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‘It’s time to fix rent assistance’: Alarming data sparks call for reform

By Zarah Torrazo
24 January 2023 | 12 minute read
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New data showing nearly one in two recipients of the Commonwealth Rent Assistance (CRA) are still under rental stress has strengthened calls to fix the payment’s underlying issues. 

The Report on Government Services 2023 from the Productivity Commission showed that 43.9 per cent of Australian households receiving the financial supplement were allocating more than 30 per cent of their income to rent. 

According to the Australian Institute of Health and Welfare, households or individuals are considered under rental stress if they are spending more than 30 per cent of their income on rent. 

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The ACT showed the highest proportion of CRA recipients in rental stress at 53.9 per cent, followed by NSW (46.8 per cent), Victoria (44.3 per cent), Queensland (43.4 per cent) and Western Australia (42.8 per cent). 

Other states and territories also showed a significant portion of renters experiencing rental stress despite receiving CRA payments, including the Northern Territory (42.3 per cent), South Australia (35.4 per cent), and Tasmania (32.9 per cent).

Alarmingly, the report also showed a steep decline in the federal government’s spending on CRA — down from a five-year high of around $5.5 billion in 2020–21 to $4.9 billion in 2021–22. 

In light of the new data, the national spokesperson for Everybody’s Home, a national campaign to fix the housing crisis, Maiy Azize, said the payment must be reformed.

“Commonwealth Rent Assistance can be a lifeline for tenants who are struggling to cope with soaring rents,” she remarked. 

With the housing crisis at “fever pitch”, Ms Azize stressed that people need assistance so they are not plunged into homelessness. 

“But these figures show that the payment isn’t enough to lift people out of housing stress,” she said. 

She stressed that the current parameters of the income assistance have not “kept up with rents” — which have surged while the payments lagged behind. 

Separate data from CoreLogic showed that average national rents rose an unprecedented 10.2 per cent throughout 2022, even as the pace of rental growth slowed during the back end of the year.

“It has been decades since there was a real boost to rent assistance. At the moment, the maximum fortnightly payment a single person can receive is $151.60. It’s no wonder that almost one in two people who get the payment are still in rental stress,” she added. 

Currently, Rent Assistance is payable at the rate of 75 cents for every dollar of rent payable above the rent threshold until the maximum rate of payment is reached. 

Rent thresholds and maximum rates vary according to an eligible family situation and the number of children they have.

For singles without children, the maximum rate may be reduced if the accommodation is shared with others. Each year, rent thresholds and maximum rates are indexed in March and September to reflect changes in the consumer price index.

“The people who need the payment the most, including those on JobSeeker or Youth Allowance, are often being left out,” Ms Azize said. 

Ms Azize called on the federal government to take tangible measures to address the issue — namely by increasing the CRA by at least 50 per cent and fixing the payment so that “the people who need help most can get it”. 

“Most importantly, we need a long-term commitment to build social housing. Today’s numbers show that spending on social housing is falling. If they’re going to fix the housing crisis, the federal government is going to have to step up and build the social and affordable rentals that people need,” she concluded.

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