21st Jun 2018
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Travel SOS: Can I use Airbnb and not ruin my Age Pension?
Author: Ben Hocking
Will Airbnb ruin my pension?

Renting out a room via Airbnb seemed like a good way for Derek to earn extra income, but what does it mean for his Age Pension?

Q. Derek
I have turned part of my home into self-contained Airbnb accommodation. I withdrew a significant proportion of my superannuation and used the funds to convert part of my home into a self-contained unit to earn extra income through Airbnb. Do the changes I have made to my home mean that my home has become an assessable asset for my pension payment? Or do I just have to declare the income that I earn for the income test?

A. If only one part of your home is used to derive an income via Airbnb, then you may well find that this one part of the value of your home is considered an asset. However, it will only be that portion of your home that is classed as an asset, not your entire property.

If you use the area for other purposes and your guests also have access to other parts of your home, then you will only be assessed under the income test, as you have suggested.

You may also be able to claim tax offsets and deductions for the upkeep of your self-contained unit, which may prove financially beneficial.

You should contact Centrelink or seek advice from an accountant to confirm your particular situation.

All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.


Are you eligible for an Age Pension? Do you know your rights? The RetirePlanner™ tool has all the information you need.

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    COMMENTS

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    Noodles
    22nd Jun 2018
    5:59pm
    Why don't people find out what the tax/pension implications are "before" they just go ahead and do things like this.?? Stupidity in my books.
    Cowboy Jim
    23rd Jun 2018
    7:52am
    People involved are mostly older and just 40 years ago all that was possible without losing the pension etc. Have known a bloke in Sydney who converted his whole house into a boarding house and he could live on the income. One has to realise that these days are over, the same as working part time jobs for cash-in-hand.
    MICK
    26th Jun 2018
    8:51am
    Dodge City behaviour by councils is indeed coming to an end Jim. A residential zoning accommodates 'residential amenity' and this is the only use a family home should ever be used for. Unfortunately when somebody makes a quid this seems to carry more weight than the families next door whose life is degraded or in some cases totally destroyed by what a rental property has been turned into.
    ray from Bondi
    23rd Jun 2018
    11:54am
    if you find 10c in the street you have to report it as extra income with the draconian rules in place, as I understand it.
    HarrysOpinion
    23rd Jun 2018
    2:08pm
    You are over exaggerating ray from Bondi. If that 10c exceeds $1 what you can earn per fortnight without affecting your full pension then perhaps.
    GrayComputing
    23rd Jun 2018
    1:34pm
    It is time for all of us to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    Does your MP really like being part of the system that allows this indirect abuse of the elderly?

    This abuse is actually sponsored by our government and forced down to Centrelink and borders on a criminal act.

    Why do MPs normally compassionate persons let this Centrelink abuse happen at taxpayers’ expense?

    Some opposition and independent MPs stand to lose their chance at being part of the needed government changes

    We all need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

    Also contact opposition and independent MPs who can help us to get a fair deal on pensions

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    sunnyOz
    24th Jun 2018
    12:00pm
    I totally concur about the 100's of trips to CL office. I have recently transferred from Newstart, to Aged Pension, at the same time, picking up a 2 day a week job. I could NOT take a full time job due to all the time I have had to phone CL and go in to their offices! The absolute WRONG information they have given me, done to me, and told me about - is a joke! I am the one telling THEM what I need to be paid - they have NO idea. And to think this is what I have to put up with! The number of times I have had to go into a CL office, only for them to tell me - 'sorry - that letter (about demanding more paperwork) was sent to you in error'. Half my day wasted!

    I do not trust them one single solitary bit - how do I know they won't send me a letter in 7/8/9/10 years and say they overpaid me? They had NO idea about the Work Bonus - no idea.

    Also - they do NOT have any obligation to tell you how they calculate any amount paid to you. You have to just assume and trust they are getting it right. As I said, I do not trust them, one iota. You walk in to my local CL office and there are easily over 20 desks. NEVER more than 4-6 manned. Wait is never less than an hour, normally around 2 hours. I always take a book.
    Noodles
    24th Jun 2018
    6:34pm
    I assume people have heard the news that the goal is to have all dealings with Centrelink and other departments done by computer.

    They are working towards no face to face contact so I am wondering what they are going to do with seniors who have no idea of computing, no wish to learn and those who do not have the intelligence to master this at an advanced age.

    I feel very sorry for those who will be caught up in all this.
    KSS
    23rd Jun 2018
    2:15pm
    Not only can this arrangement affect the pension, the fact that it is a self contained part of the house can also mean that CGT may be payable when the property is sold.

    And just for good measure the ATO are targeting air bnb landlords using social media and abnb listing's to track those renting out rooms and not declaring the income!
    The obvious answer is declare everything and hide nothing. The penalties are great and the whining loud for those who don't.
    James@
    23rd Jun 2018
    2:52pm
    I suggest you tell CL nothing. The more they know the less you get paid.
    Cowboy Jim
    23rd Jun 2018
    3:02pm
    Very hard to keep things hidden in this digital age James@. You can try but if you are a home owner they get you in the end. Your advice is spot on for people with SFA but not others.
    sunnyOz
    24th Jun 2018
    11:53am
    Believe me James....they find out. I have just gone through transferring to the aged Pension. I stated value of my car (requirement on the forms needed to fill in). I bought it very cheap, did not state the make/model. BUT - when I checked on the MyGov site, they have clearly stated the make and model of car, AND valued it considerably higher than what I paid for it. When I queried this, they actually have the right to check with state motor registry. They check EVERY thing. I will be getting avery large tax refund this year, they will know immediately and hit me. (but I am taking it all out and using it all for car and house repairs).
    La Verne
    23rd Jun 2018
    3:07pm
    I have done what Derek wants to do. But I keep that AirBnB accommodation available for friends and family to use when needed so it doesn't become treated as a separate assets.
    Also had a Quantity Surveyor do a Depreciation schedule so there are significant deductions available here. Plus , a good Accountant to do Tax Return can find the allowable deductions that will pull your income down - legally. But now Councils are introducing a tourism levy to tax Air BnB hosts, so lots to consider.
    KSS
    23rd Jun 2018
    6:44pm
    States are also legislating the length of time a landlord can rent through abnb if they do not live on the premises. This is to protect other owners in unit blocks who have to put up with holidaying yahoos with no consideration for other residents.
    Noodles
    24th Jun 2018
    6:35pm
    Many neighbours are not at all keen on this type of accommodation. I can see lots of legislation coming in.
    MICK
    26th Jun 2018
    8:46am
    Airbnb can be a scourge and anybody who has had one near them with young party animals will be fully aware of what these places are like. Fortunately our governments have been dragged kicking and screaming to outlaw some of the misuses of residential property. Apparently the residential zoning did mean something after all????
    Renting out rooms is also a difficult way to make a quid. My wife and I tried it overseas last year and had a 50/50 success rate. A couple of hosts were fantastic but two were the most ill mannered, rude and unfriendly people you could ever expect to meet who wanted the money paid but did not want people in their home. We never again rented a room after that experience and now only rent a whole house or apartment which seems to work.

    For the record Airbnb needs to be further restricted and the number of people per house strictly controlled as should be the behaviour of guests. Anybody who believes otherwise might want to dind out first hand what a party house next door to them is like. In the end a home is NOT a place of commerce and those who cry out for the dough need to be put back in their box.


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