Navigating Rent Assistance in Retirement Villages
It’s easy to assume that government rent assistance does not apply for retirement village living, however there are circumstances in which you might be eligible.
Understanding Rent Assistance: What Retirement Village Residents Need to Know
Rent assistance is a non-taxable payment made by the Australian government on top of other pensions and payments. It aims to help those who need extra support to afford rent.
Eligibility Criteria for Rent Assistance in Retirement Villages
To be eligible for rent assistance while living in a retirement village, you need to meet all three of the following criteria.
(Note that this guide is only about retirement village living, though rent assistance may also apply if your downsizing plans involve private rental).
Criteria 1: Your government payment
To be eligible for rent assistance, you need to receive one of the following government payments:
- Age Pension
- Carer Payment
- Disability Support Pension
- JobSeeker Payment
- Farm Household Allowance
You may also be eligible if you are on one of the older categories of government payments that are no longer open to new applications, such as Widow Allowance or Partner Allowance.
If this is you, read on.
Criteria 2: Your retirement village arrangement
If your retirement village is a pure rental arrangement — meaning that you do not pay any upfront or entry cost to move in — then you are most likely eligible for rent assistance. You can skip ahead to the next section.
If you did pay an entry cost to your retirement village and that cost is less than $214,500, then you are also most likely eligible.
(If you’re someone who likes to understand detail, this figure of $214,500 is what the government terms the Extra-Allowable Amount (EAA), which is the difference between the homeowner and non-homeowner asset test rates. To check for updates on this rate, subtract the ‘homeowner’ amount from the ‘non-homeowner amount in any of the columns on this page: https://www.servicesaustralia.gov.au/individuals/topics/assets-test-pensions/53693).
Criteria 3: Your service charges
Service charges are regular payments made to a retirement village to cover shared facilities and services such as gardens, gyms or pools. They can be called ‘service fees’, ‘general service charges’, or ‘weekly fees’.
For the purposes of rent assistance in retirement villages, the government considers services charges to be rent.
To be eligible for rent assistance, your services charges as a single person need to be at least $124.60 per fortnight (or $201.80 for a couple).
Next Steps: How to Secure Rent Assistance as a Retirement Village Resident
Rent assistance payments operate on a sliding scale. For every dollar you pay in rent above $124.60 (or $201.80), you’ll receive 75c rent assistance.
This sounds great but be aware there are maximum limits. For a single person, the maximum rent assistance you can receive, no matter how high your service charges are, is $139.60 per fortnight. This means that, effectively, you’re not getting assistance for any service charges over and above $310.73 per fortnight.
Note that all of these figures are current as at February 2021 but are reviewed regularly by the government.
You can’t apply specifically for rent assistance. If you are eligible, your rent assistance will be paid directly to you by Centrelink along with your other government payment.
If, after reading this guide, you think you might be eligible but aren’t receiving rent assistance, it might be that you need take the time to update Centrelink (now part of Services Australia) as this might prompt rent assistance payments.
If you are receiving rent assistance, just like for all government payments, you need to keep Centrelink up to date on changes to your overall living situation as well as details of the fees you are paying at your retirement village.
Comment from our CEO
Downsizing.com.au CEO Amanda Graham said this little known fact about rent assistance highlights the importance of getting good financial advice before making a downsizing decision.
“If rent assistance is available, it can make all the difference to what you can afford to buy, knowing that you can still manage the ongoing day to day living costs whilst enjoying the new lifestyle.”
“It may even be possible to structure a purchase offer with this benefit in mind, as many retirement village operators have a variety of options available such as negotiating a lower entry price in return for an adjustment of other fees and charges."
Find out more
- Retirement Village Fees and Charges: Your questions answered
- Services Australia Rent Assistance page
If you are looking to research options for downsizing, you’ve come to the right place. Start your search today.
Please note: You should seek your own independent legal advice or make your own inquiries before signing contracts or making decisions, rather than relying only on the information above.
