Rental study shows growing gap between working poor and those on benefits

Despite modest increases in rental affordability for people on minimum wages over the last year, the situation remains critical for people on government benefits such as Newstart and the Age Pension.

The 2018 Rental Affordability Snapshot (RAS), from Anglicare Australia found that of 10,490 rental properties on the Perth metropolitan market at the start of April, only a tiny handful were accessible to people at a rate not more than 30 percent of their income.

The report found zero properties accessible to single people on Newstart or Youth Allowance, and just three affordable places for singles over 21 on Disability Support Pension.  

Anglicare WA Chief Executive Ian Carter said with Perth’s median rent being $350 per week, the financial pressure on job seekers, single parents, Aged Pensioners and those on Disability Support Pension was immense.

“If we use the agreed standard that people should not be in a position where more than 30 percent of income is spent on rent, then it is apparent that even in Perth’s current property market many people on low wages and income support are still doing it tough.

“While people in the bottom 20 percent of income earners are certainly able to find rental properties and sign leases, the cost of doing so is well above their modest incomes, which means they have very limited funds left over for food, bills and other essentials,” Mr Carter said.

Mr Carter said the modest increase in wages and salaries over the last year meant that a greater number of working families have found it easier to live within the rental system, whereas pensions and benefits have been flat-lining and have not kept pace with inflation.

“We are seeing a widening in the affordability gap between those on minimum wages and those on benefits, which means life is getting tougher for the unemployed and those on pensions.    

“Over the last year in Australia, minimum wage lifted by $17 per week, compared to Newstart, up $5 per week, and Disability Support Pension up $10.      

“For a couple on minimum wages with two children and Family Tax Benefit A, there were 5,116 affordable metropolitan properties in early April, but for a couple on Newstart with two kids there were just 155.

“Similarly, there were more than a thousand affordable properties for single workers on minimum wage with two children, but only 27 for singles on Parenting Payment with two children, and only 78 for single aged pensioners.”

Mr Carter said the growing gap between the working poor and those on income support was deeply concerning and called on the Federal Government to urgently review levels of income support and affordable housing supply.

“Homelessness is increasing because more people cannot afford a secure place to live, especially in times of crisis. We need to provide enough public and social housing to meet the needs of the more than 100,000 Australians without a home.”

Standard rates of income:

Read full Report here.