Temporary vacation of principal home 102-03010030

When a customer temporarily vacates their principal home, the home continues to be considered their principal home for an initial 12 months. Therefore the:

• customer is a homeowner
• home is exempt from the asset test, and
• customer is assessed under the homeowner allowable asset limit

This exemption applies even if the customer indicates their absence may be longer than the 12 month period.

If a customer sells their principal home, the portion of the proceeds which the customer intends to use to purchase, build, rebuild, repair or renovate a new principal home are an exempt asset for up to:

• 12 months from the date of sale for sale before 1 January 2023, with an extension of up to 24 months total in some circumstances
• 24 months from the date of sale for sales from 1 January 2023 onwards, with an extension of up to 36 months total in some circumstances

Home is lost or damaged

When the customer's principal home is lost or damaged the temporary absence can be extended up to a further 12 months if certain criteria are met.

To gain an extended exemption beyond 12 months and up to 24 months, the customer must have a continuing intention to purchase, build, rebuild, repair or renovate their principal home and have:

• made reasonable attempts to obtain a new principal home. This could be to purchase, build, rebuild, repair or renovate their principal home, and
• been making these attempts within 6 months of the loss, damage or sale of the principal home, and
• experienced delays beyond their control in obtaining a new principal home

If one of the above criteria is not met, the customer cannot gain an extended exemption past 12 months up to 24 months.

If the customer moves into another property that they own, this property will still be assessed as an asset while their principal home is exempt from the asset test.

Unable to return from overseas travel

When a customer has vacated their home temporarily to travel overseas and is unable to return due to reasons beyond their control, for example due to Coronavirus (COVID-19), they may be eligible for an extended exemption. The period of the exemption will depend on the customer’s individual circumstances.

A customer can have 2 consecutive exemptions from the assets test if their circumstances warrant. For example, a customer may have temporarily vacated their principal home with the intention of travelling for 12 months however, only 6 months into this exemption they stopped travelling and moved into their parent's home to provide care for one or both of them. The 2 year exemption starts from when the customer starts to provide care.

A new 2 year exemption period does not apply if the customer moves from one care situation to another care situation.

However, a person cannot ‘stack’ a 12 month absence for any reason on to one of the other statutory periods for the same purpose. For example, a 2 year absence when they enter aged care followed by another year for the same reason

When the customer leaves their home to enter a care situation due to an illness or to provide care, the home continues to be considered their principal home, however:

• the intention to return home is irrelevant
• they may be eligible for a two year exemption

See Vacation of home due to illness and Vacation of principal home to provide care.

Customers only receiving Family Tax Benefit (FTB) and/or Child Care Subsidy (CCS) are not asset tested, therefore this procedure only applies in determining their home ownership status.

When a customer temporarily vacates their principal home, which they own, a vacation of home review is set before the end date of the exemption period. For a temporary vacation of home, once the exemption period has expired, if the customer has not returned to their principal home:

• they are assessed as a non-homeowner, and
• the principal home is an assessable asset

Non-homeowners who temporarily vacate their principal home are not subject to a vacation of home review.

An escalation for a vacation of home review may be needed for:

• customer request for more time to provide requested information
• customer seeking an extended exemption
• restoration from suspension due to non-compliance with a home vacation review (including if the customer passed away)

Note: if the customer has passed away when the payment is suspended, HVR processing are to restore payment from the date payment was suspended and finalise the review activity. Service Officer(s) in service centre or Smart Centres can then proceed with DEA action.