Rental costs hit the wall: over half a million in ‘housing stress’

“Far too many people are struggling to meet the costs of putting a roof over their head. One-in-8 people eligible for Rent Assistance, over 171,000 people are paying more than half of their income in rent,” said Kate Beaumont, President of the National Welfare Rights Network today.

“The Commonwealth’s $4 billion annual Rent Assistance program is not helping all those who need it. Two-in-five are in ‘housing stress’, with 523,000 households paying in excess of 30 per cent of their income in rent.

“Design problems with Rent Assistance, combined with inadequate levels of Allowance payments for unemployed people and students are exacerbating extreme levels of housing stress.

“Rent Assistance fails to keep up with rental costs. The consequences for individuals are dire: after rent, there is next to nothing left over for food, utilities or to look for work.

“The latest Anglicare Australia Rental Affordability Snapshot paints a disturbing picture. Just 1 per cent of the 65,000 properties surveyed were suitable from an affordability perspective for single people receiving income support payments.

“It’s time for the Minister for Social Services to label the housing crisis for what it is: a national emergency, and take steps to start solving the problem.

“Improvements to the Commonwealth Rent Assistance program must be part of the solution. Rent Assistance helps to improve the affordability of housing; however, it does not prevent everyone from experiencing housing stress.

“There is a strong link between housing unaffordability in the private rental market and low rates of income support payments. Unemployed people on the Newstart Allowance are twice as likely to be in housing stress compared to Age Pensioners, while 68 per cent of those on Youth Allowance – the lowest of all social security payments – are in ‘housing stress’.

“A quarter of those on Newstart and Youth Allowance pay in excess of half of their weekly income to keep a roof over their head. Students on the $30-a-day Youth Allowance experience the greatest affordability problems with 38 per cent forking out more than half of their weekly income just to keep a roof over their head.

“The maximum amount of Rent Assistance for a single adult on Newstart living alone is $60.20 a week, if their weekly rent is more than $129. With basic single rate of the Newstart Allowance at just $259.60 a week, people looking for work must survive on just $324.80 a week.

“Many single renters who share accommodation are hit by unfair ‘sharers’ Rent Assistance rules which reduce the rate of Rent Assistance paid by a third, or $21.40 a week. Over 190,000 people are now subject to these arrangements.

“Rent Assistance plays a critical role in assisting low income and disadvantaged tenants with high housing costs. However, Rent Assistance, as it is currently configured, fails to take account of geographical differences in rental costs.

“Commonwealth Rent Assistance would also be more effective if it were indexed to rental increases, instead of movements in the Consumer Price Index.

“NWRN has recommended three measures for the Government to consider in the coming May Federal Budget to improve housing affordability for low income and disadvantaged renters.

“We have urged the Government to improve housing and rental affordability by:

  • increasing the maximum rate of Rent Assistance by 30%, or around $22 a week,
  • indexing Rent Assistance to movements in national rents, and
  • to repeal the ‘sharers’ Rent Assistance rules.

“The final report to Government from Patrick McClure on our social security system acknowledges community concerns over the unsustainably low rate of the single Newstart Allowance. Until there is a substantial increase to payments for unemployed people, the severe rental affordability problems will continue,” concluded Ms Beaumont.

For comment:

  • Kate Beaumont, President, National Welfare Rights Network on: 0414 792 923 or
  • Gerard Thomas, National Welfare Rights Network, Policy and Media Officer: 0425 296 882.

Want to find out more about Rent Assistance? For tables of comprehensive information about Rent Assistance by payment type, location, aged, Indigenous status, and the numbers in ‘housing stress’ and ‘extreme’ housing stress’.

Go to: Senate Community Affairs Committee, Social Services Portfolio, 2014-15 Supplementary Estimates Hearings, Question No: 487.