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Policy

Housing Tasmania Rent Setting

SDMS ID Number

P2102/0179-049

SDMS Title

Housing Tasmania Rent Setting Policy P2102/0179-049

Effective From

18 October 2013

Applies to

All Housing Tasmania tenants

Custodian

Manager Housing Strategy

Summary

This policy outlines how Housing Tasmania manages tenancies in relation to setting the tenant contribution that tenants pay for their Housing Tasmania home.

Replaces Doc. No.

n/a

Author Area

Housing Strategy Social and Affordable Housing Policy Unit

Contact

Manager, Housing Operations

Review Date

31 January 2014

Policy Intent

This policy explains how Housing Tasmania sets the rent for its properties. The rent is set at an affordable rate for each household. This is done by using household and income details.

Application

Housing Tasmania charges affordable rents for its properties.

Market rent is the maximum that a household can pay. It is the price that would be charged in the private market. Most households do not pay full market rent.

Housing Tasmania subsidises the rent for low income households.

The amount that tenants pay is called the tenant contribution. The tenant contribution is based on household and income details. It changes when the household or income details change.

Housing Tasmania does this so that the rent is affordable.

Tenants can choose to pay weekly or fortnightly. The tenant contribution must be paid in advance. The Rent Account Management Policy talks about rent payment and arrears.

This policy affects only rent setting for Housing Tasmanias general housing, Aboriginal housing and Direct Tenancy programs. It is not used for Community Tenancies or other programs.

Market Rent

No tenant will pay more than the market rent of their property.

When Housing Tasmania talks about market rent it means the rent that is talked about in the Residential Tenancy Act 1997. Housing Tasmania has to follow the rules in the Act if it wants to change the market rent.

Market rent is not set by Housing Tasmania. It is set by the Office of the Valuer General. They are experts in valuing properties. They compare Housing Tasmanias properties to ones that are rented privately. They give the market rent prices to Housing Tasmania.

The market rent is updated every year. Every tenant gets a letter to tell them when their market rent is changed.

Public housing rent assistance

Housing Tasmania gives low income households a subsidy.

The subsidy is not paid to the tenant. It just means that the tenant does not have to pay full market rent.

Some tenants do not get a subsidy. This is because the rental calculation shows that the tenant can afford to pay full market rent, based on the household income.

The subsidy is automatically calculated. Tenants do not have to apply.

But tenants must give their household and income details to Housing Tasmania.

Tenant Contribution

The tenant contribution is the amount that a tenant has to pay.

The tenant contribution is set using household and income information. It may change when the household or income information changes.

These things can change the tenant contribution:

the type of income

the amount of income

the relationship of household members to the tenant

the age of household members.

If a household gets public housing rent assistance, the tenant contribution will be lower than the market rent.

Tenant contribution is not the rent that is talked about in the Residential Tenancy Act 1997. It is the amount talked about in the Housing Tasmania lease under Section 6.2 Part (d).

The tenant must update household and income details

Tenants must update their household and income details:

when they change, and

when Housing Tasmania asks.

Housing Tasmania needs this information to set the right tenant contribution.

Information must include:

name and age of everyone living in the property

all income amounts and types for everyone living in the property.

Tenants who do not do this are in breach of their lease (section 3.1).

If a tenant does not advise of a change, the rent change may be backdated. Please refer to the Rent Account Management Policy for more information.

Personal client information is protected under the Personal Information Protection Act 2004.

How is the tenant contribution calculated?

Most tenants pay a flat rate of 25 per cent of assessable household income as rent.

Some very low income tenants pay between 23.5 and 25 per cent of assessable income as rent. This method is being phased out.

The 25 per cent rent method

The tenant contribution is 25 per cent of assessable income.

This method began on 24 October 2011. It was fully in place by 7 October 2013.

The old 23.5-25 per cent variable method

This method was used for all tenants from 1988 until October 2011. It is now being phased out.

This method is only for tenants who:

began living in their home before 24 October 2011, and

live alone and have a very low income.

Under this method, the tenant pays between 23.5 and 25 per cent of assessable income. The percentage rate depends on the household income.

Once a tenant is better off under the flat 25 per cent method, they will move to that method. It is not possible to go back to the variable rate method.

Tenants that moved into their home after 24 October 2011 cannot use the variable rate method. Their rent is set using the flat rate method.

Assessable and Non-assessable incomes

Some income is included when the tenant contribution is calculated. Some income is not.

Earned income is assessed

All earned income is assessed for rent setting. Earned income is income that is earned through a job, interest, workers compensation, superannuation, assets or paid parental leave.

Some people have trouble calculating how much they earn, especially if they are self-employed. Housing Tasmania may estimate their income if it cannot be counted any other way. This is called imputed income. Imputed income is an earned income type.

Housing Tasmania removes the tax and Medicare component from earned income before it is put into the rent calculation. Salary sacrifice and other optional payments are not deducted before the rent is calculated.

This is so that tenants who work do not have to pay rent on money they cannot actually receive. It is designed to encourage tenants to work.

Pensions and benefits are assessed

Most pensions, benefits and allowances are assessed at 25 per cent.

Payments made for the care of children are usually assessed at a reduced rate. For example, Family Tax Benefit Part A is assessed at 15 per cent. This recognises the costs of caring for children.

Veterans Affairs Disability Pensions are not usually assessed. They may be assessed if the recipients Centrelink pension or benefit is paid below the full rate.

Payments made to cover a particular cost are not assessed.

Some payments are not assessed at all for rent setting. Housing Tasmania calls these incomes non-assessable.

A non-assessable income is paid for a particular cost that the recipient has to pay. For example, Child Care Benefit is paid to cover child care costs. Pharmaceutical Allowance is paid to assist with the cost of pharmaceuticals.

A payment made for the care of a child (for example maintenance or Family Tax Benefit) is not paid for a particular cost. It can be used to pay for various things clothes, school books, food. These sorts of payments are assessed.

Scholarships are assessed when they are paid to cover living costs. They are not assessed if they are paid only to cover education costs like books and fees.

Household concessions

Some household members get a discount on the tenant contribution. It is called a household concession.

Concessions are automatically applied. The household does not have to apply for them.

Children, grandchildren and other children of the tenant

Children, grandchildren and other children of the tenant get a discount until they turn 27. The discount reduces with age.

This concession encourages young people to stay in the family home.

Other household members, including tenants and their partners do not get a discount.

The next table explains the discounts.

Age

Discount for children, grandchildren and other children of the tenant

Up to age 16

Does not pay rent on casual earnings.

16 to 25

50% of assessable income is included in the rent calculation.

26

75% of assessable income is included in the rent calculation.

Over 26

No concession

Non-related carers

Non-related carers have only half of their income assessed for rent. A non-related carer is someone who:

lives in the same property of the disabled or ill person they care for

is not related to anyone else living in the property, and

is usually paid for their caring service.

Setting Special Rents

Sometimes Housing Tasmania will set a special rent. This might happen if the sole tenant has to go to prison or hospital for a short while.

If this happens, this rent policy may not apply. The Area Manager can decide to set a special rent. This is assessed on a case by case basis.

These policies ta