section 52M of the VEA for the full definition.
A person is a homeowner if they have a right or interest, which gives reasonable security of tenure in the principal home.
Refer to sections 52Q and 52R of VEA for the definition when determining if a person is a considered to be a homeowner when living in a special residence.
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.
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16013%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn210
[3] https://clik.dva.gov.au/%23
[4] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn211
[5] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn212
[6] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn213
[7] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn214
[8] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn215
[9] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn216
[10] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn217
[11] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn218
[12] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn219
[13] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn220
[14] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn221
[15] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn222
[16] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn223
[17] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn224
[18] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn225
[19] https://clik.dva.gov.au/book/export/html/16013#tgt-cspol_part9_ftn226
[20] https://clik.dva.gov.au/service-eligibility-assistant-updates/all-determinations-order-date-signed-oldest-most-recent/determinations-under-vea
[21] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn210
[22] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn211
[23] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn212
[24] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn213
[25] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn214
[26] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules/entry-contribution
[27] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules/special-residence-basic-assessment-rules
[28] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn215
[29] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules/granny-flat-arrangements
[30] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules/sale-leaseback-arrangements
[31] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn216
[32] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn217
[33] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn218
[34] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn219
[35] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn220
[36] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/925-special-residence-assessment-rules/supported-residential-services
[37] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn221
[38] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn222
[39] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/923-additional-assessment-rules-certain-types-residences/company-title-property
[40] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn223
[41] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/922-basic-principles-assessment/principal-home
[42] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn224
[43] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/924-care-assessment-rules/care-assessment-rules
[44] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn225
[45] https://clik.dva.gov.au/book/export/html/16013#ref-cspol_part9_ftn226
[46] http://clik.dva.gov.au/legislation-library