Griffith’s Col Beaton supports calls to boost rent assistance. Photo: Oliver Jacques.
Think tank the Gratton Institute has called on the Federal Government to spend $2 billion to drastically boost its rent assistance payments, given the growing number of retirees who don’t own homes and face financial stress.
“Many retirees who rent … are struggling to get by,” the institute says in a report released on Sunday (9 February).
“Housing is typically Australians’ biggest expense, and most retirees who rent have little super or other financial savings. Retirees who rent – including more than three quarters of single women who rent in the private market – suffer high rates of poverty, and many experience financial stress.”
Commonwealth Rent Assistance is a tax-free federal payment provided in addition to the pension for low-income retirees who rent.
The maximum fortnightly payment a pensioner can receive is $211.20 for singles and $199 combined for couples with high rental expenses relative to overall income.
The Gratton Institute has argued these payments have failed to keep pace with growing rental costs over the past few years. It also observed that home ownership rates among the elderly are falling.
Its report calls on the government to increase the maximum rate of rent assistance by 50 per cent for singles and 40 per cent for couples.
These increases would boost the maximum rate of rent assistance by $53 a week ($2750 a year) for singles and $40 a week ($2080 a year) for couples.
This reform would mean single retirees could afford to spend $350 a week on rent – enough to rent the cheapest 25 per cent of one-bedroom homes across Australian capital cities. And retired couples could afford to spend $390 a week, sufficient to cover rent for the cheapest 25 per cent of all one- or two-bedroom homes.
Col Beaton, a member of advocacy group the Combined Pensioners and Superannuants Association of NSW Inc (Griffith branch), supports the proposed increase.
“A lot of old people are worried about where they will be able to live if the price of their lease goes up. There’s nowhere else affordable to live,” he said.
He said some people were living in fear of being evicted, which was particularly unpleasant for those aged in their 70s and 80s facing health issues.
“They’re being nicer to landlords than they should be,” he said. ”They’re not reporting things that need to be repaired, and that sort of thing.”
Given that younger renters suffer even higher rates of financial stress, the Grattan Institute argues increases to rent assistance should apply to working-age households as well.
Boosting rent assistance in this way for all recipients would cost the government about $2 billion a year, with about $500 million of that going to retirees.
The report says these increases could be paid for by further tightening superannuation tax breaks, curbing negative gearing and halving the capital gains tax discount, or counting more of the value of the family home in the age pension assets test.
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