PolicyHousing Tasmania Rent Setting SDMS ID Number P2102/0179-049SDMS Title Housing Tasmania Rent Setting – Policy – P2102/0179-049Effective From 18 October 2013Applies to All Housing Tasmania tenantsCustodian Manager Housing StrategySummary This policy outlines how Housing Tasmania manages tenancies

in relation to setting the tenant contribution that tenants pay for their Housing Tasmania home.

Replaces Doc. No. n/aAuthor Area Housing Strategy – Social and Affordable Housing Policy UnitContact Manager, Housing OperationsReview Date 31 January 2014

Policy Intent This policy explains how Housing Tasmania sets the rent for its properties. The rent is set at an affordable rate for each household. This is done by using household and income details.

Application Housing Tasmania charges affordable rents for its properties.Market rent is the maximum that a household can pay. It is the price that would be charged in the private market. Most households do not pay full market rent.Housing Tasmania subsidises the rent for low income households.The amount that tenants pay is called the tenant contribution. The tenant contribution is based on household and income details. It changes when the household or income details change.Housing Tasmania does this so that the rent is affordable.Tenants can choose to pay weekly or fortnightly. The tenant contribution must be paid in advance. The Rent Account Management Policy talks about rent payment and arrears.This policy affects only rent setting for Housing Tasmania’s general housing, Aboriginal housing and Direct Tenancy programs. It is not used for Community Tenancies or other programs.

Market Rent No tenant will pay more than the market rent of their property.When Housing Tasmania talks about ‘market rent’ it means the rent that is talked about in the Residential Tenancy Act 1997. Housing Tasmania has to follow the rules in the Act if it wants to change the market rent.Market rent is not set by Housing Tasmania. It is set by the Office of the Valuer General. They are experts in valuing properties. They compare Housing Tasmania’s properties to ones that are rented privately. They give the market rent prices to Housing Tasmania.The market rent is updated every year. Every tenant gets a

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letter to tell them when their market rent is changed.

Public housing rent assistance

Housing Tasmania gives low income households a subsidy.The subsidy is not paid to the tenant. It just means that the tenant does not have to pay full market rent.Some tenants do not get a subsidy. This is because the rental calculation shows that the tenant can afford to pay full market rent, based on the household income.The subsidy is automatically calculated. Tenants do not have to apply.But tenants must give their household and income details to Housing Tasmania.

Tenant Contribution The tenant contribution is the amount that a tenant has to pay.The tenant contribution is set using household and income information. It may change when the household or income information changes.These things can change the tenant contribution:

the type of income the amount of income the relationship of household members to the tenant the age of household members.

If a household gets public housing rent assistance, the tenant contribution will be lower than the market rent.Tenant contribution is not the rent that is talked about in the Residential Tenancy Act 1997. It is the amount talked about in the Housing Tasmania lease under Section 6.2 Part (d).

The tenant must update household and income details

Tenants must update their household and income details: when they change, and when Housing Tasmania asks.

Housing Tasmania needs this information to set the right tenant contribution.

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Information must include: name and age of everyone living in the property all income amounts and types for everyone living in the

property.Tenants who do not do this are in breach of their lease (section 3.1).If a tenant does not advise of a change, the rent change may be backdated. Please refer to the Rent Account Management Policy for more information.Personal client information is protected under the Personal Information Protection Act 2004 .

How is the tenant contribution calculated?

Most tenants pay a flat rate of 25 per cent of assessable household income as rent.Some very low income tenants pay between 23.5 and 25 per cent of assessable income as rent. This method is being phased out.The 25 per cent rent methodThe tenant contribution is 25 per cent of assessable income.This method began on 24 October 2011. It was fully in place by 7 October 2013.The old 23.5-25 per cent variable methodThis method was used for all tenants from 1988 until October 2011. It is now being phased out.This method is only for tenants who:

began living in their home before 24 October 2011, and live alone and have a very low income.

Under this method, the tenant pays between 23.5 and 25 per cent of assessable income. The percentage rate depends on the household income.Once a tenant is better off under the flat 25 per cent method, they will move to that method. It is not possible to go back to the variable rate method.Tenants that moved into their home after 24 October 2011

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cannot use the variable rate method. Their rent is set using the flat rate method.

Assessable and Non-assessable incomes

Some income is included when the tenant contribution is calculated. Some income is not.Earned income is assessed

All earned income is assessed for rent setting. Earned income is income that is earned through a job, interest, workers compensation, superannuation, assets or paid parental leave.Some people have trouble calculating how much they earn, especially if they are self-employed. Housing Tasmania may estimate their income if it cannot be counted any other way. This is called imputed income. Imputed income is an earned income type.Housing Tasmania removes the tax and Medicare component from earned income before it is put into the rent calculation. Salary sacrifice and other optional payments are not deducted before the rent is calculated.This is so that tenants who work do not have to pay rent on money they cannot actually receive. It is designed to encourage tenants to work.Pensions and benefits are assessed

Most pensions, benefits and allowances are assessed at 25 per cent.Payments made for the care of children are usually assessed at a reduced rate. For example, Family Tax Benefit Part A is assessed at 15 per cent. This recognises the costs of caring for children.Veterans’ Affairs Disability Pensions are not usually assessed. They may be assessed if the recipient’s Centrelink pension or benefit is paid below the full rate.Payments made to cover a particular cost are not assessed.

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Some payments are not assessed at all for rent setting. Housing Tasmania calls these incomes non-assessable.A non-assessable income is paid for a particular cost that the recipient has to pay. For example, Child Care Benefit is paid to cover child care costs. Pharmaceutical Allowance is paid to assist with the cost of pharmaceuticals.A payment made for the care of a child (for example maintenance or Family Tax Benefit) is not paid for a particular cost. It can be used to pay for various things – clothes, school books, food. These sorts of payments are assessed.Scholarships are assessed when they are paid to cover living costs. They are not assessed if they are paid only to cover education costs like books and fees.

Household concessions

Some household members get a discount on the tenant contribution. It is called a household concession.Concessions are automatically applied. The household does not have to apply for them.Children, grandchildren and other children of the tenant

Children, grandchildren and other children of the tenant get a discount until they turn 27. The discount reduces with age.This concession encourages young people to stay in the family home.Other household members, including tenants and their partners do not get a discount.The next table explains the discounts.

Age Discount for children, grandchildren and other children of the tenant

Up to age 16 Does not pay rent on casual earnings.16 to 25 50% of assessable income is included in

the rent calculation.26 75% of assessable income is included in

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the rent calculation.Over 26 No concession

Non-related carers

Non-related carers have only half of their income assessed for rent. A non-related carer is someone who:

lives in the same property of the disabled or ill person they care for

is not related to anyone else living in the property, and is usually paid for their caring service.

Setting Special Rents

Sometimes Housing Tasmania will set a special rent. This might happen if the sole tenant has to go to prison or hospital for a short while.If this happens, this rent policy may not apply. The Area Manager can decide to set a special rent. This is assessed on a case by case basis.These policies talk about special rents:Absence from Tenure policy Family Violence Policy .Rent Account Management Policy .

If a tenant does not pay rent on time

Tenants must pay the tenant contribution when it is due.Sometimes a tenant has trouble paying their tenant contribution on time. Housing Tasmania may ask the tenant if they want help and advice about how to pay their rent on time.If the tenant wants help, Housing Tasmania will refer them to Housing Connect.Housing Connect does not give tenants money to cover their rental payments. It links tenants with support. Housing Connect staff may talk about other housing options with the tenant. See

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the Housing Connect Fact Sheet for more information.See the Rent Account Management policy for more detail on arrears and managing the payment of rent.

Income Confirmation

The Australian Government increases some pensions and benefits four times a year. Normally a tenant would have to tell Housing Tasmania when the household income has increased.But tenants and household members can give Housing Tasmania approval to get this regularly updated information straight from Centrelink. This is called ‘income confirmation’.Households that use income confirmation only have to update their details with Housing Tasmania if there is a big change, for example:

if a household member enters or leaves the household, or if a member of the household starts or finishes getting a

payment.Tenants must provide these details soon after they change. Otherwise the tenant may have to pay arrears.Income confirmation is only for Centrelink incomes. If a household receives income from other places (like Veterans’ Affairs or a job), they will have to give this information to Housing Tasmania separately.A Housing Tasmania household member can take away its consent at any time by filling in the Withdrawal of Consent form and giving it to Housing Tasmania.

Household Income Statements

If a household does not use income confirmation, the tenant must complete a paper Household Income Statement (HIS).All household members and their incomes should be written on the Household Income Statement. Tenants must show documents that prove income amounts.A tenant must fill in a Household Income Statement:

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when Housing Tasmania requests it, or when there is a change in the number of people living in

the household, or when there is a change in anyone’s income.

Households that do not provide income details

If a tenant does not update their household or income details when asked, their rent will be set to market rent.Tenants paying market rent still have to provide details of the household and income composition. That is because the information is used for planning and other policies.

Tenants with no income

If a tenant says that they have no income, Housing Tasmania will usually deem their income. This means that Housing Tasmania will assume that the household receives an income. The deemed income is usually the amount a similar household would get from the Australian Government as income support.Please see the Clients with Nil or No Income Policy for more information.

Advising tenants of changes to the rent

Housing Tasmania will write to the tenant before the tenant contribution or market rent change.The letter will include:

the new tenant contribution/market rent, and the start date for the new payment.

Tenants can talk to their local Housing Tasmania office about changes.Housing Tasmania uses an information database to set rents. Rent errors are rare. A tenant can ask Housing Tasmania to review the rent if it looks wrong. The tenant should contact their usual Area contact first. Usually Housing Tasmania will ask the tenant for new household and income details. Housing Tasmania will then check the rent.

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If the tenant still thinks the tenant contribution is wrong, they can raise a dispute with the Housing Review Committee. Market rents are not set by Housing Tasmania, so market rent enquires cannot go to the Housing Review Committee.

Legal Framework This Policy adheres to the Residential Tenancy Act 1997 and the Personal Information Protection Act 2004 where relevant.

Exemptions N/A

Responsibilities/ Delegations

All Housing Operations staff are responsible for ensuring the appropriate application of the policy. Area Managers are responsible for Area management including policy application.

Disclaimer This is a statewide policy and must not be re-interpreted so that subordinate policies exist. Should discrete operational differences exist, these should be expressed in the form of an operating procedure or protocol that must be approved at the same level as this policy.

Audit and Compliance

Failure to comply with this policy, without providing a good reason for doing so, may lead to disciplinary action.Compliance with this policy is monitored by the Manager Housing Services, through the delegated Area Managers.

Policy Title and Version Rent Setting V2.1Effective Date 18 October 2013Review Date 31 January 2014Document Number P2102/0179-049Replaces Document Number

n/a

Custodian Housing Tasmania, Social and Affordable Housing PolicyApproved by Manager Housing Strategy

This policy may be varied, withdrawn or replaced at any time. Compliance with this directive is mandatory for the Department of Health and Human Services. Please destroy

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printed copies. The electronic version of this Policy is the approved and current version and is located on the Agency’s intranet. Any printed version is uncontrolled and therefore not current.

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