The problem:

Too many recipients of Commonwealth Rent Assistance (CRA) are still in housing stress 

The solution:

Increase the maximum amounts of CRA payments.  

Commonwealth Rent Assistance (CRA) is a payment paid to tenants who receive certain social security payments (in most cases, Newstart Allowance, Disability Support Pension or Age Pension) and who don’t live in public housing. 

CRA is paid as a co-payment: if your rent is above a certain threshold, you receive 75 cents for every dollar you pay, up to a certain maximum amount. (The thresholds and maximum amounts vary according to household type).

These maximum amounts are increased from time to time, but have not kept pace with increases in rents.

Because of the high rents they pay, more than three-quarters of CRA recipients in New South Wales (76.4 per cent) are eligible for the maximum amount of payment. Even after putting all their CRA payment towards the rent, 42 per cent of CRA recipients still pay more than 30 per cent of the rest of their income in rent; 15 per cent still pay more than half of the rest of their income in rent. [1]

Increasing the maximum amounts of CRA would help vulnerable households experiencing the worst affordability problems. We support the Australian Council for Social Service’s recommendation for an increase of 30 per cent. And going forward, the maximum amounts should be indexed to a more realistic measure of rental costs.

[1] Productivity Commission (2015) Report on Government Services 2015: Volume G: Housing and homelessness, Productivity Commission.

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