Scrapping rent grant 'may hurt the poor'

| 29.04,12. 05:16 AM |






Scrapping rent grant 'may hurt the poor'


SOME of the state's poorest renters could be put under further financial strain by an O'Farrell government decision to cut a key rental assistance grant next week, housing advocates warn.

From May 1, the government will no longer provide Rentstart grants, which cover the cost of a bond and two week's rent for very low-income earners who struggle to enter the rental market.

The $25 million scheme, which is taken up by about 21,000 people per year, will instead be replaced by interest-free loans, worth 75 per cent of the cost of a bond, which the tenant repays within 12 to 18 months.

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The Community Services Minister, Pru Goward, said fewer than half of the existing grants were returned by landlords at the end of a tenancy, due to property damage or unpaid rent.

The new scheme, she said, would provide an incentive for tenants to care for the property.

''All the money they have paid which has not been validly claimed by the landlord will be returned to them at the end of their tenancy,'' she said.

Shelter NSW, the state's peak housing advocacy group, said the change was positive in so far as it would allow tenants to keep the bond if it was returned at the end of the tenancy.

But its acting executive officer, Craig Johnston, warned having to repay the loan would put new financial strain on those least able to afford it.

''Given that recipients might be paying up to 45 per cent of their income on just the rent, the pressure from the repayments will be massive,'' he said in a letter to Housing NSW.

Councillor Mark Hankin from the Cabramatta Community Centre said he was concerned about the impact of the changes on his clients, who included young people living off Youth Allowance and recently-arrived refugees. ''This is only going to further exacerbate a situation that's difficult already,'' he said.

The Opposition Leader, John Robertson, has called on the government to scrap the changes.

"The O'Farrell Government should be making it easier for struggling families to find their own housing and stay out of the public system, not giving them an additional financial burden," he said.

"Many families will be pushed back into a destructive cycle of housing uncertainty and homelessness through these changes."


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