Up Rent Assistance now: Retirees face homelessness

The federal government is being urged to boost Rent Assistance by up to 50 per cent to prevent a growing number of retirees from slipping below the poverty line and into homelessness.

More Australian retirees are facing poverty and homelessness as the rising cost of rent outstrips Rent Assistance increases. Picture: Glenn Hunt

The Australian Government is being urged to boost Rent Assistance by up to 50 per cent to prevent a growing number of retirees from slipping below the poverty line and into homelessness.

A new report from the Grattan Institute found two thirds of Australian retirees who rent in the private market are living in poverty with the problem only getting worse.

The ‘Renting in retirement: Why Rent Assistance needs to rise’ report called on the Australian Government to increase the maximum rate of Rent Assistance to ensure retirees could afford both a roof over their head and basics such as food.

The report said Commonwealth Rent Assistance, which supplements the Age Pension for poorer retirees who rent, was inadequate, with a single retiree relying solely on income support only able to rent 4 per cent of one-bedroom homes in Sydney, 13 per cent in Brisbane, and 14 per cent in Melbourne.

“Rents paid by people who get Rent Assistance have increased nearly 1.5 times faster than the maximum rate of the payment since 2001,” the report said.

“As a result, few retirees who rent can cover the rent and still afford other essentials.

“An increasing number of older Australians are becoming homeless and, unless action is taken, more will face homelessness in the future.”

Report lead author and Grattan Institute Housing and Economic Security Program Director, Brendan Coates said Australia was failing too many Australians who rent.

“Only a further substantial boost to Rent Assistance can ensure that all Australians get the dignified retirement they deserve,” he said.

A growing number of older Australians are facing homelessness. Picture: Richard Walker

The Grattan Institute called on the Government to increase the maximum rate of Rent Assistance by a further 50 per cent for singles and 40 per cent for couples, and for Rent Assistance to be indexed to increases in rents for the cheapest 25 per cent of rental homes in capital cities, rather than to inflation.

“This would ensure 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,” the report said.

“And retired couples could afford to spend $390 a week, enough to rent the cheapest 25 per cent of all one or two-bedroom homes.”

The report said 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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Grattan Institute Housing and Economic Security Program Director, Brendan Coates. Picture: Supplied

The report found retirees renting privately were worse off than retirees who owned their own home or were in public housing.

About 11 per cent of retired homeowners lived in income poverty, after taking account of their housing costs, while 67 per cent of retired Australian households who rent on the private market were living in poverty.

“Poverty rates among single men and single women (who rent privately) are even higher, at 74 and 78 per cent respectively,” the report said.

“Retirees who rent privately also experience much deeper levels of poverty, after accounting for their housing costs, than retirees who live in public housing.”

The average single retiree in a private rental fell below the relative poverty benchmark by $125 a week while the average single public renter of the same age fell below the same benchmark by $29 a week.

“These stark gaps can mean retirees struggling to feed themselves,” the report said.

Georgina Harrisson, CEO of Amplify, an independent platform for policy reform, said the findings from this Grattan Institute report shone a light on the challenges faced by older renters in Australia.

“The Grattan Institute’s reform proposal aims to make sure that our parents and grandparents don’t find themselves in this situation after a lifetime contributing to their community,” she said.

“Australia needs to have a conversation on what it wants from its housing system and that’s why Amplify is thrilled that the Grattan Institute is putting this reform proposal to the Australian people at our National Amplification on housing.”

Originally published as Up Rent Assistance now: Retirees face homelessness