Reforming Rent Assistance

This paper explores how and whether Commonwealth Rent Assistance is delivering on its aim, which is to alleviate rental stress for people on the lowest incomes. The paper is released in the wake of the 2023 Report on Government Services, which shows that the cost of rent assistance has grown to $4.9 billion per year.

The paper finds that:

  • The payment leaves one in two of its participants in rental stress, because it has not been raised as rents have soared
  • The payment excludes those on the lowest incomes. For example, only one in three people on the JobSeeker payment is eligible for the payment
  • People on lower incomes get less help, with eligibility rates that are more favourable to people on higher payments and incomes
  • Part of the reason the payment was introduced was to reduce Government spending on social housing. However, the Government spends almost four times as much on Commonwealth Rent Assistance payments ($5.3 billion) than on social housing and homelessness services combined ($1.6 billion).

This paper calls for reform of Commonwealth Rent Assistance to ensure people on the lowest incomes can access the payment, and an increase to the payment to stop it from leaving people in rental stress. The payment should then be indexed to rental prices, rather than general inflation, to ensure it does not fall behind the cost of rent again. The paper also points out that the payment is not a solution to rental affordability, but a short- and medium-term measure. To truly address the housing crisis, the Federal Government will need to refocus on ending the shortfall in social housing.