Granny flat housing payments

Granny flat housing payments

by Christine Hopper

Granny flat housing payments, if Mum sells her home and lives with us, can she pay us?

If Mum sells her home and lives with us then we could be considered to have entered a ‘granny flat arrangement’. Special rules apply to Pensioners who live in granny flat arrangements.

Granny flat housing payments if Mum sells her home and lives with us, can she pay us a lump sum?

If Mum sells her home and lives with us she could pay a lump sum ingoing amount to ‘purchase’ accommodation with her granny flat host for the remainder of her lifetime. A lump sum ingoing amount could allow the granny flat host to build on an additional bedroom plus bathroom to accommodate the granny flat resident in the hosts’ current home.

A lump sum ingoing amount could allow the granny flat host to purchase a larger home which could accommodate the hosts’ family and provide a separate bedroom plus bathroom for the granny flat resident.

If the granny flat resident leaves the granny flat arrangement within five years of paying her ingoing lump sum, her ingoing lump sum could count as a gift to her granny flat hosts for Pension and aged care means testing. Read more about Exiting a granny flat arrangement.

Granny flat housing payments, if Mum sells her home and lives with us can she pay us rent?

For some families, having the granny flat resident pay a regular amount as ‘rent’ could be appropriate. For example, if Mum divides her time between her two daughters’ homes she might wish to pay ‘rent’ each month to her then current host family.

Rent Assistance could be available from Centrelink, or DVA, to help a Pensioner pay rent for granny flat accommodation. Rent Assistance is not payable to granny flat residents who are treated as ‘homeowners’ at Centrelink or DVA.

Granny flat housing payments, if Mum sells her home and lives with us can she pay part of the utility bills and Council rates?

If the granny flat is totally self-contained with its own electricity meter and Council rates and water bills then the granny flat resident could pay these directly. But if the granny flat hosts are billed for the total rates for the whole property then the occupant of a self-contained granny flat could pay an appropriate part. There are no fixed rules; every host and granny flat resident has different financial circumstances.

Granny flat housing payments, if Mum sells her home and lives with us can she pay us board housekeeping money?

The Age Pension is intended to allow retirees to finance a basic lifestyle. Thus the granny flat resident is expected to be using her Age Pension to pay for her food and a share of the utility bills. If the granny flat resident does her own meals and housekeeping then she might only contribute towards utility bills. In contrast, a granny flat resident who has all of her meals plus snacks provided by her host family could be expected to contribute board money.

How much board money a granny flat resident contributes is decided by the granny flat resident and her hosts. A ‘guideline’ could be that if the granny flat resident lived in residential aged care she would be required to pay 85% of the Age Pension for meals, heating/cooling, cleaning, laundry and entertainment.

Therefore, most granny flat residents contribute to the housekeeping account.

A granny flat agreement could reduce the potential for misunderstandings if Mum lives with us.

Expert advice about a granny flat agreement before a senior moves into your household lessens the risk of disagreements later.

A consultation with Christine at Financial Care Services could clarify the granny flat proposal.
Call Christine now on (03) 9808 0338 to book an appointment to discuss your granny flat arrangement.

An illustration of the granny flat resident’s ongoing Pension and other income, could help set a reasonable rate of ‘financial contribution’ to the household before the senior moves in.

Early consideration of Mum’s financial position when she stops living with us could avoid nasty surprises later. Your granny flat consultation at Financial Care Services could cover the “what if Mum eventually needs to enter residential aged care for intensive nursing” and “does Mum need to change her Will to reflect the granny flat arrangement”.

Financial Care Services your independent financial adviser

Financial Care Services is an independent financial advisory service specialising in seniors in transition to new accommodation and DVA Centrelink Pensions.

Contact Financial Care Services to arrange for a granny flat consultation. You will receive the Financial Care Services’ Financial Services Guide and the Financial Care Services Granny Flat Arrangement Personal Financial Facts form.

To make an appointment for confidential, independent and professional advice about pensions, lifestyle or financial issues please contact Christine at Financial Care Services 03 9808 0338.

The information contained in this website is of a general nature only and does not constitute “financial advice”. You should obtain your own personal financial advice before borrowing or investing any money, entering a granny flat arrangement or moving in to any retirement village, lifestyle community or aged care facility.

Financial Care Services is licensed to provide financial advice to individual clients based on their personal situations.
All eligibility for Commonwealth benefits will be determined by Centrelink or DVA, based on your personal position as documented and the legislation and Regulations in force at that time.
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Contact Financial Care Services to start your granny flat discussions.