Stopping the homeless "churn"

Minister for Social Housing Brad Hazzard has today announced "the NSW Government is taking a tough stance on the “churn’’ of people from social housing to homelessness and is driving reform for an automatic rent deduction scheme from Centrelink payments." The scheme would see money handed directly from Centrelink to Social Housing landlords - which sounds remarkably like a form of income management - and could affect up to 90% of Social Housing tenants.

Driving the proposed reform is the Minister's concern for children. “I see too many children who have had their lives upended, their schooling disrupted and their health compromised by their family’s inability to pay rent and maintain a secure home,” Mr Hazzard said. “There are times when Governments have to make decisions for the common good and that is why we are driving this across-the-board reform.”

But there's not a lot of evidence to suggest that children are becoming homeless in great numbers because of rent arrears in Social Housing. The Australian Institute of Health and Welfare's latest report into Australia's Welfare (2015) makes no reference to rent arrears in its discussion about child homelessness, pointing instead to "sexual and physical abuse, parental drug addiction and family violence" as likely triggers.

Still, if this is a problem, there are other ways of responding to it. Working with households to get their rent under control springs to mind, rather than evicting them. Our observation is that Social Housing officers can be quick to take off to the Tribunal for an eviction order without first sitting down to talk through whatever difficulties a tenant may be having - or even just finding out what the hold-up might be with the rent. When you're the tenancy manager for some of the most vulnerable low-income households in the country, this would seem a reasonable place to start. It seems all the more important for struggling households that include children.

It's not the first time a reform agenda of this kind has been driven, either. Here's what we said when a similar scheme was flagged back in 2013:

It might sound like a good idea to the Housing Ministers, because it promises to reduce arrears. And lots of public housing tenants think it's a good idea too – so good, in fact, that they already do it, voluntarily, through Housing NSW's Rent Deduction Scheme. 

But there are people for whom this sort of scheme doesn't fit. For example, we've an acquaintance who lives in public housing who has a few health problems. When he gets paid, he doesn't use the money to pay his rent straight away: he uses it to pay one of his doctors. Then he goes to Medicare, gets paid by them, pays another doctor, goes back to Medicare and gets paid by them again. Then he pays his rent. 

This orderly process of payment and repayment would get stuffed right up if a Housing Payment Deduction Scheme got in and took the money first. 

There's bound to be other examples where individual circumstances make the compulsory deductions a bad fit. Maybe the operational policy for the scheme could be so devised to anticipate them all, and provide for housing officers to make adjustments in those circumstances... maybe. 

Or it might be more efficient and effective to let each person judge for themselves whether the scheme fits their circumstances and whether it suits them to use it. Lots of public housing tenants have already judged yes, it suits them – that's great. And that's probably as far as it should go. 

Some thoughts on mutual obligation

In an interesting follow-on from our recent discussion on underemployment and housing insecurity, The Monthly magazine has published an excellent article about Australia's contradictory approach to mutual obligation for welfare recipients. It's recommended reading on the Brown Couch - you can find the online version of the article at this link here. It's a long read, but it really is worth giving it some time over the weekend.

Much obliged

In a nutshell, the article explores our expectations of those who receive government assistance at each extreme of the welfare spectrum - individuals receiving some level of income support at one end, and multinational corporations structured for maximum (sanctioned) tax avoidance at the other.

Somewhere along that spectrum - towards the end where tax avoidance happens - we might also add landlords. Landlords who lost nearly $1.2billion in a single year, as part of their tax avoidance strategies. Landlords who have been wearing these losses in exchange for eye-watering capital gains. Landlords who will tell you that they'll stop investing in housing if you even hint at making life a little bit better for tenants...

The social responsibility that comes with being a landlord is something we've occasionally talked about here on the Brown Couch. We think it's far too easily overlooked. It's worth keeping that in mind, as you're scrolling through The Monthly's article this weekend.

Go on - give it a read.

Young people, welfare, housing and work

The Federal Government's Budget proposal to deny social security payments for 26 weeks to young people out of work is in breach of human rights, says the Federal Parliament's Joint Committee on Human Rights. The Australian Council of Social Services and the Australian Youth Affairs Coalition agree, and so do we.

On the other side of the argument, the Social Security Minister has justified the denial of payments as 'a measure to address youth unemployment by encouraging young people to accept jobs rather than relying on income support at the risk of becoming disengaged – both socially and economically', while another Government member thinks that young people 'in this space' would just spend those payments on cheezels and video games.

The 26-week no-payment period poses a greater threat to young people's social and economic engagement and employment prospects than MSG-laden extruded cheese snacks.

The 26-week no-payment period means young people out of work wont be able to pay their rents. That's bad news for young people out of work – and bad news for young people in work, because landlords and agent will see them as a riskier proposition, and will be less inclined to rent to them.

We were speaking last week with a regional TAAS advocate, who despaired of the 26-week no-payment proposal for just this reason. She explained that in the far-flung catchment of her service, there are some towns with very high rates of youth unemployment and no jobs going, and other towns where the unemployment rate is lower, and jobs can be found. To get a job, those unemployed youths will have to move towns – and they'll need somewhere to live. As the advocate said:

If they're lucky, those boys might be able to line up a job, but if they cannot line up somewhere to rent, they can't take the job up!

 Damage young people's housing prospects, and you damage their mobility and hence their employment prospects. The 26-week no-payment period does this and should not proceed. 

Joint sector statement on Budget social security changes

The Tenants' Union of NSW has joined with the Australian Council of Social Service (ACOSS) and more than 100 other community sector organisations in a statement on social security changes proposed in the Federal Budget.

We, community sector organisations and leaders from around the country, have come together to express our deep concern about changes to social security payments currently being considered by the Federal Parliament.

We support a robust safety net to protect people in the event that they are unable to support themselves due to unemployment, caring responsibilities, disability, incapacity or other unforeseen circumstances.

We recognise that most of us will rely on this safety net at some point in our lives, and reject the division between those who 'lift' and those who 'lean'. We all lift and lean at different points in our lives, sometimes simultaneously....

To this end, we ask our elected representatives to reject the following budget measures:

• The removal of income support for six months of the year for young people looking for work (see factsheet here)
• The transfer of 22-24 year olds from the Newstart Payment to the lower Youth Allowance (see factsheet here)
• The indexation of pensions to CPI rather than wages including the Age Pension, Disability Support Pension, Carer Payment, Parenting Payment Single and Veterans Payments (see factsheet here)
• Changes to family payments which will reduce support to low income families including sole parent families (seer factsheet here)
• Increasing the Age Pension age from 67-70 years, in the absence of any increase to Newstart (see factsheet here).

Read the full joint statement at ACOSS.

Speaking for ourselves, as tenants advocates, we can only add our particular concern for what these changes would do to the ability of young people and people in receipt of social security payments to get and stay housed.

For our further thoughts on the Budget and fiscal policy, look under our Federal Budget and Modern Monetary Theory labels.

Negative gearing fail

It was unedifying spectacle all round. Yesterday, after Shadow Treasurer Joe Hockey indicated to media that a Coalition government would conduct a review of tax policy, including the tax treatment of negative gearing, Treasurer Wayne Swan hurried to assure the negative gearers that a Labor government would not touch it:

'We ruled out any change to the existing arrangements in our response to the Henry (tax) report.'

Whereupon the Shadow Treasurer hurried to get the initial media reports retracted and assured the negative gearers that nothing would be changed, at least not in a Coalition government's first term.

While the Treasurer and Shadow Treasurer hasten to do nothing about negative gearing, the public discussion about this wretched bit of policy will proceed. And it has proceeded. Almost three years since we found we had to tell tenants and policy makers that negative gearing was not their friend, we find that more and more people we speak with harbour no illusions about it: it does no good, only bad, to our housing system, to our government finances, and to the fairness of our society.

On the bad it does to our housing system: it distorts the rental sector to the disadvantage of low-income renters in particular, by facilitating speculative purchases of higher value/higher rent properties, shuffling the relatively affordable stock out of rental, and doing next to nothing for new supply. 

On the bad it does to government finances: in 2010-11 (the most recent year for which figures are available), Australia's negatively-geared landlords posted a net loss of $12 billion on their rental properties, which they deducted from their non-rental incomes at tax time. As result, about $4 billion that would otherwise have been collected in tax wasn't.

And so to just one example – in the media today – of the bad that negative gearing policy does to fairness. While it forgoes the billions that it might otherwise have collected in tax from negatively geared landlords, the Federal Government goes about looking for 'savings' in its expenditures – such as on social security payments to people doing it really tough. Earlier this year, the Government withdrew from some 84 000 single parents their entitlement to Parenting Payment, and put them on the significantly lower Newstart allowance instead. The Salvation Army has noticed many of them have had to turn to it for help. The Salvos quote one of them:

'Since I have been put on Newstart, I am unable to afford the rent I signed a contract on, and have had to break my lease and move into a caravan, making my life very hard. I am forced to live substandard.'

This person has been let down not just by an increasingly mean social security system, but by an unaffordable, distorted rental market too.

Social housing landlords grab carbon payments

Last month pensioners and other recipients of social security payments started receiving the Clean Energy Supplement and, as foreshadowed, Housing NSW has started taking a bit of the supplement (25-30 per cent of it) in rent, by including it in the assessment of public housing tenants' rent rebates.

Housing NSW states its rationale:

Ongoing increases in general income support payments to social housing tenants, such as the carbon tax payments paid to people receiving pensions and allowances, are included as assessable income when social housing rents are calculated.

The NSW Government has included these payments in rent calculations in accordance with the normal rent setting practices.

You can see where Housing NSW has gotten it wrong. The Clean Energy Supplement (in Housing NSW's terms, the 'carbon tax payment') is not a 'general income support payment'. It has a specific purpose – to offset the additional costs of the new carbon pricing system ('the carbon tax').

And including this supplement in rent rebate calculations is not 'in accordance with normal rent setting practices'. Normal practice is to not consider these specific purpose supplements. Normal practice is what happens to the pension supplement paid specifically to offset the costs of the GST – it does not get assessed in the calculation of rent rebates. This has been the case for more than a decade.

It's not just Housing NSW making this unjustified grab. We hear community housing landlords are doing it too – except there's no mention of the Clean Energy Supplement as 'assessable income' under the Community Housing Rent Policy.

Community housing tenants concerned that their landlord has assessed their income wrongly should consider asking for the assessment to be reviewed.

  

Parenting Payment to Newstart: National Day of Action for single parents and their kids

Tuesday 5 February is a National Day of Action in support of families affected by the Federal Government's decision to cut single parents' entitlement to Parenting Payment and put them on the unemployment payment, Newstart, instead.

The change will substantially reduce the incomes of about 80 000 households already doing it tough, and push many of them towards homelessness.

Raise your hand in support of single parents and their kids at one of the rallies being organised across Australia: see the Single Parents Action Group for more details.