Leverage was requested to provide advice the other day in relation to a tenancy dispute.  This tenant believed they had a COVID free kick to not paying rent throughout the COVID period.

The tenant was the sole contributor to the household income.  As part of her household income, she has for a number of years, received an allowance from a relative in China.  When the Corona virus took effect in China in January 2020, the relative could no longer pay the allowance.

The tenant had not lost their employment.  No hours had been reduced and no-one around her was suffering from the COVID 19.  All that happened, is that, the Relative couldn’t supplement the income.

Part 6A of the Residential Tenancy Act 2010 (RTA) sets out the protections for tenants.  Most of all, it sets out who is to be protected.

Protection is given to people where:-

  • Household income has been reduced by 25%; and
  • That reduction in income has been caused by loss of employment, loss of salary from employment or the tenant or somebody close to them has COVID 19.

This tenant does not fall within any of these criteria.  The tenant’s access to cash may have been reduced, but this income, however, does not fit within the parameters of household income.  It is not related to her employment and therefore is not captured by the definitions in Section 41(b) of the RTA.

What is most interesting is whether these allowances become income.  One wonders if this income has been declared to the Commonwealth Government and therefore taxes paid.  We did suggest to our client that, they should seek a copy of the tax assessments to ensure that the income has been declared to the Australian Taxation Office or suggest that a report to the Australian Taxation Office be made.

The matter is now been heard by NCAT and we await the decision.