If you’ve got a big house with more bedrooms than you need, you might start thinking about getting some money from those empty rooms. One choice you have is taking on a homestay student.
A homestay student is an arrangement where a student, usually from overseas, comes to live with you and your family for a period of time.
The time ranges from weeks, months or even years. Having a homestay student in your home gives them the opportunity to learn another language and go to school or university in a safe environment. If you’re registered as a homestay provider through an official organisation, you can also get paid.
Services Australia may look at the payments you receive for a homestay student differently to that of boarders and lodgers.
With boarders and lodgers, the amount of board that’s assessed is based on how much you provide in services. The more services you provide, the less the income is assessed.
If you provide accommodation only, 70 per cent of the board is treated as income. If you provide lodging and breakfast, we assess 50 per cent of the board. If you provide lodging and all meals, then we only assess 20 per cent of the board as income. If you have a mortgage on your home or pay rent, we can also reduce the amount of board we assess as income by deducting mortgage interest, or the rent you pay.
If it actually costs you more than that and your profit is less, you can reduce the assessable income by showing us evidence of this. For example, the net income on your latest tax return.
More expectations
When a homestay student is taken on through a registered provider, there are more expectations on you to look after the student than there are to look after a boarder.
You’ll be providing a room and meals, of course, but you’ll also be responsible for the student’s care and helping them develop socially. This additional support comes with an expectation of additional costs – more than would be required for a boarder and lodger.
To put it simply, if you have one homestay student through a registered homestay agency, the income you receive won’t count towards your income test as it’s expected that all of it will be used to cover those extra costs.
This changes if you have more than one homestay student living with you at the same time. So, the more students you have staying with you, the more income we may assess.
If you are thinking of taking on a homestay student through a registered organisation, please call our Financial Information Service first to discuss how it might impact your payments. Ring 132 300 and say ‘Financial Information’ when asked for the reason for your call.
Have you ever received income from people living in your house? Why not share your experience in the comments section below?
Also read: What are the Work Bonus rules and how do they apply?
