Age Pension: how will it be affected by homestay income?

Tony would like to know how his Age Pension might be affected by providing homestay.

worried senior thinking about full age pension

Renting a room is a hot topic for those trying to manage on a fixed income and after reading a recent article on YourLifeChoices, Tony would like to know how his Age Pension will be affected by providing homestay to students.

Q. Tony
After reading the your recent article on renting a room, my wife and I expressed an interest to the University of Adelaide regarding providing homestay for overseas students.

This arrangement would occur in blocks of five or 10 weeks and any payment we receive would be fully inclusive of meals, accommodation, utilities, outings, etc.

How would this income affect our Age Pension? We are on full Age Pension and receive an annuity of approximately $1600 per quarter. 

Would we assess our additional income on the basis of 20 per cent as indicated in your article? This would come in at well below the $162 allowable income per fortnight. 

A. Firstly, you would need to confirm with Centrelink that your homestay agreement with the university meets the criteria to allow you to have only 20 per cent of any income assessed.

Secondly, the income threshold accounts for all your income. If you receive an annuity of $1600 per quarter, then this amounts to around $266 per fortnight. Any income you receive from your homestay will be added to this income and assessed.

Lastly, you are assessed as a couple so the income threshold that currently applies is $288 per fortnight. This would indicate that you can only receive a net income of $22 per fortnight from any homestay you provide. For every dollar of income you receive over this threshold, your Age Pension will be reduced by 50 cents.


    To make a comment, please register or login
    6th Jun 2016
    G'day folks;

    Re - Tony's query regarding offering Homestay Accommodation to Uni students, & the answer to it, I believe the ' assessment process ' is so antiquated/outdated, it needs a major overhaul.

    Consider these hypothetical scenatios: No. 1: If Tony lived a frugal lifestyle, in a modest home, took a holiday twice a year & after a successful, hard-working career + investments, a perfectly acceptable income as generous as the P.M. it would be acceptable that he wouldn't be eligible for any pension/govermental support.

    No. 2: Copy scenario 1; but in this case, despite his hard-working successful career & investing for retirement; Tony and his lovely wife scrape through week after week on less than $1,500 per month, $18,000 p.a. income ( read pension here) then they should not be penalised, but warmly encouraged to offer student accommodation at whatever rate is acceptable via negotiation.

    Should Tony receive an extra grand a month ($2500 all-in; making his total income 30k p.a.) that extra 12k would go a long way to covering/paying for, at their stage of life, applicable medical expenses, utilities, insurances, etc they currently incur. Multiply that additional $12,000 a year by the millions of honest pensioners living in Down Under, and it's a no brainer as to how many " billions of $ " would remain in Federal Treasury coffers to provide far B.V.F.E.D.S. ( better value for every dollar spent ) on " other " essential services it provides.
    Subsequently there'd be significantly less bureau boffins employed, "ensuring compliance" resulting in even more billions saved in applicable salaries & perks.


    6th Jun 2016
    My friend does occasional Airbnb and she gets slugged by Centre link and has her pension reduced. Yet another friend does hobby jewelry at markets, and doesn't need to declare it as it is a hobby. Yet she gets more than other friend doing Airbnb. Grossly unfair, seems no matter what you do to survive, you will be pushed back into poverty. Tony, by trying to live a reasonable life by taking in uni students, you will lose out. Centre link only want to know what you have coming in, not what your increased costs will be, such as electricity.
    The Bernster
    6th Jun 2016
    Tony will get everything, $200K per year for life, a golden travel ticket plus heaps of other perks. Ohhh sorry wrong Tony, my bad!
    6th Jun 2016
    You naughty person you ! :-) Bronny will get more than that ! :-)
    6th Jun 2016
    A better solution - cut the nonsense. Give all people of retirement age the full pension and tax all income in the normal way. Simple. This gets rid of the bureaucracy associated with monitoring the current ineffective system and puts everyone on an even footing.

    Also you are not punished for saving to supplement your retirement as is happening in the current political climate.

    I am a swinging voter: I am not into parties; just policies; the only way to ever change things is to ensure a formal vote and mark the present government last. That sends a message to many.

    6th Jun 2016
    Totally agree. I Imagine that it would be too difficult though to do away with thousands of pages of confused legislation that past politicians have slaved so hard to produce. And think of all those CLink staff no longer required to monitor assets and income. How would lobby groups get by without endless meetings regarding deeming rates and asset taper rates? No more rubbish from right wing 'think tanks' on middle class welfare, no more bleeding hearts on about pensions only for those who are destitute. Naahh! too logical.

    Find me a party who would, as you rightly say, "cut the nonsense" (and that is not only surrounding pensions) and I would vote them in. Until then I, like you, will happily vote out the illogical, whichever party it is.
    6th Jun 2016
    wow how smart ... so I will have to pay tax (What % ??) of my only earnings pension of $817.50 x fortnight ...great incentive mate .....
    he he he he he I say no more how bloody ridiculous wowo wowo

    Ok let's cut the nonsense yeahhhhhh more money for the politicians pensions wowo how smart guys ...come down to reality you probably have your own home correct ????? well some of us do not ... and keep swinging but careful you may go down and hurt yourself he he he
    6th Jun 2016
    Well Aussie my simian friend, if you are an ape trying to emulate a human, then I have to inform you that in order to live in human society one must put in to the system as well as take out. Who is paying your pension, buying and maintaining infrastructure and administering human societal systems? ALL Aussie humans use these assets and are, or should be, contributing- we do this through the tax system. Including GST.

    However, if you are a human trying to emulate an ape then I suggest that you refuse your pension, don’t pay taxes, and as you don’t have a house anyway, then go find a quiet piece of bushland and live happily away from human society and all the benefits that it provides. So "wowo he he bye bye"
    6th Jun 2016
    *Imagine* .. 'if you are an ape trying to emulate a human" Thank you maybe I am an Ape for you

    .......Typical you have to insult to defend your point you are a typical and I can also insult you but I am not prepare to go down to your level so yes bye bye from this Ape that knows how to keep his place in society ....... you do not whorse me waste time with a person like you

    Bloody hell we still have people of your kind in our beautiful country I do not believe it
    6th Jun 2016
    Aussie, I am not insulting you, I was responding to your “he he he he he and wowowowo and keep swinging but be careful you may go down and hurt yourself he he he.” comment.
    This is not normal language for civilised discussion. I have heard the “wowowohe he he he" in the local zoo, so I could only assume that your comment was an insult, or that you have confused DNA. So if you feel insulted by my response, then I suggest that you try to keep your insults under control, or be prepared to get what you give.
    I have to agree that we live in a beautiful Country but it would not be this way if we all refused to pay taxes on our earnings or expected free handouts from those who do pay.
    6th Jun 2016
    How employees MPs at all levels after a few years employed as MPs and leave parliament or removed because we did not vote for them receive forms of life time pensions and other perks as non employees and can have another highly paid job yet no lowering of life time pension or perks.

    To the best of my knowledge MP after but just a few years as MPs receive life long pensions and other perks when no longer a MP employee of the Australian citizens Why? I note former Holdens ,Toyota and ford former employees after many years will not get life long perks like noted above by there former employer.
    6th Jun 2016
    our annuity is only assessed for the interest portion as the rest if the money was ours to start with,I don't this the annuity should be "income' per se.
    6th Jun 2016
    Fact check YLF I don't think you have this right. Annuities receive favourable treatment by Centrelink because it is a return of capital. Centrelink subtract the deductible amount which means very little if any income is assessed. This would enable Tony to earn more income
    6th Jun 2016
    In addition, Centrelink only want to know when your bank account varies by $2000 for deeming purposes.
    7th Jun 2016
    Unless the return of capital is from deductible amounts held by defined benefit funds and then only 10% can be discounted not the full amount of capital being returned each fortnight.

    6th Jun 2016
    He'd be all right if his surname was Abbott.
    6th Jun 2016
    All of you guys are so complicated ...with super issues, annuities and rentals and interest ???? I do not understand any of that I only understand the pension issues the rest ??? sorry about my ignorance but what's annuities and how relate to pension ???? I assume that is an income of some kind ?????
    6th Jun 2016
    Aussie, you have access to the Internet or you wouldn't be visiting this site, so all you have to do is look for "annuity" with your search engine and "there will be light". You may even see all the way up to Ashtabula!
    Needy not Greedy
    6th Jun 2016
    Lescol's comment is by far and away the fairest system by far are my thoughts, it is very similar to our 'poor' neighbours across the Tasman, if a country barely big enough to land a plane, has negligible minerals or other raw resources compared to us can afford to pay all retirees full pension and tax all income at normal rate why the hell can't we? From someone who has worked for a few years past retirement age until illness made me hang the boots up, I have been through the income reporting saga like lots of others, the bloody Centrelink website down, or crashing during use, stockpiling payslips, notifications to them if you are off work sick, or the employer does not have work for a couple of weeks, letters back and forward, God it is a messy system and must be extremely labour intensive and costly for the department. Maybe I have just answered my own question, less Centrelink managers and staff required, wow a cost saving, we can't have that!
    6th Jun 2016
    How about splitting it - a portion to pay for your costs (food bought to be provided to students, a portion each of power to cook and keep food, water, internet, clothes washing, gas/ electric heating etc... and the remainder as income, as your reward for hosting them. That would bring the income down somewhat.

    6th Jun 2016
    Tony should just keep the homestay income to himself and not tell anyone about it, similar to political parties and donations they receive from unions or big business.
    7th Jun 2016
    Is this even possible? I'd hate to live on edge all the time waiting for centrelink to catch up with us. Where I live there is never enough accommodation for students so surely assisting a few pensioners to provide accommodation is cheaper than building a whole lot more.
    7th Jun 2016
    Not worth the hassle, as there are not just the Tax angle, but the University also checks up on you. The homestay student gets quizzed about, food, accommodation, if their religious needs are catered for, and, yes, even if there has been any sexual advances.
    What happens if one or even both of you get sick? Who looks after the needs of the student?
    With $266 per fortnight, you are better of than the majority of pensioners.
    Not worth the headache.
    7th Jun 2016
    I've volunteered for homestay because I understood our pensions would not be affected. I currently have a relative staying in the accommodation, which is a detached granny flat. So far I have helped out my 2 granddauguhters and their babies, (separately,) several students, and other relatives, and received no remuneration. In several of these cases, notably my granddaughters, they should have been eligible for govt accommodation, but each had to wait 6 months. But I suppose that wont count when I start receiving $180 a week for providing accommodation, wifi, electricity, some meals ??
    7th Jun 2016
    It seems there has been a decision by ATO that the income is not assessable. See
    7th Jun 2016
    It is fantastic that the ATO still continue to have sane people working with in it. A very sensible decision.
    12th Sep 2016
    I turned 65 last December, I applied for the age pension or part there of last May. I am wondering if anyone knows just how long I may have to wait to get an answer, yes or no.

    Its 4 months now?


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles