Rentstart bond loans - a few things to keep in mind

A couple of weeks ago we mentioned an anticipated change to Rentstart - the suite of assistance 'products' from Housing Pathways that aims to help social housing clients secure homes in the private rental market (helpful, indeed, if you're waiting approximately 5-10 years for a house, or being kicked out of social housing because you've started a job).

Rentstart helps out with a few extra dollars towards the bond at the start of a tenancy. It's currently provided by way of a grant, and any unclaimed money is returned to the funding pool at the end of the tenancy. Soon, it will be provided by way of a no interest loan, and tenants will have to pay it back - over an agreed period of time, just like any loan - into the funding pool themselves. The plus side of this is that tenants will get the benefit of any refund of the bond when the tenancy is over - after all, once they've paid it back, it's their money. However, as we discussed last time, many landlords are already in the habit of claiming Rentstart money, and some tenants might struggle to hang onto it.

When we discussed this earlier, we didn't know when this change would happen. We'd had some conversations, heard some rumours, and seen the occasional reference to Rentstart bond loans on a couple of updated Housing Pathways application forms... but we were none the wiser about when 'Rentstart Bond Loans' would start.

We can now confirm that this change will take effect on May 1st 2012 - that's next week!

You'll be able to apply for a Rentstart grant right up until April 30th - and we understand that 'live' applications for this type of bond assistance will remain open until May 7th - to allow people in the midst of the process a bit of time to finalise their application, and not miss out on a grant (evidently there's more to this than simply filling out and handing over a form... applicants need to provide various supporting documents as well).

However, any applications received from May 1st onwards will be processed as a Rentstart Bond Loan. So... if you're thinking about applying for bond assistance through the Rentstart scheme, bear this in mind.

Another couple of things to bear in mind: the Tenants' Unions factsheets on bonds and the CTTT, and the contact details of your local Tenants Advice and Advocacy Service. You never know, they might just come in handy.

Social housing applicants: get back in line, or get to the back

The NSW State Government's new policy for managing the social housing register comes into effect next week. This means that if your contact details are found not to be up to date, you're struck off the register. You can join again at the back of the queue.

So if you haven't done it already, get your contact details updated this week – or next Monday 30 April at the very latest. The new rule starts Tuesday 1 May. You can update your details here.

Rentstart bond loans

More news for social housing applicants. We recently discussed the changed way in which the social housing register will be managed (that is, always have your contact details up-to-date, or you'll be struck off the register). Here's another change, coming soon: Rentstart bonds will be loans, and every fortnight you'll have to pay a bit back.

Some background: for years applicants for social housing have been able to get grants of money from Housing NSW to put towards the bond for a tenancy in the private market. Depending on your circumstances, Housing NSW might pay 75 per cent or 100 per cent of the bond. At the end of your tenancy, the money goes back to Housing NSW, unless claimed by the landlord.

And claim it they do. Many landlords and agents have come to see Rentstart bonds as a bit of a gift, and claim them even when they're really not entitled. And tenants often don't defend the claims, because the money doesn't go to them and they're probably still dealing with moving house (although, we do know tenants who have defended claims and gotten the money back for Housing NSW, because of the principle of the thing).

Tenants advocates – and, for that matter, officers of Housing NSW – have had mixed feelings about this aspect of Rentstart bonds. On the one hand, there are landlords and agents rorting it; on the other, it's helping get people housed in a private rental market that treats them very shabbily.

Now it's changing – the Rentstart bonds, that is; not the shabby treatment. The money will be given to eligible persons as a loan, to be repaid to Housing NSW over the next 12, 18 or 36 months.

The repayment period will depend on how much of your income you're spending on rent: if it's less than 45 per cent (only 45!), you must repay the loan over 12 months; if it's 45-50 per cent, you can repay over 18 months. If more than 50 per cent of your income goes on rent, Housing NSW wouldn't usually give you a Rentstart bond for what will be, in most cases, a doomed tenancy, but in the exceptional cases where they do, you can repay over 36 months. Repayments are to be made fortnightly.

Let's consider how this might work in practice, with the example of a typical social housing applicant – a single parent with one kid. This person's income might be about $1100 per fortnight (Parenting Payment, Family Tax Benefits, Rent Assistance). The median rent for a two-bedroom property in Sydney is $900 per fortnight – that's 80 per cent of her income, so she won't be renting that.

Let's say she finds, against the odds, a place for $480 per fortnight, and gets a Rentstart bond loan for the whole of the $960 bond. The rent's just under 45 per cent of her income, so she's got 12 months to repay the loan, at $37 per fortnight. That's on top of a rent that puts her well into 'housing stress'.

If you don't keep up, Housing NSW promises 'early, active engagement' to get you paying again. If you don't repay the loan, you may not get any further Rentstart assistance, and Housing NSW may commence legal proceedings against you to recover the debt.

We don't know when this change will commence – there's no statement we can see on Housing NSW's website, but there are a few mentions of Rentstart bond loans popping up in their paperwork, so expect it to happen soon. Let's hope by then that there's also an effort to let landlords and agents know that Rentstart bonds are not, if they ever were, gifts for them to claim at the end of a tenancy.

Unhousing made easy...

A few days ago there was an article in the papers about a "hidden" social housing waiting list. This is a list of people whose application for social housing have been suspended because they have not updated their contact details, and Housing Pathways do not know how to find them. If/when these applicants make contact again, Housing Pathways reinstates their application and they return to their rightful place in the queue. There are many good reasons why a person might not have updated their contact details, including homelessness or poor mental health.

This is all about to change. Soon applicants who do not stay in touch with Housing Pathways will have their applications closed.

Click here for the pdf version of this factsheet.

Housing Pathways will check-in with applicants every so often, with a request to update details. If applicants don't respond in the required time, their application will be closed.

Anyone on the list who Housing Pathways can't find RIGHT NOW will be asked to come forward and update their details by May 1st 2012.

Those who do not will have their applications closed.

Former-applicants will be encouraged to reapply, but they will be sent to the bottom of the list.

This, as Minister Goward tells us, is to "reward and encourage personal responsibility".

We've been asked to spread the good word.

If you work with someone, live with someone, or know someone who is on the waiting list for social housing, urge them to check that their contact details are up-to-date in the Housing Pathways system. Let them know that if they move house, or get a new phone number, or find themselves couch-surfing for awhile, or living out of their car, or in hospital, or prison, etc... they should contact Housing Pathways to make sure they know all about it.

Shelter NSW has called for letters to Minister Goward to tell her what a bad idea this is. We're inclined to agree. More details are on Shelter's facebook page.