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C63/1997 BUDGET MEASURE: CEASE RENT ASSISTANCE TO CERTAIN SUB-TENANTS IN PUBLIC HOUSING

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DATE OF ISSUE:  15 DECEMBER 1997

BUDGET MEASURE: CEASE RENT ASSISTANCE TO CERTAIN SUB-TENANTS IN PUBLIC HOUSING

Purpose of Instruction

To notify of new provisions to apply to people who sub-let accommodation from a tenant who rents public housing.

BACKGROUND

1997-98 Budget announcement

In the 1997-98 Budget, the Government announced that it would cease payments of rent assistance to people living as sub-tenants in public housing where the primary tenant is paying less than market rent to the State or Territory Housing Authority (SHA).

Rationale

This measure is part of a Government initiative to regulate the assistance available from different Government sources to residents living in public housing.  Tenants of public housing have not been eligible for rent assistance from the Commonwealth because concessional rates of rent are levied by the SHAs, guaranteeing an affordable rate of rent to the tenant.

Sub-tenants are obliged to notify the SHA of their presence so their income can be taken into account in setting the rent to be paid by the primary tenant.

This measure is aimed at encouraging compliance with this obligation and reducing the level of double subsidy for a residence.

Clients affected

The majority of people who are expected to be affected by this measure are families where the children are receiving a social security payment including rent assistance.  The profile of DVA clients differs from that of DSS, and few DVA clients are expected to be affected.

Current rules

The Social Security Act 1991 and the Veterans' Affairs Act 1986 specifically deny rent assistance to tenants who pay rent to the SHA.  The rent they are required to pay is usually less than market rate.

Under most State and Territory public housing regulations, sub-letting of public dwellings is only allowed if authorised by the relevant housing authority.  Where sub-letting has been authorised, the housing authority generally assesses additional rent at subsidised levels, (usually 20-25 per cent of income) for each additional tenant.  Although the total household rent is levied upon the primary tenant, the amount charged for each additional tenant is usually at a low level which would preclude entitlement to rent assistance.

In practice, public housing tenants do not always disclose to the housing authorities the presence of others living with them.  These sub-tenants may then claim rent assistance.  The amount of rent assistance paid by DSS or DVA is dependent only upon the rent paid to the primary tenant, irrespective of the actual rent charged for the public dwelling by the housing authority.

Details of new provisions

Under the new provisions, sub-tenants who live in public housing will remain eligible for rent assistance if their presence has been notified to the SHA and their income has been taken into account in calculating the amount of rent payable by the tenant.

Sub-tenants who have not notified the relevant housing authority of their presence, will not be eligible for rent assistance under the amended legislation.


Legislation

The amending legislation is contained in the Social Security and Veterans' Affairs Legislation Amendment (Family and Other Measures) Bill 1997.  Schedule 19 amended the definition of Government rent by the addition of note 2 at the end of the definition.

'Note 2.  Rent payable by a person for living in premises in respect of which someone else pays Government rent may also be regarded as Government rent (see subsection (4A)).'

Subsection (4A) states that:

'If a person pays or is liable to pay, rent for living in premises in respect of which someone else pays Government rent (other that Government rent paid at or above a rate that the authority receiving the rent has told the Department is a market rate), the rent paid or payable by the person for living in those premises is taken to be Government rent, unless the person shares the premises with the person who pays, or is liable to pay, Government rent in respect of those premises and the person's income has been taken into account in calculating the amount of Government rent payable in respect of those premises.'

Date of effect

The date of effect is 1 January 1998.

IMPLEMENTATION OF MEASURE

Scope of implementation

As noted above, very few DVA clients are expected to be affected by the amendment to the definition of Government rent.

DVA's implementation strategy will be limited to providing advice to clients of their obligations to notify the SHAs of their presence if they wish to obtain rent assistance.

A significant number of DSS clients is expected to be affected.  DSS will conduct extensive data-matching with the SHAs and implement system changes to record and monitor the amendments to the legislation to identify people living in public housing, and to establish their eligibility for rent assistance.  The results will indicate if there is any need to modify our implementation strategy at a later date.


Action to identify affected clients

Identification of DVA clients who lose eligibility for rent assistance under the new legislation will rely on self-disclosure.  To assist this process, advice about eligibility and obligations will be provided in a number of ways:

  • forms relating to rent details;
  • 'You and Your Pension' booklet for issue in 1998;
  • June advice letters.

Advice to clients

Where State Office staff know that a person is a sub-tenant in a public housing authority dwelling, the person should be advised that they are only eligible for rent assistance if the SHA has been advised that they are living in the dwelling, and if the tenant is paying additional rent in respect of the sub-tenant.  A statement from the tenant that the SHA has been notified, and that additional rent is being paid to the SHA, is sufficient.  .

Action to cease rent assistance

DVA will not be data-matching rent assistance recipients at this stage, so we will not be able to use this method to verify a claim by a person that they are not living in a SHA dwelling.  Therefore, action to cease rent assistance should only be taken if a client does not provide evidence from the SHA, and the examining officer is certain that the dwelling the client lives in is a SHA dwelling.

Contact officer

The contact for this measure is Annette Smith (02) 6289 6776.

R J HAY

A/G BRANCH HEAD

INCOME SUPPORT

     December 1997