Financial assistance

Quick facts

  • At 29 June 2018, around 1.31 million income units (individuals or group of related persons) received Commonwealth Rent Assistance (CRA), with a median fortnightly payment of $135.
    • Four in 10 (40%) were considered to be in rental stress at 29 June 2018.
    • If not for CRA, almost 7 in 10 (68%) would have been considered to be in rental stress.
  • In 2017–18, 114,600 households received Private Rent Assistance (PRA) from state and territory governments.

Financial assistance is part of the broader provision of housing assistance in Australia. Governments provide various forms of financial support to assist people on lower incomes to meet housing costs, whether it is rental costs, mortgage repayments, saving a deposit for a home purchase or accessing finance. These housing costs are often a major expense for lower income earners and, therefore, financial assistance can be seen as an important safety net.

This report primarily focuses on the following 3 types of financial assistance:

  • assistance with rental costs through the:
    • Commonwealth Rent Assistance (CRA) program and
    • Private Rent Assistance (PRA) programs (states/territories), and
  • assistance with buying a home through Home Purchase Assistance (HPA) programs.

Commonwealth Rent Assistance (CRA)

CRA is an Australian Government payment to families and individuals who pay or are liable to pay private rent or community housing rent, over specified thresholds and are in receipt of:

  • a social security or veterans’ income support payment; and/or
  • receive Family Tax Benefit Part A at greater than the base rate.

CRA eligibility is based on eligibility for the primary payment and it forms part of the rate of payment. CRA is the most common form of housing assistance received by Australian households.

At the end of June 2018, around 1.31 million income units were receiving CRA; about 32,200 income units (or 2%) fewer than in 2017. The median CRA payment was $135 per fortnight, equating to 30% of median fortnightly rent ($450 per fortnight) (Supplementary table FINANCIAL.1).

Commonwealth Rent Assistance

CRA is a non-taxable payment, generally paid fortnightly to eligible recipients as part of a recipient’s primary payment rate. To be eligible, families or individuals paying private rent must:

  • be in receipt of a social security or veterans’ income support payment and/or more than the base rate of Family Tax Benefit Part A, and
  • pay or be liable to pay more than the specified rent thresholds.

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 states and territories, state owned and managed Indigenous housing (SOMIH). CRA is not generally payable to public housing tenants as state and territory housing authorities already subsidise rent for these tenants.

Payment of CRA continues as long as recipients meet qualification and payability criteria for their primary payments, as well as CRA eligibility conditions.

Source: DSS 2019.

At 29 June 2018, key characteristics of the income units receiving CRA include:

  • Most were single with no dependent children (54%), followed by those who were single with one or more dependent children (21%).
  • Most were aged 40 and over (60%), including 29% who were aged 60 and over.
  • Around 1 in 5 received Newstart Allowance (21%), the Age Pension (21%) or a Disability Support Pension (20%) as their primary pension, allowance or benefit.
  • Almost 6% identified as Indigenous (73,000 income units, not limited to the reference person) (Supplementary table FINANCIAL.2).

Between 2013–14 and 2017–18, the Australian Government’s real expenditure on CRA increased by around 7%, from $4.1 billion to $4.4 billion (SCRGSP 2019). Over time, expenditure has remained highest in New South Wales, followed by Queensland.

Location

In 2018, New South Wales had the highest number of CRA recipients (411,100 income units), followed by Queensland (337,600) and Victoria (292,200) (Supplementary table FINANCIAL.2). Tasmania (36,200) had more than 3 times as many income units receiving CRA as the Australian Capital Territory (10,700).

Rental stress

Rental stress can be defined as spending more than 30% of gross household income on rent (SCRGSP 2019). At 29 June 2018, 68% of CRA recipients would have paid more than 30% of their income on rent if CRA was not provided (Supplementary table FINANCIAL.4). However, with CRA provided, this proportion was reduced to 40% of CRA recipients in rental stress (Table FINANCIAL.1). The proportion of income units paying more than 30% of their income in rent after receipt of CRA between 2009 and 2018 has remained steady at 40–42% (Supplementary table FINANCIAL.5).

In 2018, young people aged 24 years and under (57%) were the most likely of the special needs groups to be paying more than 30% of their income in rent after CRA (Table FINANCIAL.1, Supplementary table FINANCIAL.4). Without CRA, a much higher proportion (79%) of these young people would have been in rental stress. For those income units including at least one Indigenous member, 1 in 3 (33%) were in rental stress with CRA. Without CRA, almost 2 in 3 (65%) would have been in rental stress.

Table FINANCIAL.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 2018

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

58.0

28.0

31.1

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

2018

57.4

27.4

32.6

30.6

40.3

(a) 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 end June. Excludes a small number of income units where income details are incomplete.
2. Includes income units where at least 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 at least one member was in receipt of Disability Support Pension at end June.
4. Includes income units where one member was 24 years old or younger at end June.
5. Includes income units where one member was 75 years old or older at end June.

Sources: AIHW analysis of the Australian Government Housing Dataset and SCRGSP (Steering Committee for the Review of Government Service Provision), Report on Government Services, vol. G, Housing and homelessness, Productivity Commission, Canberra. 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.

In 2017–18, PRA was provided to just under 88,300 unique households (Supplementary table FINANCIAL.7); fewer unique households than in 2016–17 (98,400 households) (HAA 2018 Supplementary table FINANCIAl.7). Households may receive more than one type of PRA and they may also receive multiple assistance payments for each type of PRA. There were around 115,300 total instances of PRA payments (Supplementary table FINANCIAL.S1), with just over 114,600 households receiving the various types of PRA (Supplementary table FINANCIAL.6). Bond loans (71,200 households) were the most common type of PRA in 2017–18, followed by rental grants, subsidies and relief (38,500 households).

Of the 114,600 households provided with PRA in 2017–18:

  • The majority (74%) were provided to households with the main applicant under 44 years of age; 30% were aged 25–34 years.
  • 15% were provided to Indigenous households (Supplementary table FINANCIAL.7).

Location

Of the 114,600 instances of PRA provided to households, almost 40,300 (35%) were located in South Australia. This was followed by Queensland (25,500 or 22%) and New South Wales (24,300 or 21%). The Australian Capital Territory and Northern Territory reported the lowest numbers of instances of PRA provided to households, with about 500 instances (less than 1%) and 400 instances (less than 1%), respectively (Supplementary table FINANCIAL.8).

In 2017–18, 3 in 5 (61%) instances of PRA provided to households were to households located in Major cities, with 24% in Inner regional areas, 13% in Outer regional areas and around 1% or less in both Remote and Very remote areas (Supplementary table FINANCIAL.9).

First home buyers

Financial assistance is also provided to support those on low incomes purchasing a home in the private housing market. The national First Home Owner Grant (FHOG) 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 7,200 in January 2019. Similarly, the percentage of all dwellings financed by first home buyers has fallen from 29% in January 2009 to 18% in January 2019 (Supplementary table FINANCIAL.14).

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 $334,800 in January 2019 (up 23%) (ABS 2019).

Another measure to help reduce the pressure on housing affordability is the First home super saver scheme. Introduced in the 2017–18 Federal Budget, it enables eligible people to save money for a first home using their superannuation fund arrangements (ATO 2019).

Home Purchase Assistance (HPA)

HPA is a form of government financial assistance administered by each state and territory. It 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 states and territories.

Home Purchase Assistance can include:

  • direct lending
  • concessional loans
  • mortgage relief
  • interest rate assistance
  • deposit assistance
  • other assistance grants.

In 2017–18, states and territories provided HPA to almost 41,900 unique households across Australia (Supplementary table FINANCIAL.11). There were around 42,400 households provided with HPA, illustrating that households may be provided with more than one type of HPA. The total number of households provided with HPA has fluctuated since 2010–11 (Table FINANCIAL.10). The most common form of HPA was direct lending, with almost 37,000 households receiving this in 2017–18. This has been fairly steady over the last 8 years. There were fewer households provided with interest rate assistance, but the number has been steadily increasing; from 3,100 in 2010–11 to 3,900 in 2017–18.

Table FINANCIAL.2: Home purchase assistance provided to households, 2010–11 to 2017–18

Type of assistance        
Year Direct lending Interest rate 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

2017–18

36,986

3,944

1,502

42,432

(a) ‘Other’ includes mortgage relief, deposit assistance and other assistance.

(b) The total refers to the sum of the households receiving each type of assistance and does not equal the number of unique 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. Supplementary table FINANCIAL.10.

Of the 42,400 instances of HPA provided to households in 2017–18:

  • Almost half (49%) were provided to households with the main applicant aged 25–44 with a further 21% aged 45–54.
  • Less than 2% were provided to Indigenous households.
  • One-quarter (26%) were provided to households earning a gross income of less than $700 per week (or $36,400 per annum) (Supplementary table FINANCIAL.11).

Location

In 2017–18, the highest number of instances of HPA provided to households was in Western Australia (20,700), followed by South Australia (18,600). Together, Western Australia and South Australia accounted for 93% of HPA provision in Australia. The Australian Capital Territory reported the lowest number of instances of HPA provision (less than 1% of all instances) (Supplementary table FINANCIAL.12).

Over this period, the majority of instances of HPA provided to households were in Major cities (71%, or 30,200), followed by households in Outer regional areas (14%, or 5,900) and Inner regional areas (12%, or 5,000). There were very few instances of HPA provided to households located in either Remote (2%, or 1,000) or Very remote areas (less than 1%, or 300) (Supplementary table FINANCIAL.13).

Indigenous Home Ownership Program

Indigenous Business Australia’s (IBA) Housing Solutions program supports Indigenous Australians into home ownership by providing housing loans to those who have difficulty qualifying for housing finance (IBA 2018). IBA provides home loans to Indigenous Australians at concessional interest rates, which have low deposit requirements and flexible repayment terms.

Since 1975, IBA has assisted around 18,500 Indigenous families into home ownership (IBA 2018). In 2017–18, IBA assisted over 900 Indigenous families with home ownership. The overwhelming majority of these home loan customers (95%) were first home buyers and low income earners (96%). The program supported 7% of customers to transition to a mainstream lender.

This long-standing program supports self-management and economic self-sufficiency for these Indigenous Australians. Not only can the program assist Indigenous families attain a secure and stable place to live, but it can also potentially build intergenerational wealth.

Glossary

References

  1. DSS (Department of Social Services) 2019. Housing Support–Commonwealth Rent Assistance. Canberra: DSS. Viewed 4 April 2019, https://www.dss.gov.au/housing-support/programmes-services/commonwealth-rent-assistance.
  2. SCRGSP (Steering Committee for the Review of Government Service Provision) 2019. Report on Government Services 2018–Housing (Part G, Chapter 18). Viewed 4 April 2019, https://www.pc.gov.au/research/ongoing/report-on-government-services/2019/housing-and-homelessness/housing_link.
  3. Australian Taxation Office 2019. First home super saver scheme. Canberra: ATO. Viewed 3 June 2019, https://www.ato.gov.au/individuals/super/withdrawing-and-using-your-super/first-home-super-saver-scheme/#Eligibilityforthescheme1
  4. IBA (Indigenous Business Australia) 2018. Annual report 2017–18. Canberra: IBA.