Rent rises pile on the pressure

Rental costs in some capital cities have gone through the roof, which is alarming news for the YourLifeChoices retirement tribes that receive an Age Pension and don’t own a home.

A Domain report released yesterday shows that median rents for apartments rose by 14.8 per cent in Hobart in the past year to $350 per week, by 5.9 per cent in Canberra to $450, by 3.8 per cent in Sydney and Melbourne to $550 and $410 respectively, by 1.7 per cent in Adelaide to $300 and were static in Perth at $300.

The average increase for apartments across Australia was 3.3 per cent.

Centrelink’s Rent Allowance in the past year has increased by 1.62 per cent for couples (from $191 per fortnight in March 2017 to $194.10 in March 2018) and by 2.04 per cent for singles ($117.80 to $120.20).

As one YourLifeChoices member said after the March announcement: “So it looks like I will be getting 90 cents per week increase in Rent Allowance (the increase compared with the September 2017 rates) and I have just received a letter notifying me that my rent will increase by $10 pw from 1st May. Definitely going backwards.”

Centrelink rent assistance rates for people with no dependent children on 20 March, 2018.

Family situation

Maximum payment per fortnight

Maximum payment is paid if your fortnightly rent is more than

No payment if your fortnightly rent is less than

Single

$134.80

$299.93

$120.20

Single, sharer

$89.87

$240.02

$120.20

Couple

$127.00

$363.93

$194.60

One of a couple who are separated due to illness

$134.80

$299.93

$120.20

One of a couple who are temporarily separated

$127.00

$289.53

$120.20

For Cash-Strapped Couples and Singles, the challenge to enjoy a dignified retirement while renting on the Age Pension gets harder.

Figures in the March edition of the Retirement Affordability Index™ paint a grim picture in which, for some, income does not match essential expenditure.

After the 20 March increases, a single Age Pensioner can receive $907.60, including supplements, per fortnight ,while YourLifeChoices estimates fortnightly expenditure is $868.96. That leaves $38.64 per fortnight for non-essentials.

Cash-strapped couples were worse off. They can receive a maximum fortnightly Age Pension, with supplements, of $1368.20. However, YourLifeChoices estimates their essential expenditure to be $1382.86.

Take into account the 3.28 per cent increase in average rental costs and their situation appears dire.

Late last year, Mission Australia called for a revamp of retirement payments, especially to older people who did not own their home.

In a report titled Ageing and Homelessness: solutions to a growing problem, the organisation stated that older Australians who rented were more likely to become homeless as the Age Pension failed to keep up with their housing costs.

“Those who become homeless for the first time later in life are likely to have been private renters with a stable housing history who have experienced significant health problems, family problems, unaffordable rent, eviction or accessibility problems,” Mission Australia said.

“A review of retirement incomes is required to ensure that older people can meet the cost of living. A particular focus is needed on social security payments for older people who do not own their own home and single older people, including the growing numbers of older women at risk of homelessness.”

Mission Australia Chief Executive Catherine Yeomans called for a commitment from governments to build 60,000 extra public housing dwellings specifically for older people.

“If funding was made available to build one new supported aged care facility in each state each year, that would have a meaningful impact on addressing the current shortfall.”

Are higher rental costs having an impact on your lifestyle? Can you see a way to ease the pain?

Related articles:
The case for a Universal Age Pension
Tale of two retirees
Financial challenges

Written by Janelle Ward

RELATED LINKS

The solution to the retirement poverty trap

It's possible for every Australian to live in retirement with dignity.

Retirees share their journey and ponder what the future holds

We asked for your stories if you were finding life as a retiree challenging.

How to survive retirement on a small income

How to overcome fear of running out of money when you retire.



SPONSORED LINKS

LOADING MORE ARTICLE...