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Housing Assistance: Government assistance for housing
GOVERNMENT ASSISTANCE FOR HOUSING
(b) Includes funding for construction, maintenance, support services, and a component for administration.
(c) Includes funding for loans, mortgage relief and deposit assistance, and a component for administration.
Source: Renters in Australia (cat. no. 4138.0); Department of Social Security, Housing Assistance Act 1989 Annual Report 1994-95 and unpublished data; and Department of Health and Family Services, Two Weeks in September: National Census of SAAP Funded Accommodation Services 10-24 September 1995.
The need for housing assistance
The need for housing assistance is not only dependent on income. For example, many older people with low incomes own their home, have low housing costs and little need for assistance (see Australian Social Trends 1996, Housing for older people).
Affordability is one indicator of the need for housing assistance. While there is no single measure of housing affordability, a commonly used measure is the ratio of housing costs to income2. Households can be considered to have housing affordability problems if their income is relatively low (in the lowest 40% of the household income distribution) and they spend more than 30% of their income on housing.
Using this measure, 11% of Australian households had affordability problems in 1994. Households in the private rental market were most likely to have housing affordability problems. However, the affordability measure for private renters may be artificially high because it does not take into account the value of rent assistance.
One-parent and lone-person households were more likely to experience housing affordability problems (24% and 19% respectively) than couple households (7%). One-parent and lone-person households renting in the private market were particularly prone to affordability problems (62% and 44% respectively).
While affordability is one indication of the need for housing assistance, access to suitable housing is also an important issue. Some households may live in housing which is neither affordable nor suitable. Others may trade off suitability for more affordable accommodation. While their housing may be affordable, it may be too small for the size of the household, in need of repair, or located far from employment and community facilities.
Overall, the vast majority of Australian households found their dwelling acceptable. However, in 1994, 3% of households expressed dissatisfaction with their dwelling. Households in public housing (8%) and in the private rental market (6%) were more likely to be dissatisfied than others. Public renters were more likely to express dissatisfaction with their dwelling than private renters, despite public housing being more affordable. This suggests that some public housing tenants trade off suitability for affordability.
HOUSING AFFORDABILITY(a), 1994
(b) Median weekly housing costs which comprise: rates, rents, loan repayments, body corporate fees, and maintenance.
(c) Low income households (in the lowest 40% of income distribution) who spend more than 30% of their income on housing.
(d) These figures include rental rebates to public renters, but not private rent assistance. The average value of private rent assistance has been estimated at less than half that of public rental rebates.
(e) Refers to couples with dependent and/or non-dependent children.
Source: Australian Housing Survey (unpublished data).
In 1994-95, government expenditure on public housing was $1.6 billion1, and 6% of all households (367,000) were accommodated in public housing. This was up slightly from 5% of households in 1976. The proportion of households living in public housing varied between States and Territories, from 3% in Victoria to 21% in the Northern Territory.
Public housing is provided at low cost. For low-income public tenants, rents are generally set at a maximum of 25% of income. The median weekly housing costs of public renters in 1994 was $52, compared to $133 for private renters.
Over recent decades, public housing has been increasingly targeted towards those most in need. In 1994, 78% of households in public housing were in the lowest 40% of the household income distribution. Government pensions and benefits were the main source of income for the reference person in 70% of public renter households, compared to 24% of all households.
A large proportion of households in public housing were lone-person and one-parent households. In 1994 one third (34%) of all households in public housing were lone-person households, compared to 20% of all households. 28% of households in public housing were one-parent households, compared to 8% of all households.
Lone-person and one-parent households have the lowest average incomes of all household types, and it is not surprising that they are over-represented in public housing. Many of the lone-person households in public housing were aged people.
One measure of unmet demand for public housing is the number of applicants added to waiting lists each year. The number of new applicants added to public housing waiting lists increased from 82,400 in 1984-85 to a peak of 139,700 in 1987-88, falling to 108,800 in 1993-94. Despite an increase of 45% in the number of public sector dwellings during this decade, demand exceeded supply by a ratio of three to one. That is, for every household newly accommodated in public housing, at least two more applied for housing3.
On average, people in public housing receive a higher level of subsidy than those receiving other forms of housing assistance such as private rent assistance. The average annual value of public housing rent rebates to low-income households in 1994-95 was estimated at $4,000, while recipients of private rent assistance received an average of approximately $1,600.1
Public renters also have a level of security of tenure not available in the private rental market. There are disadvantages however, in that public renters have less choice about where they live than those renting in the private market. In 1994, 6% of public renter households expressed dissatisfaction with the location of their dwelling, compared to 3% of private renter households. Furthermore, public housing may not be a viable option for people whose need for assistance is of a temporary nature.
An Industry Commission report confirmed that public housing is a cost-effective way of providing housing assistance. However, the report highlighted the need for a mix of assistance measures, including public housing, rent assistance, and community housing, in order to meet people's differing needs4.
HOUSEHOLDS IN PUBLIC HOUSING, 1994
Source: Renters in Australia (cat. no. 4138.0); and Australian Housing Survey (unpublished data).
HOUSEHOLD TYPES IN PUBLIC AND TOTAL HOUSING, 1994
(a) Refers to couples with dependent and/or non-dependent children.
Source: Renters in Australia (cat. no. 4138.0 and unpublished data).
Private rent assistance
Private rent assistance is paid to people with low incomes who are eligible for a Social Security or Veterans' Affairs payment, and who rent in the private market. In 1994-95, government expenditure on rent assistance to Social Security clients was $1.5 billion1. In 1995-96, the maximum fortnightly rate for a single person with no children was $73.80, and $86.00 for a couple with one or two children5.
In June 1996, 1,040,000 people were receiving rent assistance, substantially more than the 480,000 in 1984. This increase is related to a widening of the eligibility criteria in the early 1990s, and to an increase in the number of people receiving government pensions and benefits. It is also related to an increase in the cost of renting in the private market (see Housing - national summary table).
As with public housing renters, a large proportion of rent assistance recipients are either lone persons or lone parents. At December 1995, 60% of those receiving rent assistance from the Department of Social Security were single people and 18% were one-parent families. One quarter of all rent assistance recipients were over 70 years of age3.
PEOPLE RECEIVING PRIVATE RENT ASSISTANCE AT 30 JUNE(a)
(a) Data for 1995 and 1996 are preliminary.
Source: Department of Social Security (unpublished data).
Home purchase assistance
The Commonwealth and State and Territory Governments fund a range of home purchase assistance targeted at low to moderate income earners, including loans, deposit assistance and rental/purchase arrangements. The form of assistance available, and eligibility criteria, differ between States/Territories. In 1994-95 government expenditure on home purchase assistance was $818 million1.
In 1994-95, 11,879 housing assistance loans were granted1. Of these, 9,352 were establishment loans and 2,527 were other loans such as second mortgages or top-up loans. The average value of establishment loans was $70,000.
There was a rapid increase in the number of loans granted between 1988 and 1990 when mortgage interest rates peaked. Since then, however, the use of home purchase assistance has decreased. This is related to a decline in the availability of assistance due to problems with home purchase assistance arrangements in some States. In New South Wales, for example, all new lending under the Homefund program was suspended in April 1993, and no new home purchase assistance products have been introduced since then1. The decline is also related to a reduction in commercial mortgage interest rates (see Housing - national summary table).
HOUSING ASSISTANCE LOANS GRANTED AT 30 JUNE
Source: Department of Social Security, Housing Assistance Act 1989, Annual Report 1994-95.
The government also provides assistance in meeting the short-term accommodation needs of homeless people. Capital funding for crisis accommodation is provided by the Commonwealth Government through the Crisis Accommodation Program. In 1994-95 the Commonwealth allocated $42 million to the Crisis Accommodation Program1.
The Commonwealth and State and Territory Governments also provide assistance in meeting the needs of people who are homeless through the Supported Accommodation Assistance Program (SAAP), a jointly funded program. The aim of the program is to assist homeless people to return to independent living. In 1994-95 $185 million was provided under SAAP, bringing total government funding for crisis accommodation to $227 million6. Funds are provided to community organisations and local governments for services such as refuges, shelters and half-way houses, and also for referral, counselling and advocacy services. Approximately 1,600 service outlets were funded under SAAP in 1994-95.
Most services funded by SAAP are aimed at one of five main target groups. These are: young people, women (and children) escaping domestic violence, families, single men and single women. However, some services assist people from more than one group. The nature of available SAAP services influences the type and number of people who receive assistance.
A two-week census of crisis accommodation services funded by SAAP in September 1995 found that an average of 10,800 people sought accommodation each night, 93% of whom were accommodated6.
Of those accommodated, 24% were in services for young people, 21% in services for women escaping domestic violence and 19% in services for families. A further 19% were accommodated in services for single people (mostly men) and 17% in services aimed at more than one group.
The proportion of people seeking accommodation who were turned away gives some indication of unmet demand for crisis accommodation. Overall, 7% of requests for accommodation were not successful. This includes some people who were double counted because they were turned away from more than one service. In addition, some people may have been turned away at one or more services, but found accommodation at another service. 55% of those who were not accommodated were turned away because the service was full.
While services for single women had the highest turn-away rate of prospective clients (13%), the numbers from this target group were relatively small. 10% of prospective clients were turned away from services aimed at young people and families, representing 4% of all those seeking accommodation (nearly 500 people).
PEOPLE SEEKING CRISIS ACCOMMODATION AT SAAP FUNDED SERVICES EACH DAY, SEPTEMBER 1995(a)
(b) Some services may on occasion accommodate people outside their target group.
Source: Department of Health and Family Services, Two Weeks in September: National Census of SAAP Funded Accommodation Services 10-24 September 1995.
1 Department of Social Security 1996, Housing Assistance Act 1989 Annual Report 1994-95, AGPS, Canberra.
2 National Housing Strategy 1992, National Housing Strategy: Summary of Papers, AGPS, Canberra.
3 Australian Institute of Health and Welfare 1995, Australia's Welfare: Services and Assistance 1995, AGPS, Canberra.
4 Industry Commission 1993, Public Housing, Report No. 34, AGPS, Canberra.
5 Department of Social Security 1996, Annual Report 1995-96, AGPS, Canberra.
6 Department of Health and Family Services 1996, Two Weeks in September: National Census of SAAP Funded Accommodation Services, 10-24 September, 1995, AGPS, Canberra.