Christian Porter (Pearce, Liberal Party, Minister for Social Services) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The Social Services Legislation Amendment (Housing Affordability) Bill 2017 is designed to support the government's housing affordability package as announced in the 2017-18 budget. The bill introduces the framework for what will be known now as a new Automatic Rent Deduction Scheme (ARDS) to enable tenancy charges and other housing costs to be deducted from income support payments and family tax benefit for occupants living in social housing; and making amendments to the National Rental Affordability Scheme Act 2008 (NRAS Act) to support streamlining and simplifying the administration of NRAS until it ceases operation in 2026-27.

Automatic Rent Deduction Scheme

This bill will implement an Automatic Rent Deduction Scheme to help reduce homelessness for social housing tenants who are in serious rental arrears that could, and in many cases does, lead to eviction or housing abandonment.

The new scheme, to be implemented in March 2018, responds to concerns from all levels of government and the community about evictions and homelessness due to rental arrears.

The states and territories have informed the Commonwealth government that in 2013-14 more than 8,900 households living in social housing, including families with children, had more than three weeks of rent in arrears, with more than 2,300 people evicted due to rental arrears. As social housing is generally the most affordable housing option available, it is highly likely that many of these families end up in specialist homelessness services, or staying with family or friends, or, indeed, sleeping rough.

This is undoubtedly a terrible circumstance for the individuals and families involved and of course can lead to long-term homelessness. However it would also contribute to additional and avoidable costs for governments and does put extra pressure on community service providers.

This new scheme will allow rent and utilities that are legally required to be paid under social housing leases to be deducted automatically from an individuals' welfare payments and paid directly to the social housing providers. Other amounts, such as rental arrears or amounts for damages due, will also be able to be deducted from a tenant and all adult household members living in a social housing residence. Social housing providers will work with tenants to help them meet their obligations in a planned and sustainable way.

The Department of Human Services presently administers the voluntary Rent Deduction Scheme, which gives social housing tenants the choice of having their rent and other costs automatically deducted from their payments. This service is used by many social housing tenants. However, as it is presently voluntary in its arrangements, tenants may cancel their deductions—and those tenants often go on to accumulate arrears which put their tenancies at risk.

This scheme will build on the current voluntary Rent Deduction Scheme by ensuring that social housing providers do actually receive rent from tenants and other household members on time, in particular from those who consistently fail to pay. The scheme will work alongside other available supports, to ensure that tenants and other adult household members continue to be housed safely and affordably while they get the help they need to sustain their tenancies.

The Automatic Rent Deduction Scheme will help prevent high levels of arrears being accumulated. It will help reduce evictions and it will help reduce property abandonments from social housing.

The legislation has also benefited from valuable comments made on the bill during a recent exposure draft process, and the government is grateful to the state and territory governments who contributed their views and expertise in this important area and process.

The new scheme will be implemented through amendments to the social security law and the family assistance law, supplemented by legislative instruments on some matters of detail. This will make the scheme more flexible and responsive, while allowing for scrutiny by parliament.

The Automatic Rent Deduction Scheme is a preventative measure designed to stop the accrual of rental arrears, leading to eviction. The policy has been designed to ensure that it will support the tenancy management processes that presently exist in states and territories.

Deductions under the scheme will stop when the person is no longer living in public or community housing covered by a current tenancy agreement.

State and territory housing authorities are best placed to understand the individual circumstances of the tenant because of their tenancy management responsibilities; and therefore will be responsible for reviewing any decisions about tenancy agreements and ensuring their legal obligations are met.

This bill also takes a significant step to ensure a stable rental income stream for social housing providers and will lead to a more efficient social housing system. At the same time it will address the problem of nonpayment of rent which can lead to evictions and homelessness among Australia's social housing tenants, by providing a means by which regular payment of rent can be managed.

National Rental Affordability Scheme

NRAS is administered under the NRAS Act and the National Rental Affordability Scheme Regulations 2008 (the NRAS legislative framework). In 2016, the Australian National Audit Office (ANAO) reported that the NRAS legislative framework, as designed by the previous Labor government, was complex and lacking in clarity. The report noted that:

The Regulations could be reviewed with the aim of simplifying and clarifying aspects of their operation.

NRAS stakeholders have been firmly of the same view. In December 2016, my department consulted with NRAS stakeholders to identify ways to improve the administration of the scheme and reduce the regulatory burden on approved participants. Over 30 submissions were received with a range of suggestions on how the regulations could be streamlined to support the efficient and effective administration of the scheme going forward.

In its submission to the NRAS consultation paper in 2016, the Commonwealth Ombudsman (the Ombudsman) noted the need to improve transparency for investors in the scheme. The Ombudsman's submission also made recommendations on measures to strengthen the integrity and compliance of the scheme.

Review of the scheme

In January 2017, my department commenced a review of the scheme to address the concerns raised by the ANAO, the Ombudsman and NRAS stakeholders.

On 15 July 2017, minor regulatory amendments came into effect to address areas of the scheme that imposed disproportionate penalties for noncompliance which led to outcomes that were inconsistent with the objects of the scheme.

The amendments introduced in this bill clarify what were ambiguous provisions in the NRAS Act and lay the foundation to strengthen and simplify the future operation and administration of the scheme.

Amendments to the NRAS Act

The first amendment provides express legislative authority to transfer an allocation from one approved rental dwelling to another. The ability to substitute dwellings is crucial to achieving the object of the scheme, being to increase the supply of affordable rental dwellings. As investors exit the scheme, the ability to substitute a like-for-like dwelling ensures the level of NRAS housing stock is maintained.

The NRAS Act requires the NRAS Regulations to prescribe maximum vacancy periods for approved rental dwellings. The prescriptive nature of the current vacancy provisions has been amended to allow greater flexibility for the NRAS Regulations to prescribe permitted vacancy periods. This flexibility will assist in the future administration of the scheme should changes be required on how the maximum vacancy periods are to operate.

The NRAS Act requires the NRAS Regulations to prescribe that the rent charged for an approved rental dwelling must be at least 20 per cent less than the market rent 'at all times during the year'. The term 'at all times during the year' has been subject to very conflicting interpretations over time. The amendment in this bill supports the correct interpretation of this provision, which is that each time rent is charged it is to be at least 20 per cent less than the market rent. Some interpret it to mean the total rent charged across the year rather than each time rent is charged.

Two new provisions will be added to the NRAS Act to provide express legislative authority for the NRAS Regulations to vary conditions of allocation and put it beyond doubt that conditions may be varied or imposed after an allocation has been made.

Conclusion

The government is committed to putting in place measures which aim to reduce homelessness for social housing tenants who are in serious rental arrears and to reduce rental costs for low- and moderate-income households. The measures in this bill will support the Housing Affordability Package and contribute to this goal. For these reasons I commend the bill to the House.

Debate adjourned.