Rent includes service costs

Sometimes a client's rent includes service costs. If the client is renting, any service costs must be deducted from their accommodation costs.

Generally, the service costs and cost of accommodation will be itemised separately on the tenancy or rental  agreement. Use the accommodation cost only to calculate Accommodation Supplement.

Where the service costs are not itemised separately MSD will need to assess the cost of the service(s) and deduct it from the total rent, to determine the cost of accommodation.

The first part of the assessment is to have the client ask the landlord to provide an estimate of the accommodation and service costs. Use the accommodation cost only.

Where this is not possible or if there is a disagreement between the landlord and client about the cost split between accommodation and service costs, MSD can use a variety of sources to estimate the service cost depending on what that cost is.

For example, if the total rent includes electricity, the Powerswitch website can be used to calculate the cost of the electricity to be deducted from the total rent.

John pays $250 total rent a week for a room and electricity. As there is only one meter box for the boarding house the landlord is unable to provide an estimate of the service cost.

Powerswitch estimates his weekly electricity costs to be $32 a week. To calculate John's accommodation cost, deduct $32 (electricity) from $250 (total rent). John's accommodation costs are $218 rent a week.