Rent reductions: JobKeeper and JobSeeker cuts to hurt Victorian tenants
Cuts to JobKeeper and JobSeeker are set to hit Victoria’s tenants the hardest, and result in landlords being flooded with more rent reduction requests. Here’s what both parties should do to cope.
Distressed tenants will be forced to seek further rent reductions as a consequence of the federal government slashing JobKeeper and JobSeeker support by up to half.
Tenants Victoria chief executive Jennifer Beveridge said the state’s renters, who often worked in “hard-hit economic sectors such as hospitality, retail, the arts and tourism”, would be “disproportionately affected” by the welfare cuts.
“The reduction in JobKeeper and JobSeeker payments will have an adverse impact on the ability of a significant number Victorians to afford the basics of life, such as their rent,” Ms Beveridge said.
“We urge Victorian renters who are facing further financial hardship to seek out these much needed rental supports at this challenging time.”
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Full-time workers on JobKeeper will see a $1500 fortnightly payment fall to $1200, while support for part-timers will halve to $750.
A coronavirus supplement for those on JobSeeker will also drop from $550 to $250, reducing the total fortnightly payment from $1115 to $815.
Real Estate Industry Partners chief executive Sadhana Smiles said there would likely be a spike in requests for rent reduction reassessments in the coming weeks as a result.
“When JobKeeper first came in, people made their budgets based on what they could still afford to pay and then made adjustments,” Ms Smiles said.
“But now with a reduction coming through, a lot of tenants will have to readjust their income and expenses again.
“We all know a large portion of expenses goes towards rent.”
She said “very open and honest conversations” between landlords and tenants would help reach a “commercially viable agreement for both parties”.
“Investors are also going to have to reassess their expenses. Nobody is going to come out of this pandemic without being impacted.”
She said landlords could reach out to a mortgage broker to find a more competitive repayment rate for their loan, if they were concerned about making repayments.
And she encouraged property managers to be “on the front foot” in cases of rental hardship and start required negotiations as soon as possible.
Collings Real Estate head of property management Caleb Pikoulas said many young tenants, particularly those in share houses, had given notice to vacate during the pandemic due to lost income.
But he also knew of many landlords who had relied on the welfare packages for financial support.
“I know of a couple who have lost their jobs so they are on JobSeeker,” Mr Pikoulas said.
“They have their own home’s mortgage to pay and they also have a vacant rental property.”
His agency had temporarily reduced management fees to 1 per cent to help support those in crisis.
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Originally published as Rent reductions: JobKeeper and JobSeeker cuts to hurt Victorian tenants