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Commonwealth Rent Assistance: modelling of current effectiveness
Hazel Blunden
National Shelter, ACOSS
Contact Email: hazel
shelternsw.org.au
The purpose of this paper is to explore the effectiveness or ineffectiveness of the current Rent Assistance program in providing housing affordability to people in receipt of pensions and allowances. Also, we question claims that Rent Assistance is a superior form of housing
assistance to spatially fixed public housing because it allows people to "move to where the jobs are".
Rising housing costs are making Rent Assistance less effective in a range of areas, especially in the capital cities. Rent Assistance is only effective in rural and some urban fringe areas, where housing costs are low but the unemployment rate is high.
We use a number of measures to examine whether or not Rent Assistance provides affordability ('affordability' being defined in various ways). We also model the cost of changing the upper rent cap.
The paper examines what proportion of income would have to be spent on rent and how much disposable income is left over, using current median rent data and current Centrelink payment rates. We use a variety of affordability measures - the FaCS 25% measurement, the FaCS 30% measurement, and the 30% of total income housing stress benchmark measurement. These measurements are applied to different types of households living in different areas.
We provide some costing indicating the magnitude of the shortfall (the amount that would have to be spent on paying more Rent Assistance if the upper rent cap was pegged to the equivalent of Sydney Statistical Division median rents).
The major findings of the paper are that:
* Rent Assistance is of little use in providing affordability, especially in the capital cities
* An increase in spending of more than $450m per annum is necessary to protect recipients of Rent Assistance from further declines in affordability.
Paper
Download Information (if available):
Paper65.pdf
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Copyright © 2003 Social Policy Research Centre.
