Rent increases are squeezing many pensioners who are already battling cost of living pressures, while waiting for 20 September to bring an increase to their fortnightly payments. Another $5 increase to rent assistance will accompany the pension increases on 20 September, easing some of the pressure.
Commonwealth Rent Assistance can be a crucial element in meeting the cost of accommodation for many retirees. It applies to more than rent on a private home or apartment, and it may even apply if you buy into a retirement village or a land lease community too.
There are retirement villages such as Ingenia Gardens and Eureka Villages where all of the homes are offered under a rental contract, in other villages such as some of those operated by Lendlease a rental style arrangement may be offered on some of the homes. While in many not-for-profit villages including some operated by Bolton Clarke you can find homes where you pay a substantially discounted entry price combined with a weekly or monthly rent.
When it comes to retirement villages, as a general rule, you can claim rent assistance if the price you pay for your home is below the Centrelink Extra Allowable Amount. It is the difference between the homeowner and non-homeowner asset thresholds, which as at 1 July 2022 is $224,500. The amount of rent assistance you can claim is based on the ongoing village fees.
If your home is in a caravan park or a land lease community where you own your home and lease the land, you can claim rent assistance on what is called “site fees”, the fee you pay to lease the land your home sits on.
Rent Assistance uses a generous formula for working out how much you can claim with the payment being calculated at 75c per dollar of rent above the threshold. But the payment is not unlimited, and from 20 September the payment is increasing by around $5 per fortnight. From then the maximum amount of rent assistance will be $152 per fortnight for singles and $143 per fortnight for couples. The rent thresholds (which is the point below which rent assistance is not paid) will be $135 per fortnight for singles and $219 for a couple. Different rates applying to couples who live separately, sharers and those with dependents.
Let’s look at four real-life examples:
1. Ingenia Gardens
The purpose-built independent living units are self-contained and typically wrapped around a central community room, and residents have the option of renting their unit and self-catering or having one, two or three meals a day included in their rent.
This unit https://www.downsizing.com.au/property/detail/173566 at Ingenia Gardens Melton provides self-catered unit rent for $381/week for a single person and $437/week for a couple; the price to have all meals included is $444/week for a single and $587/week for a couple. That’s just an additional $63 for a full week’s meals! Such a model works on economies of scale: pooling residents’ funds can enable food to be bought and prepared for less than the ingredients alone would cost each household buying small amounts.
The fact that rent assistance applies to this community makes it even more affordable with residents able to claim up to $152 per fortnight (single) or $143 per fortnight (couple).
Aveo have 92 retirement villages across the country most operate on the traditional retirement village model where you buy into the village, entering into a leasehold agreement, pay an ingoing contribution and either an upfront or deferred management fee. Across a range of villages you will find serviced apartments offering a packaged service of meals and weekly cleaning. The purchase price of these apartments is often below the Centrelink threshold, which enables residents to access rent assistance.
This renovated 1 bedroom 1 bath unit at Bridgeman Downs is fully renovated and has easy access to all of the community amenities like the indoor swimming pool, movie theatre, library and restaurant. Located on the northside of Brisbane, the weekly general service charge for this apartment is $333.52 for a single person and includes meals, cleaning, rates and water – only telephone, internet and contents insurance are excluded.
Bolton Clarke has 36 retirement villages across Australia. Retirement village units in Bolton Clarke’s portfolio range from very affordable through to premium offerings, comprising newer larger units in villages in sought after locations.
At Bicentennial retirement village in Mackay, the single level homes offer comfortable, easy open plan living and have their own private courtyard and air conditioning. The village itself is located in central Mackay, just a few blocks from the beach and parklands.
The one bedroom homes are very affordable and offer great flexibility in terms of your payment options. There are five different contract options available to incoming residents – 4 of which can enable the resident claim rent assistance.
For example, this beautiful 1 bedroom single level home can be purchased for anywhere between $180,000 (with a 30% Deferred Management Fee) through to just $72,000 with a 100% Management Fee) and 2 other options in between, and all of these options give residents access to rent assistance.
4. Ingenia Lifestyle
Ingenia Lifestyle have 20 Land Lease Communities across New South Wales, Queensland and Victoria, catering to Australians over 50 seeking connection, community and security in a purpose-designed community.
Freshwater, an Ingenia Lifestyle community located north of Brisbane, offers an expansive clubhouse and low-maintenance homes in a peaceful rural setting close to amenities.
The brand new homes are priced between $438k and $598k, with homes ranging in size from two bedroom, one bathroom and a single garage to two bedrooms plus a study, two bathrooms and a double garage.
The site fees at Freshwater range from $195 to $199 per week and due to the land lease community ownership model, where you own the home and lease the land on which it sits, it means that residents can claim rent assistance.
*The information contained in this article is general in nature and does not take into account any person’s individual objectives, financial situation or needs. It is not intended to imply any recommendation, opinion or advice. You should seek advice from a qualified professional about your particular financial situation, needs and objectives.