Federal Budget 2018: Government fails renting pensioners

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Think tank Per Capita has poured scorn on what it calls the “systemic failure” of the Federal Government to help pensioners who rent, saying that Budget 2018 ignores their financial plight.

The group’s Executive Director, Emma Dawson, has called on the Government to immediately increase by 25 per cent the Rent Assistance for pensioners.

Currently, the maximum fortnightly Rent Assistance payment for a single person is $134.80 and $127 each for members of a couple.

In Sydney, the average rental property costs $480 a week and a recent study by Anglicare Australia found that of 67,300 properties listed for rent, fewer than 700 were deemed affordable for Australians on a variety of pensions.

With only three in four of Australia’s 3.6 million retirees owning their home, there are hundreds of thousands of seniors in the rental market.

In an exclusive interview last month, the Minister for Revenue and Financial Services, Kelly O’Dwyer, told YourLifeChoices that 12 per cent of all Age Pensioners rent.

“As at June 2017, there were 300,681 individuals and families aged 65 years or over who receive Rent Assistance,” the Minister said.

Ms O’Dwyer also revealed that a third of assistance recipients have to pay more than 30 per cent of their income on housing.

In YourLifeChoices’ latest Retirement Affordability Index (March 2018), Australia Institute economist Matt Grudnoff revealed that renting pensioners were the hardest hit by a rise in housing costs in the past year.

“A … price increase that continued to climb at a steady but relentless pace was housing. However, by far the biggest impact was on Cash-Strapped Singles. This tribe felt a massive 0.8 per cent increase for the year – the largest for any tribe,” Mr Grudnoff said.

Cash-Strapped Couples were the next to feel the biggest sting in housing costs, weathering a hike of 0.6 per cent.

“These people are doing it tough and we cannot understand why the Government has ignored them in this Budget,” Ms Dawson told YourLifeChoices.

She added that increasingly, it was older women who were being left to struggle to put a roof over their heads.

“Women are much more likely to face poverty after a divorce because they do not have big balances in their super.

“Even if they are left with the house after a split, they sometimes will have to sell it to pay their bills and then begins the downward spiral into poverty when the money runs out.

“It is not right that people should feel very insecure about their housing in old age,” Ms Dawson said.

Public policy outfit the Centre for Independent Studies (CIS) also believes Rent Assistance needs to increase, especially for Australians living in major cities.

“Our research shows that than on average, retired homeowners have about $700,000 worth of wealth tied up in their homes and another $100,000 in other assets,” said CIS research manager Simon Cowan.

“But retirees who rent on average have just $15,000 to their name,” he told YourLifeChoices.

“It seems incongruous that we are giving more assistance to someone lucky enough to own their home, because it is not counted in the means test for the Age Pension.

“This system causes some fairly unequal outcomes for older Australians.”

Mr Cowan said Rent Assistance calculations need to take into account where people live, because in some cities rents are very high compared to certain regional areas.

“The current level of assistance doesn’t reflect the housing costs in Sydney. You could be living in a small town in Tasmania where rents are a fraction of those in the major capital cities, and yet you are entitled to the same maximum payment.

“You do need to cap Rent Assistance to stop people exploiting it, but the cap at the moment is lower than it should be,” he said.

Do you struggle to pay your rent? By how much do you think the Government needs to increase Rent Assistance.

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Age pensioners' housing woes worsen

Shockingly few affordable homes are available for pensioners and low-income earners.

Is a 15 per cent increase in Rent Assistance enough?

Productivity Commission proposes 15 per cent increase in rent assistance.

Written by Olga Galacho


Total Comments: 56
  1. 0

    I am still waiting for my pensionner Concession card that Liar Turnbull promised to return to all those who lost it due to Bastard Hockey’s changes to the assets test penalising all those who worked and saved for their retirement. Those who had More than $813000 on 1/1/2017 had it reinstated, but those who had LESS than $813000 and lost it a few days/weeks/months later did not. Consider this response from Mr Andrew Gee MP. The reinstatement of the PCC was intended to alleviate the shock of pensioners losing their pension and the PCC and the resulting loss of financial security. Yes, but what about those who had Less than $813000 and subsequently lost it a few days later. I now support One nation. I cant tolerate Turnbulls lies any longer

    • 0

      Should never have listened to his lies in the first place, and all those who voted for him last time are responsible for the current situation!

    • 0

      I wish I could believe One Nation was any better, but they are supporting tax cuts for big business and appear to be well and truly in bed with the LNP. Good luck, Mike. You’ll need it whoever is in power.

  2. 0

    The government is faced with a dilemma with rent assistance.
    Rents have gone up primarily, and been generally accepted, by the sharp rise in the cost of that rental property.
    That sharp cost has also clearly and been generally accepted, been caused primarily by the extraordinarily generous tax concessions for negatively geared properties.
    The Coalition government denies this connection arguing against numerous independent assessments.
    So, to increase rent assistance, the government would have to concede that the significant rise in the cost of rental properties has caused the consequent rise in rent which necessitates an increase in rent assistance. But that would trigger an almighty and very embarrassing fight from those who blame the government’s failure to address negative gearing in any way.
    So the government has taken the gutless way out by simply totally ignoring all representations regarding anything to do with the cost of housing in general and rentals in particular.

    • 0

      I can see no reason why our kids, struggling with raising kids while paying huge mortgage repayments themselves should have to subsidise life style choices for pensioners.

      If pensioners wanted to retire in a capital city, they should have made the necessary arrangements like buying a house a long time ago. If you failed to do that, go live somewhere you can afford. you have no right to expect someone else to subsidise your lifestyle choice.

      There are plenty of places where rents are affordable, even on the pension. I believe Jandowae is nice this time of year, & the rents are low.

    • 0

      Good on yer has been. Another case of I’m a smart ass so why aren’t you. There are a thousand reasons why some people are not as well off as you but don’t let that thort bubble get in the way of ‘just move”. People have families and friends and a whole history of living in a city and to just up and leave and live in a place away from families and friends is not that easy. Believe it not some people have paid their due tax commitments during their life span and so lets not get carried away with subsidised life style choices. One of the reasons apart from negative gearing is the supply and demand of housing. Bring in 190,00 immigrants every year and not build enough homes and you have the perfect scenario for property increases, increases in property for which they have done absolutely nothing except pay a mortgage instead of rent !! The capital gains on property are obscene so don’t go puffing the chest out vilifying people who were not able to jump on the property gravy train which you seem to be so proud of.

  3. 0

    Well, hey, you did not expect this bunch of bast**ds to do anything for those on the Age Pension or Newstart did you ? Did you ? Just make damned sure you do NOT vote for the coalition in the upcoming election, and do NOT waste your vote on a minor party, that’s just giving the farm back to the encumbent ass**les.

    • 0

      So if you are not going to waste your vote on a minor party, does that mean you are going to vote for Bill Shorten? Shorten has already indicated how he he is going to help the pensioners, he backtracked very quickly when he realised he might lose a few votes, make no mistake with the aid of the greens he will he will reinstate his tax on the pensioners, that might not even be the worst decision Labor makes when it gets in power, he has already said he would increase the refugee intake in line with the greens policy, so a vote for Bill is the same as a vote for the greens, so in fact you will be voting for a minor party. In no way will Labor’s policy assist pensioners that are struggling, neither party seems to have the answer, allowing thousands more refugee’s into the country will only make the plight of pensioners who are renting even harder, there has to be a better way, governments should be proactive in supplying affordable housing for pensioners and others who are struggling, there is plenty of government land available, start building low cost housing, win win situation, plenty of job oppourtunities as well.

    • 0

      Shorten won’t help you – remember they refused to revert the Asset Test changes? It is better to vote AGAINST all current seat-warmers (Liberals, Labor and Greens in particular) by putting them LAST in preferences, and vote for any alternative who you prefer ideally one who can win.

    • 0

      Whar rubbish you both write here , Jim and George, you know darn well it doesn’t matter who you vote for in a minor party or Independant one of the major parties will always be the one who will get into power, and not voting at all makes no sense, just gets you a fine.

    • 0

      Like it or not, the only other party with enough seats to actually form a Government is Labour !

    • 0

      Misty, it is fatalistic losers like you (presume you are a Labor stooge) who perpetuate that myth.
      Enough people need to start voting for alternatives – I didn’t pick who that will be as it depends on each seat who CAN win. Even if you want to vote for a major party, as long as that person is currently NOT on the seat, it is OK, as it will remove the current seat-warmer – we have to make them insecure to start listening to the people. And, not allow them to get their 8 years on the seat to access their fat, undeserved, untested pensions.

    • 0

      Not sure which part of my comment you think is rubbish, I made no reference to not voting, the only relevent comment I made was if you vote Labor you are also voting for a minor party in the greens, which I certainly disagree with, perhaps you should read my comment again before you make silly statements. The last part of my comment regarding providing low cost housing can only be achieved by one of the major parties, but I can’t see either of them doing it, can you?

    • 0

      Jim – nonsense.
      Shorten categorically stated in the Budget reply tonight that self funded retirees would not lose the dividend imputation credit.
      Your attempt to claim he would do an Abbott when is just right wing BS. Retirees was NEVER his original target!

    • 0

      Another response from the paid up member of the Labor party, don’t you think it’s about time you declared your interest, every time you make a comment you deride every one else’s opinion, typical left wing bully, no matter what Shorten is saying now he will change his mind after the election if only to appease the greens, Shorten knew exactly who he was targeting, and if he didn’t know who it was going to affect then is this the man you want running the country, he has proved he has no understanding of economics and has no idea who is going to be affected by his policies made on the run, as soon as it was pointed out to him that it could cost votes he soon backtracked, how could you possibly trust this man.

    • 0

      Mick, actually Shorten stated that retirees WERE his target, and he is certainly crippling self-funded retirees with limited means. His policy forces low income earners and low-asset-holding SFRs to pay the company tax, while the rich get it all back! Good one! And he did NOT say SFRs would no lose the imputation credit. He said super fund with at least one member receiving a pension before March 28 would retain their credits. The rest can apparently go to hell!

      I have now asked the Greens to take this matter up at a high level in the hope that, in the absence of any response from the ALP, the Greens will see the wrong of it and pressure Shorten by threatening to oppose if he doesn’t correct his wrongs. (And no, I’m NOT a Greens supporter. I just happen to know a few who are high up in the party.)

  4. 0

    Like many pensioners I still upset about the changes that resulted in a significant drop in our pension. won’t and should not vote for either major party again. the recent changes to allow me to earn via paid work will help get back to where I was before losing some pension t…. but should I need to stay working until I drop?????????

  5. 0

    consider a 25% rise in pension you will not have to think too hard on what the greedy landlords will do.$$$$$

  6. 0

    There we go again – a Think Tank who seeks to TARGET certain sections, or Tribes as YLC calls it, and demand benefits for certain sections. For example, the homeowners also were hit hard by steep rises in costs, and most pensioners were hit by the nasty Asset Test changes, and this article ignores them. This targeted way is the surest way to cause divisions, and sets off groups against each other. I know that’s Labor’s (defective) approach, but Divide-and-Rule is also used by Liberals and others as a means of confusing the electorate and getting their way – the pommies excelled at it for centuries! You WON”T get good change that way!

    The best solution is to give Universal Pension to all simply based on Age (65) and Residency (of say 15 years), with NO other tests, and let all work hard to improve on that with additional income, downsize, etc, etc – in other words a solution which gives YOU all flexibility with no dependence on Centrelink or further Govt pension policy changes. Also, make Politicians equal to others, by removing their Special, Untested, Undeserved, Large Pensions. Now, which Political Party will offer this – anyone?

    • 0

      So you are quite happy with giving millionaires a pension George?.

    • 0

      They will get taxed on it at their marginal rates, and it will be negligible for them anyway. Also, in other countries many rich don’t even apply for it anyway. So, no problem. Your envy clear has no limit, as you would rather have a disgusting unfair system as we have now which discourages savers, than allow one dollar to go to someone better off. If they worked harder than you and earned more wealth than you, they deserve it!

    • 0

      Agree George. Most first world countries have one.

      Misty – I see your point but it’s not hard to legislate a ceiling above which the pension is not paid.

    • 0

      George, sadly both parties play on the envy of people like Misty, who can’t think past ”I’ve got less so I’m more entitled”. Never occurs to them to consider that people who worked harder and/or went without more to save EARNED and DESERVE reward, and it’s economically harmful to the entire society to deny them that reward. The country is in a mess because of too many handouts and too little personal responsibility and reward for effort. That’s not to say we should ignore our obligations to the genuinely needy, but needs-based welfare drives need and manipulation to appear needy. We would have a far stronger economy if we adopted a universal pension.

      And Misty, anyone who thinks a million is a lot of money for a recent retiree facing maybe 30+ years of inflation and rising health and care costs with $0 income is clearly not very smart. Pensioners receive around $2 million from the government over the course of their retirement. People who worked and saved have to live on HALF that! Goodness, no wonder we have budget problems! How many who could easily retire with $1 million have seen the light and opted for the $2 million handout instead?

  7. 0

    I cannot see how rewarding people for not buying a home helps the economy. I agree with providing basic accommodation for the genuinely needy, but rent assistance is too broad. Add the discrimination against home owners through the assets test and many would be better off NOT owning a home. We need to STOP this idiotic approach to welfare. It’s not working for the genuinely needy and the cost is excessive because it kills incentive and punishes people who strive to be as independent as possible. The whole system is seriously flawed. A universal pension, combined with fair taxation, with a sensible approach to providing subsidized public housing for the genuinely needy, would cost far less and achieve far more.

    • 0

      Of course you can OGR. If investors were not in the market then people would be living in tents and taxes would need to rise so that governments could again build housing for the millions.
      The current problem is a lack of stock and the importation of people together with a lack of building to keep up for at least 2 decades.

  8. 0

    The greatest bunch of morons ever to hold office. They just can’t do anything right.

  9. 0

    Scott Morrison and the rest of those cronies are a lot of mongrels there was NOTHING in that budget for the least well off and the bloody HIDE giving a rise of &^%$^^$ $10.50 a week to low earners what an insult — he is nothing but an arrogant elitist, would you believe of the age of 49 an absolute piece of scum!

  10. 0

    Perhaps a strong program of building more housing, turning empty apartment or city buildings into cheap rentals for seniors and other low income people, and increasing rent assistance would help with employment and housing?

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