Permanent vacation of principal home 102-03010040

When a customer leaves their principal home, the assessment procedures vary depending on the reason for vacation of the home, whether the customer owned the home or not, and what is to happen to the home.

Specific exemptions from the assets test for the former home apply for customers who vacate their home due to their own ill health and enter a care situation and for carers who vacate their home to be closer or to live with the care receiver.

When a customer has had to leave their home due to domestic violence and regardless of whether they have taken up refuge or a lease agreement there is uncertainty about their long-term living arrangements, this can be considered a temporary vacation of the principal home.

When an income support or ABSTUDY customer sells their principal home, any portion of the proceeds intended to be used to purchase, build, rebuild, repair or renovate a new home is disregarded for assets test purposes, if the sale is:

• before 1 January 2023, up to an initial 12 months after the sale. There are provisions to have this exemption extended up to 24 months if the customer meets certain criteria
• from 1 January 2023 onwards, up to an initial 24 months after the sale. There are provisions to have this exemption extended up to 36 months if the customer meets certain criteria

Although these proceeds are exempt for assets test purposes, deemed income is assessed. If the customer uses part of the proceeds of the sale for any purpose, for example, to purchase a block of land or other assets to build a new home, these assets are also exempted under the assets test provided the combined value of exempt assets is no more than the proceeds from the sale of the principal home.

If a customer sells their principal home and temporarily moves into another property they already own, the proceeds of sale likely to be used to purchase a new home may still be disregarded for assets test purposes for up to 24 months after the sale of the original principal home.

In this case, the property they are occupying temporarily will still be assessed under the assets test during that time if the Service Officer is satisfied it is only being occupied temporarily.

If the Service Officer is satisfied that the move is permanent, the exemption of the proceeds of the sale of the former principal home does not apply, but the property they are occupying would be become an exempt asset.

If the customer has a property settlement pending, the percentage of ownership the person has before they are separated remains after the separation until any property settlement is finalised.

If the customer asserts a beneficial or trust ownership different to the legal ownership of an asset, the trust and companies provisions are applied to determine existence of a trust and attribution of income and assets.

If the assets are held in trust, for example, with a solicitor or accountant, the trust and companies provisions apply. The source of the funds and prior legal ownership are used when determining attribution. If a customer is unable to realise assets due to a pending property settlement, the assets test hardship provisions may apply.

Where there is beneficial ownership asserted or there is a claim for assets hardship the case must be referred to a Complex Assessment Officer (CAO).

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