Purpose and Objective

The purpose of this document is to explain the policy for Rent Management. This includes social housing, affordable housing, and transitional housing.

Scope

• This policy applies to all clients (including applicants, former tenants and existing tenants) who accept accommodation in properties owned or managed by Housing Plus
• This policy applies to all Housing Plus properties except Crisis Housing.
• This policy describes the organization’s objectives and policies regarding Rent Managment.

References

Housing Plus will start a tenancy in accordance with:

1. The Housing Act 2001
2. Residential Tenancies Act 2010 and Regulations
3. Housing Plus Policies.

Both the client and Housing Plus have rights and obligations under the above Acts, the residential tenancy agreement and this policy.

Definitions

Term: Tenancy Agreement

Definition: The Residential Tenancies Act 2010(NSW) (the RT Act 2010) defines a residential tenancy agreement as ‘an agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence’ (section 13(1)).

Term: Market Rent

Definition:Market rent is the amount of rent that a real estate agent or landlord would charge each week if the property were rented in the private market.

Term: Rent Subsidy

Definition: A rent subsidy is the difference between the market rent and the rent a tenant pays based on their household’s assessable income and rent assessment rules.

Responsibilities

Executive

1. Establish policy objectives

Management

1. Develops policies and procedures to achieve policy objectives
2. Coordinates and implements policy for Rent Management
3. Oversees training and ensures adoption by all employees responsible for Rent Management
4. Reviews policy and procedure on biannual basis to ensure compliance with legislation and adopts accordingly

Employee responsibilities

1. Understand and comply with Housing Plus policies regarding Rent Management.

Charging Rent

Housing Plus is committed to providing social housing in compliance with HOUSING PLUS guidelines, NSW Community Housing Rent Guidelines, and with the provisions of the Rental Tenancies Act 2010 which ensures tenants rents are assessed accurately and fairly.

Housing Plus requires all tenants living in a property owned or managed by Housing Plus to pay rent on regular basis. Housing Plus charges market rent for all its Social Housing properties. This is the maximum rent a tenant can be charged. Housing Plus may only vary the market rent in accordance with the Residential Tenancies Act 2010.

Calculating Market Rent

Housing Plus bases the market rent for a social housing property on the rent a tenant is likely to pay for a property in the private rental market that:

• is in a similar geographical location, and 
• is a similar size, and 
• has similar features.

Housing Plus determines market rent using a number of sources, including property valuations, rental bonds and current trends in the private rental market.

Housing Plus does not value every property, instead it values a carefully chosen subset of properties. Housing Plus uses these values, (also known as benchmark assessments), to calculate the market rent for all other properties. It does this by comparing the characteristics of each property, such as suburb, property type, age, number of bedrooms, yard, cladding and type of parking space to a benchmark property.

Housing Plus also groups suburbs into a smaller number of benchmark localities, or markets, to ensure that rent variances within a suburb are minimised. However, different properties in the same area may have different rents. This is because the type of property and the features of the property may vary.

Calculating Subsidised Rent

Housing Plus calculates subsidised rent according to the tenants household size, type and gross assessable income. There are a number of household income limits and rent assessment rules that determine how much rent a tenant will pay. If a household is eligible for a rent subsidy, the tenant will pay between 25-30% of their household income as rent.

The minimum amount of rent a tenant or a household member will pay is $5 per week. This will only occur where a tenant or household member:

• is not eligible for Centrelink benefits, for example, because they are in custody, or
• enters a nursing home, rehabilitation centre, respite care, refuge (or other safe place) and is required to pay for that accommodation.

Tenants must substantiate all claims for the minimum $5 rent.

The $5 minimum rent will not apply in the situations outlined in the No statutory income or reduced statutory income section below.’

Eligibility for $5 Minimum Rent

In some situations, Housing Plus will assess a tenant or household member’s contribution to the rent payable as $5 per week. These situations are set out in Table 1 below. The tenant must provide documentation to substantiate all claims for the minimum rent charge.

A $5 minimum rent is not applied:

• To the Estate of a deceased tenant who was the sole occupant of the property
• Where the tenant or a household member is on holiday, overseas, or away from their property for an acceptable absence.

Assessing income and assets to calculate subsidised rent

Housing Plus has decided what types of income and assets to include and exclude when calculating a tenant’s eligibility for a rent subsidy and the amount of rent they will pay. The income Housing Plus uses is the gross assessable income of the household.

When applying for a rent subsidy a tenant must complete a Rent Subsidy Application form and provide proof of all assessable income received by all household members aged 18 years and over. Proof of income can be lodged by original documentation, electronically, such as fax or email or can be requested through the Income Confirmation Scheme for Centrelink income. If the documents are provided electronically, Housing Plus may still request the original.

Assessable income and assets

Assessable incomes are incomes that Housing Plus includes when calculating a tenant’s eligibility for a rent subsidy and the amount of rent they will pay. Income that Housing Plus usually considers as assessable includes payments received for general living expenses, for example:

• most pensions, benefits and allowances paid by Centrelink and the Department of Veterans’ Affairs. These income types are also known as statutory income.
• wages, salaries and some work allowances such as overtime, bonuses, shift allowances and penalty rates. These income types are also known as nonstatutory income.
• other income such as superannuation, compensation, overseas pension, interest from savings and maintenance. These income types are also known as nonstatutory

For further information about Assessable Income types please see table 2 below.

Income payable calculations

Housing Plus requires all clients to make a full and complete disclosure of their income from all sources when requested to do so, and the income so disclosed will be the basis for the assessment of rent in accordance with the guidelines.

Rent charged to each client will be reviewed and reassessed from the date of that review by Housing Plus, generally at intervals of six months or as otherwise determined in accordance with this policy. If any client notwithstanding notice fails to lodge the documents required for any such rent review, market rent may be charged until a satisfactory review has been conducted or the tenancy has been terminated.

In cases where a clients income fluctuates, for example through part-time employment, and where it is not considered economic for Housing Plus to carry out frequent rent assessments, rent will be calculated on the average of the weekly gross income of that client over the period of up to twelve weeks prior to the review.

Assessment Rate	Tennant/Other Household Member
25%	The tenant, their spouse or live-in partner, irrespective of their age. All other persons living in the household who are aged 21 years or over.
25%	The tenant, their spouse or live-in partner, irrespective of their age. All other persons living in the household who are aged 21 years or over.
15%	People living in the household aged 18-20 years inclusive who are not the tenants, their spouse or live-in partner.
15%	Family Tax Benefit Part A & B
Nil	Persons living in the household aged under 18 years who are not the tenant, their spouse or live-in partner are not assessed for rent-setting purposes.

Non-assessable income and assets

Non-assessable incomes and assets are incomes and assets that Housing Plus does not include when calculating a tenant’s eligibility for a rent subsidy and the amount of rent they will pay. Income that Housing Plus usually considers as non-assessable includes payments received for a specific purpose, such as allowances received to assist with a particular life circumstance or disability.

For more information, go to see Table 6 below

How Housing Plus assesses certain types of income, reduced income, or no income

The section below outlines how Housing Plus assesses certain types of income, reduced statutory income, or no income at all.

Assessing income for self-employed clients

Housing Plus calculates the income for self-employed clients by taking the gross income less legitimate business expenses. Housing Plus classes legitimate business expenses as any expense essential for producing an income. Some items may be allowable as tax deductions but Housing Plus may not consider them legitimate business expenses. For more information on legitimate business expenses go to Table 11 Below

Assessing income from wages

Where a person has just started a regular job, or has been in continued employment and will be receiving the same gross amount of income each week, Housing Plus will assess the subsidy on this gross amount.

Assessing irregular wages

Where a person will receive a varying income such as income received through casual work, Housing Plus will discuss with the tenant how best to predict that person’s future weekly income. Housing Plus may do this in one of two ways:

1. averaging the income according to the amount of time the person has worked within a 12 week period, or
2. using the actual amount received in the first pay and reassessing the rent subsidy in two months time. If a tenant wishes to use this assessment method they will have to resubmit a second rent subsidy request and evidence of actual income received so that Housing Plus can conduct the re-assessment. If this method is used, and the estimated income is lower than the actual amount of income received Housing Plus will adjust the subsidy and the tenant will need to make up the difference in rent payable.

Assessing Commonwealth Rent Assistance

Housing Plus tenants and other household members may be eligible to receive Commonwealth Rent Assistance (CRA). In these circumstances Housing Plus:

• impute the CRA entitlements for households so as to maximise the CRA received by those households, and
• assess the CRA at 100% for all household members treated as paying rent, and  add each household member’s CRA to the rent for the household.

As no household can be charged more than market rent, Housing Plus may adjust the amount of CRA assessed for particular household members so that the rent for the household is no more than market rent.

Assessing income where a tenant or a household member receives an amount that is less than a statutory rate

Housing Plus will assess people who receive an income that is less than the Newstart Allowance (or other benefit to which they would otherwise be entitled), as though they receive the appropriate statutory benefit for their age and household composition. This includes people who receive wages, salaries, or who are self-employed.

Assessing income where a tenant or household member does not receive a statutory income, or receives a reduced statutory income

In some instances a tenant or household member receives no statutory income or a reduced statutory income because they:

• have chosen not to apply for an income to which they are entitled
• have breached Centrelink requirements or are repaying a Centrelink debt
• are New Zealand citizens who are in Australia on a non-protected Special Category Visa
• are not eligible to receive a statutory income because:
  • they have gone overseas
  • they receive a Newstart Allowance, have not sought work and have become ineligible for further payments for a specified period
  • they have received a compensation or other lump sum payment, or Centrelink deems them to have sufficient resources and Centrelink expects them to use those resources for living expenses

In these situations Housing Plus will assume that a tenant or household member receives a statutory income and will base the rent calculation on the statutory payment to which that person would otherwise be entitled.

Reviewing the rent a tenant has to pay Market rent

Housing Plus regularly reviews the market rent it charges for its properties in line with movements in the private rental market.

Subsidised rent

There are three types of subsidised rent reviews:

1. a scheduled group subsidy review initiated by Housing Plus
2. an automatic group subsidy update initiated by Housing Plus
3. an individual review initiated by the tenant

Housing Plus initiated scheduled group subsidy review

A Housing Plus initiated scheduled group subsidy review occurs when Housing Plus decides to review the income details of a group of tenants receiving a rent subsidy and their entitlement to receive this subsidy. This review involves contacting the tenant and asking them to provide up to date income information for their household.

Housing Plus will send a letter asking the tenant to confirm their current household income.

If the tenant does not return the form by the due date and they fail to make contact Housing Plus will charge the tenant market rent until they return the form. Upon returning the form if the tenant provides information establishing their need for a rent subsidy and a reason as to why they have delayed returning the form Housing Plus will backdate the subsidy to the effective date of the group review. The subsidy will be backdated to the date of change where it is considered reasonable for the tenant to have advised Housing Plus of the change in circumstances.

Housing Plus initiated automatic group subsidy update

An automatic group update occurs when Housing Plus automatically re-assesses rent subsidies by:

• updating Centrelink incomes by applying regular cost of living increases; and or
• carrying forward non-statutory incomes from the previous subsidy without changing the income amounts; and or
• obtaining updated income details from Centrelink for some or all tenants participating in the Income Confirmation Scheme.

Tenant initiated individual subsidy review

An individual subsidy review occurs when a tenant advises Housing Plus of a change to their income or household complement. In this case, Housing Plus will reassess the subsidy based on the income information provided to ensure the household is still entitled to the subsidy and is paying the correct rent.

Advising tenants of changes to rent

Housing Plus will advise all tenants in writing of any change to their market or subsidised rent and when that change takes effect.

Where a tenant pays the market rent and Housing Plus increases the rent following a review Housing Plus gives the tenant 60 days notice of the rent increase in accordance with the Residential Tenancies Act 2010.

Where a tenant pays subsidised rent Housing Plus will list all the income amounts and assessment rates used when calculating the rent payable for the household.

Payment of rent

Housing Plus expects tenants to arrange for prompt payment of rent on or before the due date.

Tenants must notify Housing Plus immediately if they are unable to make payments. Where tenants have difficulty paying their rent Housing Plus will work with and support that tenant towards resolving their difficulty.

Bond Payment

At the commencement of tenancy, Housing Plus requires each client to pay a rental bond equivalent to four weeks of the market rent. Rental Bonds are lodged with NSW Fair Trading and dealt with in accordance with the relevant legislation applying to it. In any case where a client is unable to make payment in full of the rental bond at the commencement of the tenancy, Housing Plus may agree to the rental bond being paid over a maximum period of fifty (50) weeks.

Failure to pay Bond

Failure to pay bond in accordance with a signed bond payment agreement will be a breach of tenancy and action will be taken accordingly.

Transferring Bonds

Where a tenant is relocating from one property to another within the organisation, the bond may be transferred to the new property by completing a new lodgement form and a transfer of bond form, subject to:

• There being no outstanding rent or non-rent accounts associated with the initial tenancy
• There not being a change of head tenant for the second tenancy
• The client has not received rental assistance from Housing NSW

Rent Payment at Commencement of Lease

The first two weeks of the tenancy are to be charged at the calculated rent minus the Commonwealth Rent Assistance (CRA) component.

No tenancies will be allowed to commence unless the client has paid the first two weeks rent.

Subsidised Rent

If a household has a low or moderate income the tenant can apply for a rent subsidy. The rent subsidy will reduce the amount of money the tenant has to pay in rent. Housing Plus has the authority to grant a rent subsidy under the provisions of the Housing Act 2001.

Subsidised rent is based upon 25% household’s assessable income, plus 100% of the household’s entitlement to Commonwealth Rent Assistance (CRA). This is subject to the qualification that the subsidised rent must not exceed market rent. Housing Plus does not pay the rent subsidy to the tenant, but deducts it straight from the market rent.

Proof of Income

To determine the eligibility of a tenant for a rent subsidy, community housing providers must require proof of income for the tenant, their spouse/live in partner (even if they are under 18 years of age) and other household members aged 18 years or over. Proof of income must be original or provided through the Income Certification Scheme for Centrelink pensions and allowances and includes:

• Income statement from Centrelink
• income statement from the Department of Veteran’s Affairs
• payslip, letter or statement from the employer dealing gross wage, applicable tax, deductions, pay period, and payee details for salary or wages
• profit and loss statement completed by an accountant or taxation return for self employed clients
• letter or statement from an Overseas Government detailing the amount received  letter or statement from investment organisation about savings/investments etc. providing details of the amount or dividend received
• letter from another organisation or income provider (not listed above) detailing the amount and type of income received.

In addition:

• All stated income must be verified by the income supplier.
• Additional proof of income may be required by Housing Plus where there is a difference to a household’s standard income, for example, a household not receiving the standard Centrelink income.
• The onus is on the tenant to provide verification of their income within a reasonable period to substantiate a decrease in their income.
• Any changes to a household income must be reported to Homes North within 21 days.

No income

Where a household member who is older than 18 years is not in receipt of any income, Housing Plus will, for the purposes of the rental assessment, assume that the household member is in receipt of the standard Centrelink rate of pension or benefit in accordance with the Housing Plus Rent Charging Policy. Housing Plus has the right to reject an application for rental subsidy if the tenant or household member does not have income continually for a period of 12 months.

Rental subsidy fraud

Rent subsidy non–disclosure occurs when a tenant makes a false, incomplete or misleading statement about the income or assets of any member of their household in order to obtain a rent subsidy that they are not entitled to. Tenants must tell Housing Plus within 21 days of any changes to their household circumstances. For further information about Rent Subsidy Fraud, please see the Rent Subsidy non-disclosure policy.

Rent Reviews

Housing Plus regularly reviews the level of rent paid by a tenant to:

• determine, if a rent subsidy is applied, whether the tenant remains eligible for a subsidy (at least every 6 months)
• recalculate the level of rent paid in accordance with the requirements set out in Appendices 2, 3 and 4 (at least every 6 months for subsidised rent and annually for market rent). It is the tenant’s responsibility to advise their community housing provider of any change in their income and/or family circumstances within 21 days of the effect of that change. Community housing providers must immediately reassess the rent level for a tenant following notification that the household income has changed.

Rent Payment

Methods of rent and non-rent payment are via:

1. At any branch of the Westpac Bank using the special deposit book provided to the client at the time of sign up.
2. By transfer from the client’s bank account to the Housing Plus bank account
3. By Centrelink deduction
4. In special circumstances by cash payment at the branch office

Income and Rent Tables

Link to DCJ website for details on assessable and non assessable income and assets tables

Rent Management Policy_PDF

Updated – November 2018