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This topic discusses the following issues and how they can affect RA assessment:
Act reference: SSAct section 13(6) Board and lodging
Board is defined in SSAct subsection 13(1) as the provision of meals on a regular basis in connection with the provision of lodging. However, ONLY the amount paid for lodging is counted as rent for RA purposes.
Note: For the purposes of RA, a payment for lodging is the same as a private rent payment, regardless of whether the lodging is provided in private or government housing accommodation. Government sub-tenant rules apply (3.8.1.80).
Example: An income support recipient paying an amount for board and lodging to a government housing tenant may be eligible to receive RA on the amount identified as the lodging component.
Note: Consideration should also be given to the net rent rules (3.8.1.109).
A recipient who pays amounts for board and lodging should be asked if an identifiable amount is paid for lodging. The recipient's estimate or statement of the amount paid for lodging should generally be accepted.
If the recipient is unable to identify the amount paid for lodging, a two-thirds rule applies. This is explained in more detail below.
If the recipient is being paid YA while living in a BOARDING SCHOOL, the fees are regarded as being paid by the student EVEN IF they are paid by a parent on behalf of the student. Money paid by a parent to cover a YA recipient's rent at a TERTIARY STUDENT RESIDENCE is also regarded as being paid by the student.
Example: Boarding house/hostel type accommodation provided to university students.
Some applicants and recipients are also subject to savings provisions as boarders and lodgers immediately before 13 June 1989.
Act reference: SSAct section 13(1) Rent definitions, section 13(2A) Youth allowance recipients
Policy reference: SS Guide 3.8.1.60 Payments that may be Treated as Rent, 3.8.1.140 Savings Provisions for RA, see Board & lodging savings provisions
The two-thirds rule means that if an income support recipient pays for board and lodging and the amount paid or payable for lodging cannot be identified, two-thirds of the total amount is considered to be for rent.
Example: If an income support recipient pays $60.00 a week for board and lodging and cannot identify the amount paid just for lodging, then $40.00 per week is counted as rent.
Act reference: SSAct section 13(6) Board and lodging, section 13(7) Nursing homes
If an income support recipient is performing services in return for board and lodging, eligibility for RA depends on whether the arrangement is a case of free accommodation in return for services OR simply a way of paying rent to a person who also happens to be the recipient's employer. A key factor is whether the value of the accommodation is included in the recipient's INCOME TEST.
If rent is deducted from the recipient's wage each fortnight for ease of administration, the entire wage would be counted as income and RA may be paid on the cost of the accommodation. In these cases, the 'two-thirds rule' may need to be applied to the deducted amount to determine RA entitlement.
Example: An income support recipient works part-time as a waiter. They reside with their employer, receiving board and lodging. Part of the recipient's wage is deducted each week for accommodation and meal costs. The deduction is considered rent paid by the recipient and RA is calculated on the proportion of this amount paid for accommodation.
If free board and lodging alone is provided in return for services, the value of this accommodation is not income tested (section 8(8)(za)) and the applicant is NOT eligible for RA.
Example: An income support recipient has an informal arrangement whereby they receive free board and lodging in exchange for doing odd jobs around the house and occasional repairs. This income support recipient is NOT eligible for RA.
If an income support recipient is given the right of occupancy of a property (not being a life interest or an equity in the property) in return for the payment of rates or similar, the recipient MAY be regarded as paying rent IF:
Special rules apply when someone is receiving SpB as well as free board and lodging.
Act reference: SSAct section 8(8)(za) the value of board or lodging received by the person, section 13(2)(b) Amounts are rent in relation to the person if:...
Policy reference: SS Guide 3.7.1.80 Determining the Rate of SpB
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Last reviewed: 2 January 2013
