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.