- Application for a Rental Rebate
- Application Turn-around Time
- Calculation of Rental Rebate
- Tenant relocation
- Date of effect of entitlement
- Duration of Rental Rebate
- Scheduled rebate reviews
- Rebate Extension - Employment
- Income - Tenant and Household
- Stable income
- Fluctuating income
- Deemed (imputed) income
- Relative with no income
- Voluntarily reduced income
- Involuntarily reduced income
- Residents and Occupiers of Movable Units
- Maintenance Payments
- Overseas Pension Income
- Allocated Pension Income
- Interest Earnings including Investments, Savings and Winnings
- Worker's Compensation
- Sickness Benefits
- Lump Sum Payments
- Third Party Accident/Illness Compensation
- Court Award
- Out of Court Settlement
- Common Law Damages
- Joint Tenancy
- Changes in Circumstances
- Permanent Reduction in Earnings
- Additional Household Occupants
- Temporary Visitors
This policy describes the purpose of a rental rebate, its calculation and its payment.
This policy is consistent with the Public Rental Housing Assistance Program (PRHAP).
What is a rental rebate
Rental rebate is an ACT Government subsidy which helps an eligible applicant meet the cost of renting social housing. It is the difference between market rent and the maximum rent a tenant is required to pay. This difference (rental rebate) is rent forgone by Housing ACT.
Rent Rebate arrangements were expanded on 7 June 2006 to include a lawful occupant as well as a tenant. This will be effective when a person is granted an Occupancy Agreement instead of a Tenancy Agreement.
Minimum rent payable
The minimum rent payable is $5 per week.
Maximum rent payable
If the income is such that when the rebate is calculated the rent payable is more than the market rent of the property, the tenant will be required to pay the market rent.
The market rents for Housing ACT properties are assessed by independent valuers every year to ensure that they are equivalent to similar properties on the private rental market. The level of market rent is not altered more than once a year and generally remains unvaried until the next scheduled review of all Housing ACT properties, unless the residence is extended or undergoes a major upgrade.
Tenants who newly enter social housing will be granted a tenancy commencement rebate equal to the market rent for the allocated dwelling for the remainder of the week during which the tenancy is signed plus one fortnight. This initial period is therefore rent free.
Otherwise, a tenant's entitlement to rental rebate depends on his/her income and the income of all members of the household. The level of rental rebate is assessed on the information provided by the tenant with their 'Application for Rental Rebate'. The level of rebate payable is governed by a formula specified in PRHAP (Clause 25).
Application for a Rental Rebate
An application must be made on the approved form (Application for Rental Rebate ) and must contain such information as Housing ACT reasonably requires. Housing ACT may at any time in writing request an applicant to provide further information in connection with an application. The signature on an Application for Rental Rebate must be that of the tenant or their legally appointed guardian. A representative of the tenant may assist in completing the application form.
A complete application has all the sections completed and required documentation attached. For income assessment, acceptable documentation would include the proof of income or the release to allow Housing ACT to obtain this information. However, an application that is not fully completed and does not have all supporting documentation attached should still be accepted and the application date be regarded as the date of receipt.
It is the tenant's responsibility to provide the required information to substantiate the income of all members of their household when:
- applying or re-applying for a rental rebate
- the Commissioner for Social Housing requests additional information
- the Commissioner for Social Housing reviews their rebate entitlement
- there is a change in the household composition, eg where a person moves in or out of the household (this could include a breakdown of tenancy).
Application Turn-around Time
A complete Application for Rental Rebate, containing all documentation, should be processed within seven (7) days of being received.
Calculation of Rental Rebate
The formulas to be applied in the calculation of rental rebate are explained in the Attachment to this policy. They must be used in conjunction with the following:
Wage and Salary Earner
A tenant's rebate entitlement is calculated on the basis of assessable household income. The average of the tenant's gross income over the previous 26 weeks is used to determine assessable income. If the tenant has been employed for less than 26 weeks, gross income over the period of employment is averaged. On-going income (not the averaged) is used in the assessment when the tenant has had a permanent increase or decrease in income during the 26 week period prior to the application.
If, however, the household income drops significantly, a tenant may lodge another application with updated income information. The date on which the new rebate becomes effective is the date the application is received, unless there are special circumstances that prevented earlier lodgment. In that case the rebate may be backdated up to two (2) weeks. In exceptional circumstances the rebate may be backdated beyond two (2) weeks with the approval of the Housing Commissioner or authorised officer.
Assessable income is unaffected by salary packaging or other arrangements that have the effect of reducing a person's taxable income. Gross salary before salary sacrifice is used in determining a person's assessable income.
The intention of this policy is to treat the income of self-employed persons and salary and wage (PAYG) recipients in an equivalent manner, even though a self-employed person will be able to reduce their gross business income by deducting legitimate business expenses to arrive at a net income figure to be used for assessment of their eligibility for rebate purposes. However, the following are non-allowable business expenses for determining the income for rebate purposes:
- Any remuneration including salaries or wages, director’s fees or drawings from the business or equity, paid to any member of the household.
- rent paid to Housing ACT for a social housing tenancy
- donations and gifts including gifts to other household or family members
- depreciation or any other capital allowances
- negative gearing expenses
It is proposed to align the calculation of income for determining the rebate with the timing for lodgement of tax returns so that the basis for assessing rebates will be the income calculated from the tax return and agreed by the Australian Taxation Office, as amended for the exclusions above. Therefore, the self-employed person must provide their latest individual tax return and related assessment from the Tax Office and the detailed Profit and Loss Statement and Balance Sheet endorsed by a certified/registered accountant for the business operations.
If the tax return/Profit and Loss Statement shows a loss or income less than the Centrelink Newstart Allowance or equivalent benefit, the self-employed person will be deemed to be receiving a level of income equivalent to that Allowance.
In cases where the self-employed person earns income as a sole trader, the individual tax return and detailed Profit and Loss Statement and Balance Sheet should be sufficient evidence to determine the income for assessing eligibility for rebate.
In cases where the self-employed person earns income from a partnership, the partnership tax return may be required in addition to the information required above.
In cases where the self-employed person receives income as a Director of a company as an owner or part owner or otherwise of the company or from owning shares in the company, the company tax return may be required in addition to the information required for an individual specified above.
Home Based Child Care Worker Self-employed
The rental rebate of self-employed home based child care workers will be calculated in the same way as for persons operating a business. However, where the person is employed by a child care agency and is on wages, they are assessed as a wage earner.
If the tenant is considered eligible for Family Payment his/her entitlement is deemed as assessable income. The tenant must provide documentation from Centrelink that he/she is not entitled to any form of Family Payment.
Rebate applications that include a carer are assessed as follows:
- live-in carer (non tenant) - the person is treated as a resident
- live-in carer (a tenant) - the person is treated as a normal tenant
- rostered attendant carers - the people are not included in the rebate calculation
The market rent includes a component for fuel consumed and supplied centrally by Housing ACT such as for hot water and space heating. This part of the rent is not discountable, ie. the tenant must pay the rebated rent on the dwelling plus the full charge for heating.
Where a separate charge is made for the rent of a carport or garage, that amount is also not discountable, ie. the tenant must pay the rebated rent on the dwelling plus the full charge for car accommodation.
Non-occupation of accommodation
A tenant or lawful ocupant who:
- is subletting his/her property;
- ceases to reside at or is absent from his/her accommodation without the consent of Housing ACT; or
- is absent from his/her accommodation with the consent of Housing ACT for a period greater than 3 months commencing on or after 1 January 2001;
is not eligible for rent rebate unless Housing ACT determines that special circumstances exist.
Tenant/Resident Entering Residential Rehabilitation
Where a household member enters approved residential rehabilitation including respite care, the full income of that person is excluded from rental rebate assessment for the duration of the residential stay. The Residential Rehabilitation or respite care provider must be an organisation recognised by the Commissioner for Social Housing (click here for the current list of recognised providers), and the person must be required to make a payment towards the cost of the treatment or service. The treatment or service provided must relate to drugs, alcohol, gambling addiction mental health or respite care.
In the case of respite care, a period of 3 days or more but not exceeding 7 days is treated as one week. The income exemption for respite care is limited to 28 days in any financial year.
Sole Occupant HouseholdIn the case of a sole tenant/occupant, the rebate rent is reduced to a minimum $5.00 per week.
Where there are household members other than the person entering rehabilitation, the rebate is calculated on the income of those other residents excluding the absent tenant/resident (the $5.00 per week minimum rebate rent does not apply).
Tenant/Resident Entering Incarceration
Where a household member enters incarceration and that person continues to receive an income, the full assessable income of the person is included in the rental rebate assessment for the duration of the incarceration.
Sole Occupant Household
In the case of a sole tenant/occupant receiving no income, the minimum rent of $5.00 per week applies.
Larger HouseholdWhere there are household members other than a person entering incarceration, the rebate is calculated on the total assessable income of the household, including the absent tenant/occupant (the $5.00 per week minimum rebate rent does not apply).
If a tenant is transferred for any reason, a rental rebate application must be submitted in respect of the new dwelling.
Date of effect of entitlement
Rent rebate takes affect from:
(a) the expiry of any previous grant of rebate; or
(b) the date of application for the rebate: or
(c) if the tenant or occupant was receiving rent rebate immediately before the application and the Housing Commissioner determines that the rebate has increased - a date, decided by the Housing Commissioner, not more than 2 weeks before the date of application: or
(d) if the Housing Commissioner is satisfied that exceptional circumstances exist - from an earlier date decided by the Housing Commissioner.
Duration of Rental Rebate
Where all income earners in a household receive at least one, or a combination of, Centrelink Age Pension, Centrelink Disability Support Pension, Veterans Service Pension, or Superannuation (irrespective of any other income also received from any other source by those persons), a rebate will be granted for 12 months.
Where an income earner in a household derives income from self-employment, a rebate may be granted for a period up to 12 months.
Otherwise, a rebate is granted for 6 months, unless it appears that the household's income will change earlier than this.
For example, where a tenant or resident enters residential rehabilitation, a rebate will be granted only for the expected duration of the stay, or where a person is not approved for Centrelink Case Management payments during a period of benefit suspension, only for that duration of the suspension.
Once a rental rebate has commenced, it will continue for the full approved period irrespective of any changes in household income, except for;
- Where household income reduces, a tenant may lodge a new application for rebate at any time. A new rebate will apply from the Date Of Effect Of Entitlement above.
- Where household income increases because an "independent" person (someone with an income of $100 gross per week or more) joins the household, a tenant must lodge a new application for rebate. A new rebate, or full market rent if the household no longer qualifies for rebate, will apply from the date that person joined the household.
Scheduled rebate reviews
Regular reviews of a tenant's rebate entitlement are carried out to ensure that the tenant receives his/her entitlement based on his/her assessable household income. If a tenant does not submit a complete application for rental rebate by the date requested, the existing rebate will be cancelled and market rent will be charged. Housing ACT may investigate a tenant's circumstances at any time during the currency of a rental rebate period.
Rebate Extension - Employment
If a tenant or other resident of the household starts a job on or after 1 September 2005, the rebate approval period is to be extended by 6 months from the date the employment commences. Employment includes full-time, part-time, casual work and self-employment where the remuneration is at least $100 per week. This applies to all people in the household provided they were approved occupants at the date the existing rebate was granted and they are moving from a situation of no employment to one of employment. No particular duration of employment is required.
There is no limit to the number of times this benefit may be accessed. Although no formal application is required, satisfactory evidence of employment must be produced on each occasion, such as a letter from the employer providing the necessary details. These would include the date the person commenced the job, the weekly remuneration, or the expected number of hours per week and the hourly rate. Persons commencing self-employment will be required to provide a statutory declaration providing the relevant information.
Where the tenant's eligibility for this benefit becomes apparent during a routine rebate review, the tenant should be contacted and invited to provide the necessary documentation to allow their existing rebate to be extended. As in all cases involving the review of an existing rebate entitlement, a check of the previous rebate application should be undertaken in this context.
Income - Tenant and Household
The general income eligibility provisions, as outlined in the Eligibility Policy, apply in the assessment of rebate entitlement (click here for Determination of Assessable Income).
If the tenant has a regular pattern of income, the current continuing income is used in the assessment. If the tenant's income has increased or decreased during the 26 week period and is likely to continue at that level, the new level of income is the basis for calculating the rental rebate.
In the case of a tenant with a fluctuating income, the average of the tenant's gross income over the previous 26 weeks is used in the assessment. Total income over the period is divided by 26 to give a weekly figure.
Deemed (imputed) income
Where a tenant and/or resident is entitled to income from Centrelink and/or another government department but does not claim that income, or where a tenant's/resident's Centrelink payments are suspended and they decline to seek Case Management payments, they will ordinarily be deemed to be receiving it, subject to the circumstances of the case. Where those circumstances appear to require a more conciliatory approach, the matter should be carefully considered in that light. The deemed income will form part of the gross total household income on which the tenant's entitlement to a rental rebate is assessed.
Relative with no income
Where a tenant has a relative living with them who is not in receipt of, nor entitled to, an income (eg. a sponsored migrant), the relative will be treated as a dependant.
Voluntarily reduced income
A tenant who is a member of a union engaged in a 'strike' or other industrial action will not be granted a new or additional rebate for the period of the strike action.
A tenant who leaves employment for reasons within their control or who voluntarily remains unemployed may be deemed to be receiving the appropriate level of income - eg. Newstart from Centrelink.
Involuntarily reduced income
Where a tenant has their income reduced because of unemployment caused by sickness, loss of employment, industrial disruption, or any other cause outside their control, or their union's control, the tenant may apply for a review of their rebate for the period of reduced income.
Residents and Occupiers of Movable Units
Housing ACT approval is required for a tenant to locate a movable unit on-site. Income from persons living in movable units is included in the tenant's rebate assessment.
Child support payments made by one tenant to another tenant living separately are included as assessable income for the tenant receiving the payment.
Overseas pensions are included as assessable income. Overseas pensions may be received instead of, or in addition to, a Centrelink pension.
Allocated Pension Income
Allocated pensions are counted as assessable income.
Reverse Mortgage Income
Income streams, including regular drawdowns in the nature of income, from reverse mortgages are counted as assessable income.
Interest Earnings including Investments, Savings and Winnings
Interest earnings are treated as assessable income and included in Base Income. If no information is provided regarding interest earnings, Housing ACT will deem an interest rate equivalent to the relevant Centrelink Deeming Rate.
Where a tenant receiving a rental rebate becomes ill or injured and has a claim for worker's compensation, rental rebate is reassessed on actual family income. Following settlement of the workers' compensation case, the tenant is required to repay the difference between the current rebated rent and the rebate assessed on the basis of the settlement, for the period covered by the settlement. For rent rebate purposes the period commences from the date the person's income reduces, which may or may not coincide with the date of the accident/incident.
Where a tenant paying market rent becomes ill or injured and has a claim for worker's compensation, rental rebate is assessed on actual family income.
Following settlement of the workers' compensation case, the tenant is required to repay the difference between the rebate reassessed on the basis of the settlement and market rent, for the period covered by the settlement. For rent rebate purposes the period commences from the date the person's income reduces, which may or may not coincide with the date of the accident/incident.
Any reassessment of the rebate will be based on only that portion of any settlement of compensation which has been granted for loss of wages. The three forms of Workers' Compensation payments are assessed differently in the calculation of rent rebates:
- Past Economic Loss - assessed at the rebate formula
- Future Economic Loss - assessed at the rebate formula
- Pain and Suffering -Interest on lump sum payments, including that relating to pain and suffering, is ordinarily to be assessed on the average interest earned over the previous 26 weeks.
If special sickness benefits are received for the whole period of incapacity, the claimant's income is re-assessed at the appropriate rate of worker's compensation. Any repayment made to Centelink will not be taken off the claim settlement.
Lump Sum Payments
Lump sum payments may be received under circumstances listed below:
- Third Party Accident/Illness
- Common law damages
- Windfall - inheritance, lottery/gambling win.
Third Party Accident/Illness Compensation
Examples of third party compensation payments are:
- a court award, with or without costs for income lost, personal injury, property damage and compensation for personal trauma/pain suffered
- out of court settlement with or without apportionment specified.
A full statement of the court's decision or out of court settlement must be provided for the reassessment of rental rebate entitlement. The statement should include:
- a break up of the amount awarded, in particular, the amount to compensate for lost past and/or future income
- the period to which the payment for lost income applies
- if appropriate, the capital sum designated to cover on-going medical expenses from interest generated, and information on whether it is legally quarantined or is able to be converted to recurrent expenditure.
When a tenant has applied for compensation he/she must sign a statement agreeing to a review of his/her entitlement to a rental rebate for the period related to the loss of income, if and when a compensation payment is awarded or negotiated.
Documentation setting out the disbursement of funds is to be provided, including any amounts awarded for pain and suffering. Rental rebate eligibility is based on the amounts awarded for any loss of income (past and future).
Out of Court Settlement
Where the amount awarded is not apportioned to specific purposes, Housing ACT will assume that 50% of the total lump sum received is for the loss of income at the level the person was receiving at the time the income reduces, which may or may not coincide with the date of the accident/incident. Rental rebate will be calculated on that level of income. If the person was receiving a salary package including fringe benefits, only the cash component of the package is taken into consideration when determining the level of income for rental rebate purposes.
Common Law Damages
If action for common law damages is successful after receiving compensation, further revision of rebates granted prior to the settlement will not be made. However, assessable income for a current rebate application will include interest earnings from the net amount remaining after allowable deductions have been made.
Payments may consist of various combinations of:
- cash in lieu of unused recreation leave
- cash in lieu of unused long service leave
- lump sum of employee superannuation contributions taken in lieu of conversion to superannuation pension
- lump sum taken in lieu of a superannuation pension.
The first element above will be treated as assessable income as it is a continuation of the recipient's pre-retirement income. The other elements are not treated as income for the assessment of rental rebate, but any interest earned from their investment will be added to assessable income.
A new application for rental rebate assistance is required if a voluntary redundancy occurs. The application must be accompanied by a letter from the tenant's or resident's employer indicating details of the payout amount and date of separation.
Payments may consist of various combinations of:
- cash in lieu of unused recreation leave
- cash in lieu of unused long service leave
- cash for years of service
- cash in lieu of notice
- lump sum of employee superannuation contributions taken in lieu of conversion to superannuation pension
- lump sum taken in lieu of a superannuation pension.
The first element above will be treated as assessable income as it is a continuation of the recipient's pre-retirement income. The other elements are not treated as income for the assessment of rental rebate eligibility, but any interest earned from their investment will be added to assessable income.
Housing ACT will treat as income for rental rebate purposes:
- interest or net income from any investment of the ad-hoc winnings (eg. rent from property or dividend from shares bought with the winnings, less tax deductible expenses); and
- inheritance or other gift - as above.
The temporary absence of a joint tenant up to 3 months (with the permission of Housing ACT) will not affect the level of rent payable. The rebate will continue to be assessed on the income of the joint tenants and on the income of any other household members.
Changes in Circumstances
When a tenant notifies Housing ACT of a change in circumstances and it is determined that the tenant's rental rebate should increase, the date of effect will be not more than 2 weeks prior to the date of lodgement of the application, unless there are exceptional circumstances.
Permanent Reduction in Earnings
A new application for rental rebate assistance is required if a permanent reduction in earnings occurs. The application must be accompanied by a letter from the tenant's or resident's employer indicating their new wage, or a Notice of Retirement, or severance details and date of effect. Assessable income is based on on-going income.
Additional Household Occupants
A tenant who is receiving a rental rebate must immediately lodge a new Application for a Rental Rebate when a person with an income of $100/week or more joins the household.
Where a person is accepted as a bona-fide visitor a 'period of grace' of 4 weeks is allowed before they are regarded as members of the household and tenants have to declare their income on the rent rebate application.
As well as establishing the relationship of a visitor to the tenant, the issues to be considered when deciding if a person is a bona-fide visitor include where persons:
- have a residential address other than the social housing dwelling and who normally reside at that other address;
- are not on the Applicant List for social housing in the ACT;
- are staying for purposes other than employment; and
- do not have the intention of seeking an extension to the initial visit.
Persons on Newstart Allowance seeking work and persons waiting for other accommodation are not regarded as visitors.
In cases where it might be reasonable to extend the period of grace beyond 4 weeks, for example, where a person is visiting from overseas, consideration could be given to extending the period of grace for a further 2 weeks. However, the period should not be extended beyond 2 weeks, that is, a total period of 6 weeks.
A temporary visitor should not be confused with a temporary resident. A temporary resident is someone who is seeking accommodation for an indefinite period of time.
Documentation provided as proof of income
- must be current, that is, no more than four weeks old when presented
- must be provided on business letterhead
- must include average gross weekly income, total earnings for past 26 weeks, and start date if employed for less than 26 weeks
- must specify for how many weeks the person has been employed.
Documentation acceptable to Housing ACT and generally issued on a yearly basis
- documentation provided by self-employed persons and seasonal workers relating to the previous financial year that is no more than twelve months old
- Comsuper documentation that is no more than 12 months old.
Documentation that is more than four weeks old
Documentation that is more than four weeks old will be accepted only where:
- documentation provided by self-employed persons and seasonal workers relating to the previous financial year is no more than twelve months old.
- income documentation relates to past changes that Housing ACT was not advised of at the time the changes occurred.
Failure to Provide Additional Information
If a tenant does not respond to requests for additional information by the due date, his/her rental rebate is cancelled and market rent is charged from the date of cancellation of the rental rebate.
Review of Housing ACT Decisions
Applicants may appeal decisions by Housing ACT where there is new information or changed circumstances that could affect the original decision. There is an established review protocol that includes an initial internal review by Housing ACT and where appropriate, access to external review mechanisms.
Housing ACT considers fraud to have occurred when a tenant, in order to gain a higher rental rebate:
- deliberately supplies false information
- deliberately fails to provide information
on an Application for Rental Rebate, and in documentation provided to substantiate the income of any member of their household.
Rental Rebate Formulas
In the formulas below;
- Tenant means a person who has signed a Tenancy Agreement.
- Occupant means a person who has signed an Occupancy Agreement.
- Independent resident is any other person in the household who has a gross weekly income of $100 or more.
- Finc (family income) is Family Tax Benefit Part A received from Centrelink, or the equivalent from Department of Veterans Affairs.
- Binc (basic income) is all other income.
Formula 1 - Standard Tenants
The amount to be paid as rent is the lesser of the market rent for the property or the total of;
- 25% of Binc for tenants/occupants.
- 25% of Binc for independent residents who are 18 years of age or older.
- 10% of Binc for independent residents who are less than 18 years of age.
- 10% of Finc for the household.
- Any component of the market rent for other facilities (eg space heating, hot water, garaging) as determined by the Commissioner for Social Housing.
Formula 2 - Assessments at 18% of Income
In 1984 a number of older tenants were given an undertaking that their rent payable would be set at 18% of assessable household income as an incentive to move from under utilised dwellings to Older Persons Accommodation (OPA).
This agreement continues throughout the life of the tenancy. If the tenant or surviving spouse transfers to another property and signs a new tenancy agreement, his/her eligibility for a rental rebate is assessed according to the abovementioned Formula 1 except where it is a Management Initiated Transfer which is treated as an existing tenancy.
Note: These formulas must be used in conjunction with the Policy.
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