Housing assistance in Australia 2018

Housing costs are a major expense for those on low incomes. Meeting rental costs or mortgage repayments can be a strain on personal finances. Similarly, for those who aspire to home ownership, saving a deposit and accessing finance can be difficult. Governments provide a range of financial support to make it easier for people to access affordable housing. Financial assistance is provided through:

• rent assistance through the Commonwealth Rent Assistance Program (CRA) and through jurisdictional Private Rent Assistance (PRA) programs, and
• assistance with buying a home through Home Purchase Assistance (HPA) programs and the First Home Owners Grant (FHOG).

Renters

Commonwealth Rent Assistance (CRA)

CRA is an Australian Government payment, received by people on low or moderate incomes who are renting in the private housing market, to assist with the cost of housing. CRA is the most common form of housing assistance received by Australian households (see below).

Commonwealth Rent Assistance

CRA is a non-taxable income supplement, payable fortnightly to eligible recipients. To be eligible, tenants must:

• first be in receipt of either an income support payment or more than the base rate of Family Tax Benefit Part A (FTBA), and
• meet the residency requirements of their pension, allowance or benefit.

CRA is paid at 75 cents for every dollar above a minimum rental threshold until a maximum rate (or ceiling) is reached. The minimum threshold and maximum rates vary according to the household or family situation, including the number of children.

Certain social housing tenants are eligible for CRA, such as those living in community housing or Indigenous community housing and, in some jurisdictions, state-owned and managed Indigenous housing (SOMIH). CRA is not generally payable to public rental housing tenants, as state and territory housing authorities already subsidise rent for these tenants.

Payment of CRA continues as long as recipients meet income and asset tests for their primary payment as well as CRA eligibility conditions.

Source: [1].

Between 2012–13 and 2016–17, the Australian Government’s real expenditure on CRA increased by around 13%, from $3.9 billion to $4.4 billion. Over time, expenditure has remained highest in New South Wales, followed by Queensland [2].

At June 2017, around 1.34 million income units received CRA; about 2,600 income units (or less than 1%) fewer than in 2016. The median CRA payment in 2017 was $132 per fortnight, and the median rent was $440 per fortnight (See supplementary table FINANCIAL.1 for details).

In 2017, of the CRA recipients (the reference person):

• Just over one quarter (27%) were aged 60 and over.
• Most were single, with no dependent children (54%), followed by those who were single with one or more dependent children (21%).
• Almost all (86%) were receiving an income support payment – in particular 22% were receiving Newstart Allowance, 20% were receiving the Age Pension, 19% were receiving a Disability Support Pension.
• Five percent identified as Indigenous (71,100 income units – not limited to the reference person).
• Almost 7 in 10 (68%) CRA recipients would have been in rental stress (paying more than 30% of their income on rent) were it not for the CRA received (See supplementary table FINANCIAL.2).

Location

In 2017, New South Wales had the highest number of CRA recipients (424,600), followed by Queensland (345,600) and Victoria (302,800) (See supplementary table FINANCIAL.2).

Notably, Tasmania (36,800) had more than 3 times as many CRA recipients as the Australian Capital Territory (11,100), despite having a population that is only 25% larger than the Australian Capital Territory. This primarily reflects differences in average household incomes with proportionally less demand for CRA in the Australian Capital Territory.

Rental stress

Rental stress is defined as spending more than 30% of gross household income on rent [2]. In 2017, 68% of CRA recipients would have paid more than 30% of their income on rent if CRA was not provided. However, with CRA provided, this proportion was reduced to 42% of CRA recipients in rental stress.

Between 2009 and 2017, the proportion of income units paying more than 30% of their income in rent after receipt of CRA remained steady at around 41%. Among special needs groups, young people aged 24 years and under were the most likely to be paying more than 30% of their income in rent after CRA (58%) (Table 7.1).

Table 7.1: Income units^(a) receiving CRA and paying more than 30 per cent of income on rent (per cent), by special needs group, 2009 to 2017

Year	Aged 24 and under	Aged 75 and over	Indigenous	Disability support pension	Total income units receiving CRA
2009	54.7	30.2	30.2	36.3	40.7
2010	45.3	27.8	31.0	34.4	42.1
2011	57.8	24.8	29.3	31.1	40.1
2012	58.4	24.6	29.9	31.6	40.3
2013	57.8	24.1	30.4	29.7	40.1
2014	57.4	24.4	31.2	30.2	40.3
2015	57.5	25.5	32.8	31.2	41.2
2016	57.6	26.6	33.4	31.7	41.2
2017	58.0	27.7	33.8	32.5	41.6

1. One person or a group of related persons within a household whose command over income is shared, or any person living in a non-private dwelling who is in receipt of personal income.

Notes

1. Includes income units paid CRA under the Social Security Act 1991 or under A New Tax System (Family Assistance) Act 1999 who were entitled to a daily rate of assistance at 30 June 2017. Excludes a small number of income units where income details are incomplete.
2. Includes income units where one member has self-identified as Aboriginal or Torres Strait Islander. Some members of an income unit may also self-identify as South Sea Islander.
3. Includes income units where one member was in recipient of Disability Support Pension at 30 June 2017.
4. Includes income units where one member was 24 years old or younger at 30 June 2017.
5. Includes income units where one member was 75 years old or older at 30 June 2017.

Sources: AIHW analysis of the Australian Government Housing Dataset (for 2014 and earlier results) and SCRGSP (Steering Committee for the Review of Government Service Provision), Report on Government Services, vol. G, Housing and homelessness, Productivity Commission, Canberra (for results after 2014). See supplementary table FINANCIAL.5.

Private Rent Assistance (PRA)

PRA is financial assistance provided directly by all state and territory governments to low-income households experiencing difficulty in securing or maintaining private rental accommodation.

Private rent assistance is usually provided as a one-off form of support and includes bond loans, rental grants, rental subsidies and relief, and payment of relocation expenses. Households may receive more than one type of private rent assistance, hence totals reflect the number of instances PRA was provided. In 2016–17 these forms of private rental assistance were provided to nearly 98,500 households.

In 2016–17, PRA assisted about 128,000 recipients, a decrease of 19% from 158,700 in 2010–11. Of PRA recipients in 2016–17:

• Nearly one third (30%) were aged 25–34, and about one fifth (21%) were younger recipients (aged between 15 and 24).
• Fourteen percent were from an Indigenous household.
• Sixty percent were earning a gross income of less than $700 per week (or around $36,400 p.a.).
• Almost 1 in 5 (19%) reported employee cash income as their primary income source (See supplementary table FINANCIAL.7).

In 2016–17, bond loans were the most common type of PRA, assisting 81,500 recipients, followed by rental grants, subsidies and relief (41,900 recipients).

Location

In 2016–17, South Australia reported the highest number of instances of households receiving PRA, with over 46,500 recipients (36%). This was followed by Queensland (28,400 or 22%) and New South Wales (24,900 or 19%). The Australian Capital Territory and Northern Territory reported the lowest numbers of instances of households receiving PRA, with about 500 recipients (less than 1%) and 450 recipients, respectively (See supplementary table FINANCIAL.8).

In 2016–17, nearly 3 in 5 (61%) instances of households receiving PRA were households in Major cities, with 23% in Inner regional areas, 14% in Outer regional areas and around 1% in both Remote and Very remote areas (See supplementary table FINANCIAL.9).

Home buyers

There are two main types of government housing assistance available to home buyers:

• First Home Owner Grant (FHOG), a scheme funded by the states and territories and administered under their own legislation.
• Home Purchase Assistance (HPA), administered by states and territories.

First home buyers

The national First Home Owner Grant (FHOG) scheme was introduced on 1 July 2000 and is funded by the states and territories and administered under their own legislation. Under the scheme, a one-off grant is payable to low-income first home owners who satisfy eligibility criteria.

The number of dwellings financed by first home buyers has decreased over time, from around 12,600 in January 2009 to 8,400 in January 2018. Similarly, the percentage of all dwellings financed by first home buyers has fallen from 29% in January 2009, to 18% in January 2018 (Table 7.2).

In line with the fall in the number of dwellings financed by first home buyers, the average loan amount has increased over time. In January 2009, the average nominal loan amount was $272,800. This increased to an average loan amount of $327,400 in January 2018 (up 20%).

Table 7.2: First home buyers’ dwelling finance, January 2009 – January 2018^(a)

Year	First home buyers -  dwellings financed (count)	First home buyers - per cent of all dwellings financed	First home buyers - Average loan size ($'000)
2009	12,589	28.5	272.8
2010	8,241	23.1	286.1
2011	5,571	16.5	281.6
2012	8,043	20.6	282.8
2013	6,820	17.2	297.5
2014	7,103	16.4	303.9
2015	6,242	14.5	306.8
2016	5,963	13.7	318.2
2017	6,135	13.4	315.1
2018	8,379	18.0	327.4

1. Table refers to most current data available during report preparation.

Source: ABS (Australian Bureau of Statistics) 2018 [3]. See supplementary table FINANCIAL.14.

Home Purchase Assistance (HPA)

HPA is administered by each jurisdiction and provides a range of financial assistance to eligible households to improve their access to, and maintain, home ownership. HPA may vary from state to state, and some products are not offered by all jurisdictions.

HPA can include:

• Direct lending
• Concessional loans
• Mortgage relief
• Interest rate assistance
• Deposit assistance
• Other assistance grants.

In 2016–17, states and territories provided home purchase assistance to around 41,800 recipients across Australia—a drop from 42,400 recipients in 2010–11 (Table 7.3). Households may receive more than one type of home purchase assistance, hence totals reflect the number of instances HPA was provided. In 2016–17 these forms of home purchase assistance were provided to over 41,300 households.

The number of instances of households receiving HPA in the form of direct lending has been steadily decreasing—from a high of 38,900 in 2013–14 to 36,500 in 2016–17. The number receiving interest rate assistance has generally been increasing over time from 2010–11 through to 2016–17.

Table 7.3: Home purchase assistance provided to households, 2010–11 to 2016–17

Year	Type of assistance Direct lending	Type of assistance Interest rate assistance	Type of assistance Other(a)	Total(b)
2010–11	37,620	3,070	1,753	42,443
2011–12	36,844	3,350	1,892	42,086
2012–13	35,001	3,290	2,022	40,313
2013–14	38,853	3,288	2,038	44,179
2014–15	38,638	3,420	1,975	44,033
2015–16	37,415	3,581	1,763	42,759
2016–17	36,451	3,791	1,602	41,844

1. 'Other' includes mortgage relief, deposit assistance and other assistance.
2. The sum of households assisted by each type of assistance does not equal the unique count of households assisted because households may receive multiple types of assistance.

Note: The data include all households that received transfers of assistance in the financial year through home purchase assistance programs. This includes those households that commenced receiving assistance during the financial year; those households that commenced receiving an ongoing form of assistance in a previous financial year that continued to receive transfer(s) of assistance in the reference year; and those households that had monies outstanding on repayable home purchase assistance provided in a previous period at the commencement of the reference year.

Source: AIHW National Housing Assistance Data Repository. See supplementary table FINANCIAL.10.

Of HPA recipients in 2016–17:

• Almost half (49%) were aged 25–44.
• Over one quarter (26%) were earning a gross income of less than $700 per week (or $36,400 p.a.).
• Only 1% of recipients identified as being Indigenous (See supplementary table FINANCIAL.11).

Location

In 2016–17, the highest number of instances of households receiving HPA was in Western Australia (20,100), followed by South Australia (18,300). The Australian Capital Territory reported the lowest number of instances of households assisted by HPA (45, or less than 1% of all instances) (See supplementary table FINANCIAL.12).

Sixty-eight per cent (28,300) of instances of households receiving HPA were in Major cities in 2016–17, 15% (6,400) were in Outer regional areas and 1 in 8 (14%, or 5,700) were in Inner regional areas. Very few were located in either Remote (3%) or Very remote (less than 1%) areas (See supplementary table FINANCIAL.13).

It should be noted that remoteness estimates are heavily influenced by the scale of Western Australia and South Australia contributions to household counts (See supplementary tables for details).

Indigenous Home Ownership Program

Indigenous Business Australia (IBA) facilitates increasing the levels of home ownership through housing loans to Indigenous Australians who have difficulty qualifying for housing finance [4]. IBA assists Indigenous Australians into home ownership by providing home loans at concessional interest rates which have low deposit requirements and flexible repayment terms.

Since 1975, IBA has assisted almost 18,000 Indigenous families into home ownership. At 30 June 2017, the total number of loans in the portfolio was 4,570, and the average purchase price for homes funded through the program was $350,400 [4].

The overwhelming majority of IBA’s home loan customers (92%) are first home buyers. Many Indigenous people face a range of barriers to owning a home, including lower incomes, lack of a deposit and/or credit history. These factors all affect the credit assessment criteria of mainstream lenders. By owning their own home, Indigenous families can obtain a secure, safe place to live.

References

1. Department of Social Services (DSS) 2018. Housing Support - Commonwealth Rent Assistance. Accessed 23 March 2018.
2. Steering Committee for the Review of Government Service Provision (SCRGSP) 2018. Report on Government Services 2018 – Housing (Part G, Chapter 18). Accessed 22 March 2018.
3. Australian Bureau of Statistics (ABS) 2018. Housing Finance, Australia, January 2018. ABS cat. no. 5609.0. Canberra: ABS.
4. Indigenous Business Australia (IBA). 2017. Annual Report 2016–17. Canberra: IBA.