Last amended: 10 August 2012
VEA → [2]
The value of any right or interest of a person, their partner [3] or both of them in the principal home [3] that gives security of tenure is a disregarded asset [3].
More → [4]
A person, including a person who is a member of a couple, may only have their right or interest in one residence disregarded for assets test purposes. Where members of a couple (including an illness-separated couple) reside in different homes, the full value of the residences other than the principal home are assessable. Generally, where residence is shared across more than one home, the home of greatest value is determined to be the exempt asset.
VEA → [5]
Curtilage [3] is the land adjacent to the exempt principal home. A certain amount of curtilage is disregarded for the assets test [3]. The amount of curtilage that is exempt depends on whether the private land use test [3] or the extended land use test [3] is satisfied. Under the private land use test, up to two hectares [3] on the same title as the principal home may be exempt. Under the extended land use test, all land on the same title as the principal home may be exempt.
More → [6]
VEA → [7]
If the principal home is sold, the value of the proceeds is assessed as an asset, unless the proceeds are likely to be used to acquire a new principal home within 24 months.
The portion of home sale proceeds that the person intends to use in acquiring the new residence will be a disregarded asset. The proceeds can remain a disregarded asset when progressively used for the new home. For example, to purchase land on which they intend to build the new home or to make progress payments for construction of the new home. The asset exemption ceases at the earliest of:
Note: Home sale proceeds, including any portion considered a disregarded asset, remain subject to the deeming provisions under the income test. As of 1st January 2023, only the lower deeming rate will be applied to home sale proceeds intended for acquiring a new home during the exempt period. When a progress payment is made for the construction of the new home, the deductible asset amount and the financial asset value should be reduced accordingly to ensure the correct deeming calculation. The deposit and any progress payments, at the time of being put towards the construction of the new principal home, acquire exempt principal home status.
More → [9]
If the person has acquired their new principal home but is prevented from immediately occupying it, the exemption may continue for a reasonable period. For example, occupancy may be delayed by an existing lease, or if the vendor needs to remain in residence for a period. If the continued exemption period would exceed 24 months from the date the former home was sold, please seek advice from Policy Advisings Income Support [10],
VEA → [11]
If a person sells their principal home on terms and purchases another residence on terms, only the balance due from the sale that is to be applied to the purchase of the new residence is an exempt asset. The exemption applies for the duration of the terms under respective agreements. Neither the standard 24 month exemption period, nor the extension applies to these cases.
VEA → [12]
Compensation and insurance payments received by a person for loss of, or damage to the principal home's buildings, plant or personal effects [3] are a disregarded asset for 12 months from the date that the payment was received. Compensation and insurance payments can be regarded as including payments received outside a formal contract of insurance (for example, to include government grants or public donations) provided these additional payments are intended to compensate the person for loss of or damage to buildings. The exemption applies to any payments of compensation or insurance received, and is not limited to the value of the loss or damage incurred. Compensation and insurance payments received for loss or damage to the principal home's building, plant or personal effects are exempt from assessment for 12 months., regardless of whether those payments are subsequently applied towards the rebu — ilding of the principal home.
If the person uses all or part of the payments received to repair/rebuild their old home or acquire a new home the total value of this payment can remain a disregarded asset even when progressively used to repair, rebuild, buy or build the home, such as for land or buildings. The value of the repair/rebuild, plus the value of the land that is part of the principal home and any previous structure already on that land, is disregarded under the assets test until the earliest of:
The exemption provision concerning received amounts of insurance or compensation is independent of the exemption provision concerning repairing/rebuilding or acquiring a new home. In the event that there are residual amounts after rebuilding/buying and 12 months has not elapsed, those residual amounts of compensation and insurance payments remain exempt until the end of the 12 month exemption period.
Note: Compensation and insurance payments for a lost or damaged principal home while considered a disregarded asset, are also exempted from the deeming provisions under the income test.
More → [14]
This approach also applies to compensation and insurance payments for lost or damaged real estate property.
More → [15]
Certain assets to be disregarded relating to the Principal Home
Section 52(1) (a) [16] VEA
Section 52(1) (b) [16] VEA
Section 9.2.2 Basic Principles of Assessment [18]
Section 9.2.7 Departure from the Principal Home [19]
Section 10.3.9 Home Owned by Private Trust or Company [20]
A person's 'partner' is someone who is a member of a couple with that person.
The principal home has the meaning given by subsection 5LA(1) [41] of the VEA and subsection 5LA(2) [41] 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.
A disregarded asset is one that is not included when calculating the value of a person's assets under the assets test, irrespective of its value.
For a full legislative definition see Section 52 of the VEA [42].
Curtilage is the land adjacent to the exempt principal home [3]. A certain amount of curtilage is disregarded for the assets test. [3]. The amount of curtilage that is exempt depends on whether the private land use test [3] described in section 5LA(3) of the VEA, or the extended land use test [3] described in section 5LA(4) of the VEA, is satisfied. Under the private land use test, up to two hectares on the same title as the principal home may be exempt. Under the extended land use test, all land on the same title as the principal home may be exempt.
One element of the means test for income support pensions whereby the rate of pension payable to a pensioner reduces progressively as their assets increase above a certain threshold known as the assets value limit (AVL). [43]
The private land use test is applied to all income support recipients with private land of two hectares [3] or less adjacent to the principal home [3] as described in section 5LA(3) [41]of the VEA [41], or with land of more than two hectares adjacent to the principal home when they fail the extended land use test.
The extended land use test is applied to income support recipients of veteran [glossary:pension age:DEF/Pension Age] whose [glossary:principal home:DEF/Principal home] is on a property of more than [glossary:two hectares:DEF/Two Hectares] as described in [glossary:section 5LA(4):] [44] of the VEA.
4.9421 acres.
For asset test purposes, personal effects and household contents include;
The following assets are not considered to be personal effects:
Links
[1] https://clik.dva.gov.au/user/login?destination=node/16462%23comment-form
[2] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn237
[3] https://clik.dva.gov.au/%23
[4] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn238
[5] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn239
[6] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn240
[7] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn241
[8] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn242
[9] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn243
[10] mailto:PAIS@dva.gov.au
[11] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn244
[12] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn245
[13] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn246
[14] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn247
[15] https://clik.dva.gov.au/book/export/html/16462#tgt-cspol_part10_ftn248
[16] clik://LEGIS/VEA/section 52(1)
[17] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn237
[18] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/922-basic-principles-assessment
[19] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/927-departure-principal-home
[20] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/103-business-structures-and-trusts/1039-assessing-assets-private-trust-or-company-01012002
[21] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn238
[22] clik://LEGIS/VEA/section 5LA(3)
[23] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn239
[24] 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
[25] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn240
[26] clik://LEGIS/VEA/section 52(2)
[27] clik://LEGIS/VEA/section 52(2A)
[28] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn241
[29] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/927-departure-principal-home/sale-or-deprivation-home
[30] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/927-departure-principal-home/extension-home-proceeds-exemption
[31] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn242
[32] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/95-deeming-provisions/954-deeming-savings-investments/deemed-income-savings-investments
[33] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn243
[34] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn244
[35] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn245
[36] https://clik.dva.gov.au/compensation-and-support-policy-library/part-9-principles-determining-pension-rate/92-residential-situation/927-departure-principal-home/temporary-absence
[37] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn246
[38] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn247
[39] https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/102-assets/1024-assessing-personal-assets-and-investments/assets-value-property-and-real-estate
[40] https://clik.dva.gov.au/book/export/html/16462#ref-cspol_part10_ftn248
[41] http://clik.dva.gov.au/legislation-library
[42] http://www.comlaw.gov.au/Series/C2004A03268
[43] http://clik.dva.gov.au/glossary/assets-value-limit-avl
[44] http://clik.dva.gov.au/node/32981