Purchasing another residence 108-04070020

If the customer is advising of the purchase of land, a deposit or a progress payment for the purchase or building of new principal home after the sale of a former principal residence:

Check the customer’s record for a DOC to support the previous sale of the home and the Accommodation (AC) screen to confirm if the Reason Home Vacated field is coded as SAL

Does the customer have a sale of home exemption in place?

• Yes, go to Step 2
• No, go to Step 3

Is the customer enquiring about an extended exemption for the proceeds of the sale of the principal home due to a delay in the purchase, building, rebuilding, repairing or renovating for a new principal home?

• Yes, see Step 1 in Table 2
• No, go to Step 3

A property is considered purchased when one of the following happens:

• The purchasers enter a legally binding or unconditional agreement to purchase the real estate or property, or
• If the purchase agreement has conditions, all of the conditions have been met

If the customer has paid a deposit, but the sale is not yet finalised, assess the deposit as an asset.

Partially constructed buildings where ongoing building or other costs are still to be paid are deemed to be 'finalised' once a legal contract has been entered into.

Is the purchase finalised?

• Yes, go to Step 4
• No,
• Code the deposit amount on the Other Assets (OAS) screen
• Code 'OTH' in the 'Type'
• Use the date the deposit was paid (this is the day it ceased to be a financial investment) as the date of event (DOV)
• Update other changes as required, for example, bank account details. Record details on a DOC
• Procedure ends here until purchase is finalised

Does the customer intend to make the new residence their principal home?

• Yes, go to Step 5
• No, see Assessment and sale of real estate and timeshare asset. Procedure ends here

Check the Accommodation (AC) screen to confirm the customer’s current homeowner status.

Is the customer a homeowner?

• Yes, go to Step 6
• No, see Non-homeowner purchasing a home. Procedure ends here

Is the customer residing in their new home?

On the Accommodation (AC) screen, check the Reason Home Vacated field. If reason SAL is recorded, this indicates the customer has previously advised of the sale of the former home with the intention to purchase or build another with sale proceeds. Details of the sale of the former home may have already been provided and exempt assets recorded will require updating, along with the sale proceeds amount on the Sale of Home (SOH) screen.

• Yes, update change of address and new accommodation details. Go to Step 7
• No, go to Step 7

To update the purchase of a new residence, all of the following information must be provided:

• The total cost of the new home
• The settlement/completion date of new residence
• Has the former home been sold?
• If the new home is on a block larger than two hectares or on more than one title, customer must complete the appropriate module or questionnaire See Assessing house and curtilage
• If any part of the new home is used to produce income - not including boarders and lodgers, the customer must complete appropriate module, for example, Module F - Business details
• If the home is owned by a private trust, the customer must complete Module PT - Private Trust
• If the home is owned by a private company, the customer must complete Module PC - Private Company

Note: documentation is not required to advise the information, unless a Module or verification is required.

Does the customer know all the details of purchase of new residence and provided required documentation?

• Yes, go to Step 8
• No,
• DOC the customer record with known details for the purchase of the new residence, including what additional information or documentation is required. Use Fast Note - select Auto text, use Assessments and Reviews > Income and assets > Purchase of residence
• Go to Step 12

Where the customer has purchased a new residence and:

• the former home was sold, go to Step 11
• still owns their former home and has moved into the new home, go to Step 9
• still owns their former home and has not moved into the new home, go to Step 10

Advise the customer that as the former home is no longer their principal home, their former home is now an assessable asset. The asset value or income (if any) from the former home may affect their payments from Services Australia.

Issue a request for a completed Real Estate form (MOD R) in relation to the former residence. See Requesting information (CLK).

Go to Step 13.

Advise the customer the purchased property is an assessable asset until they move to the new property and it becomes their principal home. The asset value or income (if any) from the purchased property may affect their payments from Services Australia.

Issue a request for a completed Real Estate form (MOD R) in relation to the purchased property. See Requesting information (CLK).

Go to Step 13.

To update a sale of home, all of the following information must be provided:

• Date of settlement
• Net amount received by customer from sale
• What the customer has done with the proceeds of the sale (for example, purchase of the new home, deposit in bank account)
• Was the home gifted or sold for less than its value?

Documents are not required unless needed to code an income or asset. For example, if a new income stream product is purchased with sale proceeds, the provider must complete a Details of income stream product (SA330) or similar schedule.

Details of the sale of the former home may have already been provided where the customer has previously advised of selling a home, with the intention to purchase or build another principal home with the proceeds of the sale, see Sale of principal home.

Did money from sale of the previous home go:

• towards the purchase, repair, renovation, or construction of the new home? Note: any funds used for repair/renovation after the customer moved into the new residence, are not entitled to an exemption
• to the purchase of other assets or investments?
• to children/charity, etc. See Assessing deprivation/gifting

If there is a difference between the sale proceeds and the purchase price of the new home, any remaining funds from the sale of the former home are assessable under the income and assets test.

Are the details of purchase of new residence (including sale of former home or a change of assets arising out of this) available?

• Yes, go to Step 13
• No,
• DOC the customer record with known details for the purchase of the new residence, including what additional information or documentation is required. Use Fast Note - select Auto text, use Assessments and Reviews > Income and assets > Purchase of residence
• Go to Step 12

If customer cannot provide full details of purchase of new residence (including sale of former home or a resulting change of assets), make a Request for Information. See Resources for ‘Purchase of new residence’ letter template.

Blind customers: if the customer is in receipt of a Means Test free Blind Pension, do not make a request for information as details of income and assets are not required. Exception: if they are receiving rent assistance (except with FTB), or have a partner and the partner is not in receipt of a Means Test free payment.

Procedure ends here until information is provided.

Update the customer record with changes to income and assets related to the purchase of the new residence.

Remove all asset test deduction amounts related to the sale of their former home, from the date of purchase of their new home. If the customer has built or renovated their new home, the exemption ceases when they move into their new home. Staff should complete all updates in Process Direct.

• Check the IVIS screen for a summary of the total sale proceeds asset exempt amount:
• Loan/Encumbrance amount for sales before to 1 January 2023, or
• New Home Deduction Amount for sales on/after 1 January 2023. Deductions may be recorded against savings, shares and/or managed investments
• Select the investment(s) where the asset exempt sale proceeds amount is recorded and key ‘0’ in the:
• Loan/encumbrance amount $: field for pre-1 January 2023 sales (Note: this field is called ‘Asset test deduction amt’ in Customer First), or
• New home deduction amount $: field for sales on/after 1 January 2023. Note: Staff must not leave this field blank
• If land previously purchased for the construction of their new home is recorded on the Real Estate/Business Identifying (REBI) screens, remove it from the date the customer moved into their new home
• If a deposit is coded on the OAS screen, remove it from the date the purchase was finalised
• If any of the funds from sale of home were used to purchase an account-based or short-term income stream that was coded on SVDI, update:
• Balance to $0.00
• Investment/Loan Closed? To Y
• Event Date to the end date of the exemption period
• Any remaining funds in the income stream investment must be coded on SUPS from date exemption period ended. See:
• Adding or updating an account-based income stream
• Adding or updating a term income stream
• If any of the funds from sale of home were used to purchase a lifetime pooled, life expectancy or long-term income stream coded on SUPS screen:
• Cancel the product by coding COM in the Product Cancellation field
• Event Date as the date of purchase of their new home
• If the customer has built or renovated their new home, the exemption ceases when they move into their new home
• Any remaining funds in the income stream product must be coded as a new SUPS investment with the Event Date as the end date of the exemption. See:
• Adding or updating a pooled lifetime income stream
• Adding or updating a life expectancy income stream
• Adding or updating a term income stream

Note: a new schedule to account for funds commuted to purchase or spent on building costs for the new home will be required, in order to code the new gross income amount, commutation(s) and remaining account balance.

Remove coding related to the sale of the former home if applicable:

• Accommodation Circumstances (AC) screen: update Home Ownership code from LHO to HOM and remove Reason Home Vacated (SAL) and Date Home Vacated, and
• Sale of Home (SOH) screen for sales finalised on/after 1 January 2023: Record a new sale proceeds amount of ‘$0’ from the date of purchase of the new home or the date they moved in if finished building/renovating

When the customer provides a MOD R for their former home or if they have not moved into the new residence, See Assessing and coding real estate details

Record details on a DOC. Use Fast Note - select Auto text, use Assessments and Reviews > Income and assets > Purchase of residence

Procedure ends here.

Note: reviews and extended exemptions must be completed by Home Vacation Review (HVR) processing staff only.

If a customer sells their principal home and intends to purchase, build, rebuild, repair or renovate a new principal home within 24 months for sales from 1 January 2023, or 12 months for sales before 1 January 2023, the amount the customer intends to use from the proceeds of the sale of the principal home to purchase or build the new home, is an exempt asset for up to 12 months or 24 months, depending on the date of sale.

Sale proceed exemptions may, in certain circumstances, be extended from the date of sale up to a maximum of:

• 24 months for sales before 1 January 2023 or
• 36 months for sales from 1 January 2023 onwards

An additional exemption of up to 12 months may only be available if the customer has made reasonable attempts in a reasonable period to obtain a new principal home.

Is the customer seeking an extended exemption?

• Yes, go to Step 2
• No, procedure ends here

To gain an extended exemption of up to 36 months for sales from 1 January 2023 onwards or 24 months for sales before 1 January 2023 for the principal home sale proceeds, the customer must have a continuing intention to apply the proceeds of the sale to purchase, build, rebuild, repair or renovate a new principal home and provide documentary evidence to support they have:

• made reasonable attempts to obtain a new principal home, this could be to purchase, build, rebuild, repair or renovate their new principal home
• been making those attempts within a reasonable period after selling the principal home, that is, 6 months for homes sold before 1 January 2023 or 12 months for homes sold from 1 January 2023 onwards, and
• experienced delays beyond their control in obtaining a new principal home

The customer must meet all the above criteria for consideration for an extended exemption. If the customer does not meet one of the criteria, they cannot gain a principal home sale proceeds exemption, beyond the original 12 or 24 month exemption period.

Staff must request that the customer provide documentation to support the delays and to verify action taken by them within a reasonable period.

Has verification been provided, such as, documentation from the builder, local shire council etc. to verify delay and proof of action taken within a reasonable period (i.e. 6 months for homes sold before 1 January 2023 or 12 months for homes sold from 1 January 2023 onwards) of selling the former principal home, for example purchase papers for home or land to build on, or a contract to build?

• Yes, go to Step 3
• No, make a Request for Information. Record details on a DOC. Until this is supplied, the procedure ends here

Has the vacation of home review work item been allocated to a HVR processing Service Officer?

• Yes, go to Step 4
• No, escalate to home vacation review (HVR) processing if:
• customer contact is required
• documents have been provided for a vacation of home review
• an extended exemption has been requested
• In Customer First create an open Work Item using Fast Note. Use Fast Note - select Auto text, use Assessments and Reviews > Income and assets > Action required - Home vacation review
• Do not restore payment if suspended due to non-compliance with a vacation of home review
• Do not select link to existing activity or annotate the existing DOC, as this will finalise the review activity

If scanned documentation is determined to be for a Vacation of Home Review, close the scan Work Item. Include details of documentation received in the Fast Note.

Procedure ends here.

Does the customer meet all the criteria for an extension to the initial exemption period of the proceeds from the sale of the principal home?

• Yes, go to Step 5
• No, advise the customer an extension cannot be granted

Where the vacation of home review is not finalised, continue with the review.

Record details on a DOC. Procedure ends here.

The extended exemption period should be in line with when the customer anticipates, or the contract stipulates, the purchase, building, rebuilding, repair or renovation of the new home will be complete.

At the end of the extended exemption period, if the customer's new home is still not complete, the time period can be further extended provided:

• the criteria continue to be met, and
• the overall time frame does not exceed the total allowable 36 months for sales from 1 January 2023 or 24 months for sales before 1 January 2023 exemption period

The extended principal home sale proceeds exemption, ends when the first of the following occurs:

• the customer ceases to have an intention to apply the proceeds to a new home
• a new principal home is purchased, and the customer does not intend to build, rebuild, repair or renovate the new home
• a new principal home is purchased and the customer's intended building, rebuilding, repair or renovation of the new principal home is complete, or
• the determined extended exemption period expires

If the customer or partner is RCA/CUR on the benefit status line go to Step 7

In Process Direct

• Update the Sale of Home (SOH) screen:
• Change the extension indicator to Yes
• Code the extended exemption expiry date
• If applicable, update any other details required on the customer's record, for example savings account balance if monies have been used for progressive building payments
• Finalise the activity.
• Record details in a DOC. Use Fast Note - select Auto text, use Assessments and Reviews > Income and assets > Extended SAL exemption grant
• Advise customer of the extended exemption by sending a Q999 letter (See Resources for text)

Until a later system release, where a customer or partner is in receipt of RCA they will need to have income recorded under a manual solution for sales finalised on or after 1 January 2023.

Was the date of sale on or after 1 January 2023?

• Yes, if applicable, update any other details required on the customer's record, for example recalculate the deemed income on OINS if monies have been used for progressive building payments. See Sale of principal home for coding instructions and deeming calculator.
• No, if applicable, update any other details required on the customer's record, for example savings account balance if monies have been used for progressive building payments.

Finalise the activity.

• Record details in a DOC. Use Fast Note - select Auto text, use Assessments and Reviews > Income and assets > Extended SAL exemption grant
• In Customer First, create a manual review on the Review Registration (RVR) screen and complete the fields as follows:
• Service Reason: customer's payment type
• Review Reason: select most appropriate reason
• Due Date: 6 weeks prior to the extension period end date
• Source: INT
• Date Of Receipt: today's date
• Notes: 'Extended exemption for vacation of home review granted until xx/xx/xxxx. Check record and return to OB 108-04070020 for action.'
• Keywords: VOH
• Workgroup: leave blank
• Position: leave blank
• Transfer to Region: leave blank
• The review will mature on the Due Date coded in the RVR activity. Workload Management will allocate the review for manual action
• Advise customer of the extended exemption by sending a Q999 letter (See Resources for text)