Tuesday, February 25, 2014

Fact based reporting: part 2 - Commonwealth Rent Assistance

Welcome to part 2 of our reporting on the Productivity Commission's Report on Government Services of a couple of weeks ago. In case you missed it, we ran through the Report's sections on Public Housing.

Today, we look at the reporting on the Commonwealth Rent Assistance. Rent Assistance is a commonwealth funded program that has been running for decades as a support for private tenants who receive income support from the government, and since 2000 as support for families receiving the Family Tax Benefit. Since 2008 it has also been available to Community Housing tenants and other social housing tenants who are not in public housing. For an overview of how Rent Assistance works in private market and the social housing, we cover it in depth in this Henry Review post. It is worth keeping in mind that for much of these numbers, social housing tenants are included, though the benefit of rent assistance to them is negligible as 100% of it is collected by their provider.

There were 421 235 rent assistance recipients in NSW in the year 2013- a full third of the nation's recipients.

Numbers of recipients in housing crisis, paying more than 50% of their income on rent.
Nearly 20% of CRA recipients still spend more than 50% of their income on the rent. This figure would be 34% if not for the payment.
Back in 2003, it was just over 11% and it's been going up almost every year since then, as the caps rise much more slowly than rents do. Along with other government payments, the CRA maximum rates get adjusted with CPI every 6 months.

The recipients of CRA have stayed broadly the same demographic over recent years except for the inclusion of the various social housing tenants who started receiving CRA since 2008. This has effectively changed very little as the recipients of CRA are largely the same cohort as people who live in community housing. 

The age spread of CRA does favour a younger population, mostly due to the parenting payments which comprise almost a quarter of recipients in NSW. It is worrying that all the groups over 60 are overrepresented as well, as rates of home ownership are higher in those older age groups. This suggests elderly tenants struggling to pay the rent without this payment though we certainly don't have the data to say this for sure.

Rent Assistance is an effective payment at assisting vulnerable tenants in the private market, though its effectiveness is being reduced as rents continue to rise faster than the payments can keep up. As the sole government payment directed solely at tenants, we hope it can continue into the future.

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