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.

At the end of the exemption period, if a customer has not returned to their principal home they may be:

• treated as a homeowner, and
• the principal home is an asset

Vacation of home due to separation

If a customer vacates their principal home due to a separation (not due to family or domestic violence), depending on their circumstances, they may or may not be eligible for the initial temporary absence 12-month asset test exemption.

If the customer has separated but there is the possibility of returning to the property this can be considered a temporary vacation of the principal home.

If the customer has no intention to return to the property this is deemed as a permanent vacation. Refer to Permanent vacation of principal home to assess the principal home.

Note: extended exemptions do not apply. If the customer is unable to return home or sell the home, the assets hardship provisions may need to be considered.

Vacation of home as entering respite

If a customer temporarily leaves their principal home to enter respite care, the home continues to be considered their principal home. If the care receiver is transferred from approved respite care to permanent accommodation, the day the transfer takes place is the day the individual is deemed to have entered the aged care home. See Temporary change of address to an aged care home for Respite Care.

Vacation of home as absent overseas

If a customer temporarily leaves their principal home to travel overseas, and they are still overseas after 12 months, their home in Australia becomes an assessable asset. Note: extended exemptions may apply if a customer is unable to return due to circumstances beyond their control.

Vacation of home as temporarily uninhabitable

If a customer temporarily vacates their principal home, due to loss or damage, including but not limited to a natural disaster such as flood, fire or cyclone damage, their absence will be considered temporary. Note: extended exemptions may apply if criteria are met.

Vacation of home for other reasons

If a customer temporarily vacates their principal home for any other reason, for example to travel around Australia, at the end of the 12-month exemption period, the home will be assessed as an asset and the customer treated as a non-homeowner. Note: extended exemptions do not apply.

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

Sale of home during temporary vacation period

If a customer sells their principal home during a temporary vacation period and intends to purchase another home within 12 months, the amount of the proceeds which the customer intends to use to purchase a new principal home is an exempt asset for up to 12 months from the date of sale.

Sale of home during vacation of home for care situations

If a customer sells their principal home during an exemption period due to a care situation (due to illness or to provide care):

• Single pensioner, the proceeds are immediately assessable under the income and assets tests
• Couples, for the partner who is not in care:
• Sales before 1 January 2023 - the amount of the sale proceeds the person 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
• Sales from 1 January 2023 onwards - the amount of the sale proceeds the person intends to use to purchase, build, rebuild, repair or renovate a new principal home are an exempt asset for 24 months from the date of sale
• Does not intend to purchase another principal home, the proceeds of sale are immediately assessable under the income and assets tests and homeownership status updated

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 to complete or extend a vacation of home review may be needed for a:

• customer providing requested information
• customer asking for more time to provide requested information
• customer seeking an extended exemption for:
• OVE (Absent Overseas) VHP Review
• UNH (Home temporarily uninhabitable)
• SAL (Sale/Purchase of Home Property)
• referral to a Complex Assessment Officer to review a LIF (Life interest) or DEE (Deemed interest in the home)
• restoration from a suspension due to non-compliance with a vacation of home review

If the customer’s payment is suspended due to non-compliance with a vacation of home review, the review must be completed before the payment is restored.

If the customer has passed away when the payment is suspended, 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 Death (DEA) action.