Heath and Secretary, Department of Social Services (Social security)
[2025] ARTA 1859
•8 September 2025
Heath and Secretary, Department of Social Services (Social security) [2025] ARTA 1859 (8 September 2025)
Applicant: Mrs Heath
Respondent: Secretary, Department of Social Services
Chief Executive Centrelink
Tribunal Number: 2025/S194693
Tribunal: General Member A Shelley
Place: Canberra
Date: 8 September 2025
Decision:The Tribunal affirms the decision under review.
SOCIAL SECURITY – Age Pension – rent assistance – retirement village – special resident – ceased to be a member of a couple – individual residence contribution – paid entry contribution of more than the extra allowable amount – monthly maintenance fee is rent – ineligible homeowner – not eligible for rent assistance – decision under review affirmed
Names used in all published decisions are pseudonyms. Any references appearing in square brackets indicate that information has been omitted from this decision and replaced with generic information pursuant to subsection 201(1A) of the Social Security (Administration) Act 1999.
Statement of Reasons
BACKGROUND
This is an application by Mrs Heath for review of a decision by Services Australia (Centrelink) that rent assistance is not payable as part of her age pension.
From 2003, Mrs Heath, now [age], has lived at [Retirement village 1], which is an over 55s retirement village. At commencement, she and her late husband (who passed away in about 2014) made a licence payment of $135,000, and Mrs Heath pays a monthly maintenance fee, currently $[amount].
On 28 June 2013, Mrs Heath contacted Centrelink to test her entitlement to rent assistance but was found not to be eligible.
On 18 and 27 June 2024, Mrs Heath contacted Centrelink about rent assistance again. An officer recorded that they thought Mrs Heath was entitled to rent assistance. A request for internal review was concurrently recorded, though, on the basis that Mrs Heath sought a period of arrears.
Rent assistance was paid from about June to September 2024.
On 8 May 2025, a Centrelink authorised review officer (ARO) found that Mrs Heath was not entitled to rent assistance after all.
On 20 May 2025, Mrs Heath applied to the Tribunal for review of the decision. The matter proceeded to a hearing on 1 September 2025. I had before me the hearing papers 1 to 65.
CONSIDERATION
The issues that arise in the application are:
· whether Mrs Heath can have rent assistance included in her rate of age pension, and if so,
· the date from which rent assistance is payable.
The provisions of the law relevant to those issues are contained in the Social Security Act 1991 (the Act).
Can Mrs Heath have rent assistance included in her rate of age pension?
Sections 1070 and 1070B of the Act provide that a person qualifies for rent assistance if they receive a relevant social security payment, they satisfy the common requirements (in section 1070C) and any specific requirements applicable to their social security payment type (in sections 1070D to 1070J).
The common requirements, in section 1070C, are that the person:
· is not in aged care,
· is not an ‘ineligible homeowner’, and
· is liable to pay rent over a certain threshold.
Specific requirements arise for age pension recipients only if the person or their partner receives family assistance (see section 1070D). That is not the case here.
The rate of payment depends on the person’s payment type, family situation and amount of rent paid (see sections 1070K and 1070L).
Subsection 13(1) of the Act provides that an ‘ineligible homeowner’ is a homeowner other than:
· a homeowner by virtue of paragraph 11(4)(c) – in turn, that provision says that a person is a homeowner while the proceeds of the sale of a home are disregarded, for the purposes of an assets test, while building, rebuilding, repairing or renovating what will become their principal home,
· a person who is absent from their principal home (of which they are a homeowner) while providing a substantial level of care for a person in another private residence for less than 2 years,
· a person who is in a care situation but is not residing in a retirement village,
· a person who pays for the use of a site for a caravan, vehicle or structure that is their principal home, and
· a person who pays amounts to moor a vessel that is the person’s principal home.
Sections 1150 of the Act provide that if a person is a ‘special resident’ and their ‘entry contribution’ is more than the ‘extra allowable amount’, they are taken to be a homeowner for the purposes of the Act.
Section 12C of the Act provides that a retirement village is a ‘special residence’ and a resident of a retirement village is a ‘special resident’.
Subsection 1147(1A) of the Act says that if a person took up residence in a retirement village as a member of a couple but has ceased to be a member of a couple, their entry contribution is the individual residence contribution for their right to live at the village, plus any amount paid for the current right to share the home with a partner.
Section 1148 of the Act provides that the ‘extra allowable amount’ is the difference between the ‘homeowner AVL’ and ‘non-homeowner AVL’ (which is an initialism meaning assets value limit).
Section 13 of the Act provides for what constitutes rent. Subsection (2) says that amounts payable by a person for services provided in a retirement village (that is the person’s principal home) are rent. Subsection (3AA) says:
To avoid doubt, an amount that is paid or becomes payable by a person is not rent in relation to the person (either at the time when it is paid or becomes payable or at any later time) if the amount is, or forms part of, a special resident's entry contribution in relation to the person in respect of a retirement village under section 1147, whether the amount is paid or payable (whether wholly or partly) in a lump sum, by instalments or otherwise.
None of the facts of Mrs Heath’s case are in dispute. As set out by way of background, she has lived in what she referred to as a ‘lifestyle village’ since 2003, initially with Mr Heath. There is a minimum age to take up residence in the village and most of her neighbours are retired. It is a retirement village within the meaning of the social security law.
Mr and Mrs Heath paid the $135,000 entry contribution. She told me there was no change to the arrangement (for example, by way of a partial refund of the entry contribution) when Mr Heath passed away. Mrs Heath said under the arrangement she entered into, when a resident leaves the village, 20% of the entry contribution goes to management and 80% (less deductions for maintenance) goes to the exiting resident. Mrs Heath thought that the proportion of the entry contribution retained by management might increase over the first 5 years of residence (and also that it is now 25% for new residents) but it otherwise does not change over time.
The monthly maintenance fee, paid in addition to the entry contribution, goes to upkeep of the buildings and gardens, some of the utilities, rates and insurance.
Turning to the general requirements for rent assistance, it is apparent that Mrs Heath is not in aged care, and that the monthly maintenance fee (but not the entry contribution) is rent.
The difficulty is with the ‘ineligible homeowner’ criterion.
Centrelink says, and I accept, that the extra allowable amount, from 1 July 2002 (the start of the financial year in which Mrs Heath moved into [Retirement village 1]), was $104,500. Her entry contribution is $135,000.
Ms Heath is not a homeowner in the ordinary sense of the term. But she is a homeowner for the purposes of the Act because she is deemed to be so by section 1150, because she is a special resident who paid an entry contribution of more than the extra allowable amount. She is not a homeowner by reference to the categories set out in subsection 13(1) of the Act.
She is therefore an ‘ineligible homeowner’ and is not eligible for rent assistance.
From what date is rent assistance payable?
It is not necessary to answer this question.
I acknowledge this is a difficult result for Mrs Heath. Having been found to be entitled to rent assistance in about June 2024, and indeed paid some rent assistance over a few months, she made a commitment to have some work done to her premises. Centrelink’s change of position has caused stress and put her in a more precarious financial position than she would have been in if rent assistance had not been granted in the first place. Fortunately, Mrs Heath said that Centrelink had not raised a debt in relation to the temporary payment of rent assistance (I note the ARO recorded a recommendation, but not a decision, for waiver of any debt). As discussed with Mrs Heath at the hearing, though, the Tribunal’s role is limited and goes only to the correctness of the decision under review, and not the consequences of Centrelink’s earlier decision-making.
DECISION
The Tribunal affirms the decision under review.
| Date(s) of hearing: | Monday, 1 September 2025 |
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