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Rent Choice Policy

Last published 12 Sep 2018

1. Background

Rent Choice is a form of Private Rental Assistance (PRA) that supports households to access safe and affordable housing in the private rental market. It provides a time limited private rental subsidy for up to 3 years and facilitates access to support services, including training and employment opportunities, to build capacity for independent living.

The following Rent Choice products may be offered to eligible clients:

Rent Choice supports access to safe and affordable housing in the private rental market to eligible clients who are able to demonstrate a capacity to sustain their tenancy in private rental accommodation.

In addition to Rent Choice assistance, the Department of Family and Community Services (FACS) can also offer or facilitate access to Rentstart assistance products to assist with costs to establish and maintain a tenancy in the private rental market through the provision of a Bond Loan, Advance Rent, assistance to pay rental arrears, or Temporary Accommodation for homeless people. For more information, go to the Rentstart Assistance Policy.

2. Scope

This policy applies to all applicants who may be eligible for a Rent Choice product. Clients must have the capacity to afford private rental accommodation at the end of the subsidy period.

Under Housing Pathways, participating community housing providers may facilitate access to private rental assistance products.

3. Policy statement

Rent Choice provides medium term financial assistance for up to three years for low to moderate income households, to enable them to secure and sustain a tenancy in the private rental market. The program assists clients to access support services, including training and employment opportunities, to build capacity to continue living independently after the Rent Choice assistance ends. It ensures that clients are supported in their transition to sustainable independence. The client must express a commitment to sustaining a tenancy while receiving the subsidy and to transitioning to independent living. The client must be willing to receive and continue with support services where relevant.

Clients that receive a Rent Choice Youth, Rent Choice Veterans or Rent Choice Start Safely that are approved to receive a deeper subsidy, are required to have an Independence Support Plan (ISP). The ISP is a person-centred approach to coordinating ‘wrap-around’ services to support the client to build their capability to transition to housing independence at the end of the subsidy period.

The ISP is completed by both the client and either FACS, or the client’s support provider. If the client is in receipt of Rent Choice Youth, the ISP will need to be endorsed by the Partner Facilitation Group. The ISP aims to assist the client to develop realistic goals, and identify the appropriate support to achieve these goals. Effective support planning is critical for managing the provision of support services as well as the broader training and employment opportunities.

Clients do not have to apply for, or be listed on the NSW Housing Register. Clients who are listed on the NSW Housing Register will have their Housing Register status changed to ‘suspended’ from the time they start receiving a Rent Choice product until they exit. Rent Choice is not intended for clients who require long-term housing assistance and who have long term support needs. Social housing may be the most suitable housing option for those clients.

Rent Choice can be used in conjunction with other private rental assistance products including, Bond Loan, Advance Rent or Tenancy Guarantee. For more information, go to the Private Rental Assistance Policy.

Rent Choice clients will be eligible to receive Advance Rent if they qualify for the product under Rentstart guidelines. If Advance Rent is provided, the client’s subsidy will commence from the date that the Advance Rent ceases to cover; either one or two weeks after the lease commencement date.

Property affordability and calculating a subsidy

Rent Choice clients are expected to find a property within their affordability. This ensures that clients have the capacity to afford private rental accommodation at the end of the subsidy period. When calculating affordability, FACS calculates the combined total of 50% of the gross household weekly income plus 100% Commonwealth Rent Assistance (CRA) that the client is eligible to receive.

Clients who receive Rent Choice are entitled to receive Commonwealth Rent Assistance (CRA) as they are renting in the private sector and are not public housing tenants. When assessing the household income for rental affordability, FACS will presume that a client is receiving CRA even if they have not applied to Centrelink for assistance.

A Rent Choice subsidy makes up the difference between the amount the client pays and the market rent. For the first 12 months, Rent Choice subsidises the difference between the market rent and 25% of the recipient’s gross assessable income plus 100% of their CRA entitlement.

Clients receiving a Rent Choice product are required to have their subsidy assistance tapered. Subsidy Tapering prepares clients to pay full market rent through a gradual reduction in subsidy assistance. By gradually reducing the subsidy amount, the amount of rent a client pays gradually increases. This supports the client to build capacity over time, to be able to sustain private rental tenancies at market rents and become financially independent.

Tapering of the client’s rent will generally commence on the 12 month anniversary of the first subsidy payment. The subsidy amount will then be gradually reduced at six monthly intervals. Each time a taper step is due, FACS will divide the current subsidy by the expected number of taper steps:
Taper amount = Current subsidy / number of expected taper steps left.
The client’s rent is increased by the taper amount calculated.

Reviewing Rent Choice

A review is conducted every three months to determine continued eligibility and need for the subsidy, assess whether the client is managing their tenancy effectively, check whether appropriate support services are in place, and monitor client progress against agreed goals.

FACS calls this a Quarterly Review.

When a client informs FACS of any changes to their household or household income, FACS will reassess the subsidy to ensure that the household is paying the correct amount of rent and is still entitled to receive a Rent Choice Subsidy.

The key stages where tapering adjustments are implemented are at six monthly intervals – at the end of 12 months, 18 months, 24 months, 30 months and then at the end of the subsidy period of 36 months. These adjustments will be discussed and confirmed with the client at the Quarterly Reviews three months prior, where the client’s readiness for tapering will be assessed - at 9 months, 15 months, 21 months, 27 months and 33 months.

If the decision is made not to commence tapering of the client’s subsidy, the client will be reviewed again for tapering at the next quarterly review. If the client is unable to commence tapering following a subsequent quarterly review they may need to be assessed for an alternate product.

Exceptions where Subsidy Tapering can be applied at a reduced rate

In circumstances where the tapering of a subsidy may impact negatively on a client’s capacity to sustain a tenancy, a reduced rate of tapering may be applied. FACS may provide approval for a reduced taper rate if the client can demonstrate (but is not limited to) that:

  • reducing their subsidy could negatively impact their ability to manage while they are completing qualifications
  • they are experiencing financial stress as a result of medical treatment for themselves or a household member
  • they have incurred extensive funeral costs
  • they are experiencing financial difficulties as a result of court proceedings.

Eligibility criteria for Subsidy Tapering prior 1 November 2016

Clients who received either a Start Safely Private Rental Subsidy or Youth Private Rental Subsidy prior to 1 November 2016 will be exempt from Subsidy Tapering. However, existing clients that received either a Start Safely Private Rental Subsidy or Youth Private Rental Subsidy may opt to have tapering applied to their subsidy.

Changes in circumstances

A Rent Choice client must advise FACS within 28 days of any changes in:

  • household members;
  • household income;
  • rent;
  • property address; and
  • landlord or real estate agent.

If a Rent Choice client does not inform FACS about changes to their household or household income, the household may be provided with an incorrect subsidy amount. In some cases, this may result in the client owing money to FACS or their subsidy being ended.

A client must also advise FACS if they are moving to another property as this may affect the approval of their subsidy or the amount of their subsidy, including the rate of their subsidy taper.

Paying a Rent Choice subsidy

FACS will pay a Rent Choice subsidy from:

  • the date on which the client’s application was approved, if the client is remaining in their existing property, or
  • the date when the client’s lease begins.
  • If Advance Rent is provided, the client’s subsidy will commence from the date that the Advance Rent ceases to cover; either one or two weeks after the lease commencement date.

FACS pays the subsidy directly to the landlord/agent, with payment generally being one month in advance.

FACS will end a Rent Choice Subsidy when a client has undergone a review and a decision to exit Rent Choice has been made or when the maximum period of 36 months has been reached.

Rent Choice Products

3.1 Rent Choice Start Safely

Rent Choice Start Safely applies to clients escaping domestic or family violence who are homeless or at risk of homelessness and are eligible for social housing.

Start Safely clients with a moderate income may be eligible to receive a Start Safely subsidy if they have been identified as being at serious threat and referred through a Safety Action Meeting (SAM). The SAMs are regular meetings of local service providers that aim to prevent or lessen serious threats to the safety of domestic violence victims and their children through targeted information sharing. Members share information to develop tailored, time-specific Safety Action Plans for victims at serious threat and their children.

In locations where a SAM is not yet available, FACS Private Rental Specialists can also directly assess and recommend moderate income clients for Start Safely. They must include in their assessment the reasons why the client is at serious threat of domestic and family violence. As indicated above, this can be demonstrated where local police, courts or services have assessed the client using the Domestic Violence Safety Assessment Tool, or there is equivalent evidence.

In high cost locations, clients may be eligible to receive a deeper subsidy if their ISP includes a strategy for increasing their income by the time they are ready to exit Rent Choice. A deeper subsidy allows the client to find a property with a higher market rent than the standard affordable rent set by FACS. For more information, go to Maximum affordability limits for deeper subsidy by bedroom category table.

Rent Choice Start Safely clients will be eligible to receive Brokerage Funds to assist them with costs relating to establishing and maintaining their tenancy. For more information on Brokerage Funds, go to Private Rental Assistance Policy.

Eligibility for Rent Choice Start Safely

To be eligible for Rent Choice Start Safely, clients must:

  • be eligible for social housing* (for more information, go to the Eligibility for Social Housing Policy);
  • be escaping domestic or family violence;
  • be homeless or at risk of homelessness; and
  • express commitment to sustaining a tenancy while receiving Rent Choice and to sustaining their independence after Rent Choice ends
  • commit to engaging with the review process and working toward meeting support plan goals
  • be willing to receive and continue with support services where relevant.

* Income eligibility for moderate income households is defined in the NSW Affordable Housing Ministerial Guidelines

Evidence requirements

Rent Choice Start Safely clients must provide suitable documentary evidence to:

Clients must also provide proof of income for all members of the household aged 18 years and over. For more information, go to Proof of income and assets.

3.2 Rent Choice Youth

Rent Choice Youth applies to clients between the ages 16 and 24 years who:

  • are capable of living independently;
  • are homeless or at risk of homelessness;
  • are eligible for social housing; and
  • have the capacity and intention to engage in employment, education or training.

The client must be able to sustain a tenancy while receiving a subsidy and be financially independent after the subsidy ceases. The client must be engaged with a Partner Facilitation Group (PFG). The PFG will represent the client and ensure that the client maintains engagement with support providers.

If the client is less than 18 years of age, they are required to agree to have the lease agreement explained and witnessed by a Tenants Advice and Advocacy Service, solicitor or Legal representative. They cannot participate in the program without this occurring.

Rent Choice Youth clients are required to undertake a Rent It Keep It course, ideally prior to approval for Rent Choice or within 3 months of being approved for the subsidy, or provide evidence that they have completed Rent It Keep It (all 12 modules) in the previous 6 months. These courses are run regularly by a number of agencies in NSW. For more information, go to the Rent it, Keep it factsheet.

Rent Choice Youth is currently available in the Central Coast, Hunter New England, Murrumbidgee, Nepean Blue Mountains, South Eastern Sydney, Western NSW, Northern NSW, Western Sydney, South Western Sydney and Southern NSW Districts.

In high cost locations, clients may be eligible to receive a deeper subsidy if their support plan includes a strategy for increasing their income by the time they are ready to exit Rent Choice. A deeper subsidy allows the client to find a property with a higher market rent than the standard affordable rent set by FACS. For more information, go to Maximum affordability limits for deeper subsidy by bedroom category table.

Rent Choice Youth clients will be eligible to receive Brokerage Funds to assist them in establishing and maintaining their tenancy and/or to cover relevant or study related costs. For more information on Brokerage Funds, go to Private Rental Assistance Policy.

Eligibility Rent Choice Youth

To be eligible for Rent Choice Youth, clients must:

  • be aged between 16 and 24 years of age;
  • be eligible for social housing;
  • be able to live independently with appropriate support in place;
  • be homeless or at risk of homelessness;
  • be engaged with a support service that has been approved by the Partnership Facilitation Group; and
  • be willing to engage in training, education, or employment during the period of the subsidy.

Evidence requirements

Rent Choice Youth clients, through their support providers, must provide suitable documentary evidence to:

Youth Share

Youth Share allows Rent Choice Youth clients who do not know each other to share suitable accommodation. To be eligible for Youth Share, the clients need to be matched and recommended by their support providers and approved by the Partnership Facilitation Group (PFG).

Youth Share Subsidy involves the provision of a Bond Grant for the property rather than a Bond Loan, recognising that young people may be ready to exit the Youth Share program at different times. The Bond Grant provides stability for the remaining client. At the commencement of a shared tenancy, a Bond Grant will be paid by FACS directly to the Rental Bond Board for each share client. If there is a change in the household, the lease will be updated with the name of the new client. There is no change to the bond arrangement, as the existing bond is retained by the Rental Bond Board. At the end of the tenancy, the bond will be returned to FACS by the Rental Bond Board.

Youth Share helps house young people in areas where rental costs are not affordable for a single person receiving a youth allowance. Youth Share is available wherever Rent Choice Youth is offered.

For a property to be suitable, the property should be close to transport, be in a safe area, and accessible to educational, employment and/or training facilities. For more information, go to the Social Housing Eligibility and Allocations Policy Supplement.

Eligibility criteria for Youth Share

To be eligible for Youth Share clients must:

  • be aged between 18 and 24 years of age;
  • be eligible for social housing;
  • be able to live independently with appropriate support in place;
  • be homeless or at risk of homelessness;
  • be willing to engage with their support provider;
  • be engaged with a PFG support service;
  • be willing to engage in training; education; or employment during the period of the subsidy;
  • be willing to share housing; and
  • have low to medium support needs.

3.3 Rent Choice Veterans

Rent Choice Veterans applies to former members of the permanent Australian Defence Force (ADF) who are homeless or at risk of homelessness, and who have been on active service during wartime and/or in an operational area, including peacekeeping operations after 1 August 1990. It aims to build the client’s capability and competency to sustain a tenancy and achieve independence in the private rental market.

Rent Choice Veterans households do not have to be eligible for social housing to apply, though social housing eligible households may also be eligible for the Program. For more information on the maximum moderate household income limit, go to the Moderate income limits table.

In high cost locations, clients may be eligible to receive a deeper subsidy if they can demonstrate the capacity to afford the higher rent at the end of their subsidy period. A deeper subsidy allows the client to find a property that is higher than the standard affordable rent set by FACS. For more information, go to Maximum affordability limits for deeper subsidy by bedroom category table.

Rent Choice Veterans clients may be eligible to receive Brokerage Funds to assist them with costs associated with establishing and maintaining a tenancy. For more information on Brokerage Funds, go to Private Rental Assistance Policy.

Eligibility for Rent Choice Veterans

To be eligible for Rent Choice Veterans, clients are not required to be eligible for social housing. To be eligible for Rent Choice Veterans, the client must:

  • be a resident in New South Wales;
  • be a citizen or have permanent residency in Australia;
  • be at least 18 years of age;
  • be homeless or at risk of homelessness;
  • be within the moderate household income limit;
  • not own any assets/property that can be used to resolve their housing need; and
  • have low to medium support needs; and
  • be a former member of the permanent ADF – naval, military, or air force who has been on active service during wartime and/or in an operational area, including peacekeeping operations after 1 August 1990.

Evidence requirements

Rent Choice clients must provide suitable documentary evidence to:

  • support that they are homeless or at risk of homelessness;
  • have an Independence Support Plan completed with DefenceCare; and
  • have a referral from DefenceCare supporting their eligibility

Reviewing Rent Choice Veterans

FACS will forward the quarterly reviews to DefenceCare who will complete the review on the clients’ behalf. DefenceCare is responsible for conducting the review and submitting the Review Form with a recommendation to extend or end the Rent Choice subsidy to FACS.

4. Deeper subsidy

A deeper subsidy may be available for eligible Rent Choice clients that require accommodation in high cost locations. Clients may be eligible to receive a deeper subsidy if they can demonstrate the capacity to afford the higher rent at the end of their subsidy period. This will be outlined in the client’s ISP. A deeper subsidy allows the client to find a property with a higher market rent than the standard affordable rent set by FACS.

Locations where a deeper subsidy is available

Deeper subsidy is available in the following FACS districts:

South Eastern Sydney, Northern Sydney, Sydney, Western Sydney, South Western Sydney, Central Coast, Nepean Blue Mountains, Illawarra Shoalhaven, Mid North Coast, Northern NSW and Hunter New England.

Maximum affordability limits for deeper subsidy by bedroom category

FACS will consider the following maximum affordability limits in the following districts:

Districts Maximum affordability limits for a deeper subsidy by bedroom category
  1 Bedroom 2 Bedroom 3 Bedroom
South Eastern Sydney $350 $450 $550
Northern Sydney $350 $450 $550
Sydney $350 $450 $550
Western Sydney $350 $450 N/A
South Western Sydney $350 $450 N/A
Central Coast $300 $450 N/A
Nepean Blue Mountains $300 $450 N/A
Illawarra Shoalhaven $300 $450 N/A
Mid North Coast $300 $450 N/A
Northern NSW $300 $450 N/A
Hunter New England $300 $450 N/A
Murrumbidgee N/A N/A N/A
Southern NSW N/A N/A N/A
Western NSW N/A N/A N/A
Far West N/A N/A N/A

Based on FACS Rent and Sales report data based on Rents disclosed on Rental Bond Lodgement Forms lodged with BSU Rental Bonds, NSW Fair Trading. Median, 25th percentile rent and new bond count by FACS District and dwelling type, September 2016 quarter - to be updated twice a year.

The weekly rent amount listed can replace the client's current affordability limit as the maximum weekly rent allowable.

A client's bedroom entitlement determines the size of the property and therefore maximum amount of deeper subsidy.

5. Moderate income

Moderate income limits for Start Safely and Rent Choice Veterans

Moderate income clients who are identified as being at serious threat of domestic and family violence (DFV), are at risk of homelessness and are referred to a Safety Action Meeting (SAM) may be eligible for Start Safely. Safety Action Meetings do not operate in every area. In areas where there is no Safety Action Meeting, clients will still be eligible for the program if they are at serious threat of domestic and family violence.

Veterans with moderate incomes may be eligible for Rent Choice Veterans. Rent Choice Veterans applicants do not have to be eligible for social housing to apply, though social housing eligible households may also be eligible for the Program.

Moderate Income Limits (July 2017):

SYDNEY – gross income

REST of NSW – gross income

Household members

Weekly

Annual

Household members

Weekly

Annual

Single adult

$1,169

$60,800

Single adult

$1,033

$53,700

Each additional adult (18 years or over)

+ $585

+$30,400

Each additional adult (18 years or over)

+ $517

+ $26,900

Each additional child under 18

+ $350

+$18,200

Each additional child under 18

+ $310

+ $16,100

Disability allowance per person

(N/A)

(N/A)

Disability allowance per person

(N/A)

(N/A)

Exceptional disability allowance per person

(N/A)

(N/A)

Exceptional disability allowance per person

(N/A)

(N/A)

Source: NSW Affordable Housing Ministerial Guidelines 2017-18 – updated annually

Calculating moderate income limits
Household composition: Number of adults + Number of children

Example 1: Sydney household - 2 adults + 3 children
Weekly limit: 2 adults ($1,169 + $585) + 3 children (350 x 3) = $2804
Annual limit: 2 adults ($60,800 + $30,400) + 3 children ($18,200 x 3) = $145,800

Example 2: Rest of NSW household – 1 adult + 2 children
Weekly limit: 1 adult ($1,033) + 2 children ($310 x 2) = $1,653
Annual limit: 1 adult ($53,700) + 2 children ($16,100 x 2) = $85,900

6. Legislation and compliance

FACS is able to provide private rental assistance products in accordance with the Housing Act 2001.

7. Related documentation

8. Further information

Appeals and review of decisions

If a client disagrees with a decision FACS has made, they should first discuss their concerns with the staff member that made the decision. The next step, if they still believe that FACS made the wrong decision, is to ask for a formal review of the decision.

For information on how reviews work for decisions made by FACS, the client can ask for a copy of the fact sheet Appeals and reviewing decisions, or read the Client Service Delivery and Appeals Policy.

FACS decisions that cannot be appealed:

Decisions to end a Rent Choice Subsidy when the client has been given the maximum 36 months assistance cannot be appealed.

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