Thursday, 29 November 2018
Social Services Legislation Amendment (Housing Affordability) Bill 2018; Second Reading
That this bill be now read a second time.
I seek leave to have the second reading speech incorporated in Hansard.
The speech read as follows—
SOCIAL SERVICES LEGISLATION AMENDMENT (HOUSING AFFORDABILITY) BILL 2017
The Social Services Legislation Amendment (Housing Affordability) Bill 2017 contributes to the Australian Government's Comprehensive Plan to Address Housing Affordability, announced in the 2017-18 Budget. This Bill implements the Automatic Rent Deduction Scheme (ARDS). ARDS allows rent and utilities to be deducted from income support payments and Family Tax Benefit for occupants living in social housing. The Bill also makes amendments to the National Rental Affordability Scheme Act 2008 (NRAS Act), to streamline and simplify the administration of the National Rental Affordability Scheme (NRAS) until it ceases operation in 2026-27.
Automatic Rent Deduction Scheme
Australians living in social housing who get behind in their rent, including families with children, can face eviction.
Social housing is often the most affordable housing option available for many Australian families. If evicted, these families can find themselves in crisis. Some become dependent on friends and family for a bed and roof over their heads.
ARDS is scheduled to start from 1 January 2019 and will reduce the risk of Others may turn to homelessness services, and if they cannot find an alternative in time, in some cases they might sleep rough.
homelessness. It will also improve the financial sustainability of the social housing system and will support greater investment in social housing.
The current voluntary Rent Deduction Scheme allows social housing tenants to have rent and other costs automatically deducted from their payments. However, as it is voluntary, tenants can cancel their deductions at any time and those tenants often go on to build up rental arrears, increasing their risk of eviction.
We have been working with the states and territories to come up with a new system that addresses these matters.
ARDS will build on the current voluntary Rent Deduction Scheme by ensuring that social housing providers receive rent from tenants and other household members on time, in particular from those who consistently fail to pay. It will work alongside other available supports, to ensure that tenants and their families continue to be housed safely and affordably while they get the help they need to sustain their tenancies.
ARDS will help prevent high levels of arrears and reduce evictions and property abandonments from social housing. By helping more people to maintain their home, less pressure will be placed on other crisis services, including homelessness and child protection services, freeing up resources to help other vulnerable people.
The Bill will also be a significant step towards ensuring a stable rental income for social housing providers and will lead to a more efficient social housing system.
State and territory housing authorities are best placed to understand the individual circumstances of their tenants. Therefore, they will keep responsibility for all aspects of tenancy management, including decisions about tenancy agreements.
The former Minister for Social Services, the Hon Christian Porter MP, introduced the Bill in the House of Representatives on 14 September 2017.
On 19 October 2017, the Senate referred the Bill to the Community Affairs Legislation Committee (the Committee) for inquiry and report. The Committee recommended that the Bill be passed but raised some issues for further consideration.
The Government considered the Committee's findings in consultation with participating states and territories, and has introduced amendments to the Bill in response.
Amendments to ARDS
The Government's amendments to ARDS provide additional protections for welfare recipients.
The amendments introduce a new precondition —the relevant State or Territory Minister must write to the Commonwealth Minister for Families and Social Services setting out the social housing policies of the State or Territory, in order for an authority or body in that jurisdiction to be able to use ARDS. This will include information on how their policies apply limits to the amount that tenants can be charged. These letters may be published to ensure transparency and provide assurance that tenants will be protected from financial hardship.
The Government has also made amendments to further reduce the risk of tenants facing financial hardship. ARDS will now be restricted to rent and household utilities. In addition, any arrears incurred due to the suspension of an income support payment cannot be deducted from a single payment, when the payment recommences.
The amendments also clarify how ARDS interacts with income management and the cashless debit card. Social housing tenants who are on income management or the cashless debit card will only have ARDS deducted from the income managed or restricted portion of their payments.
Other amendments provide flexibility about the form of agreements between tenants and social housing providers for ARDS, and clarify that ARDS is available to community housing providers that are registered under a law of a state or
territory. These amendments better align ARDS with state and territory policies and procedures and respond to state and territory concerns.
National Rental Affordability Scheme
Amendments to the NRAS Act
The Government's amendments clarify and expand the power to make regulations under the NRAS Act, by removing any doubt that the NRAS Regulations can provide for protections and rights for investors in NRAS, and for the tenants of NRAS rental properties. The amendments will allow the making of regulations that will require approved participants to pass on annual State and Territory contributions to investors within a reasonable time.
The amendments also clarify and expand the power to make regulations about the transfer of allocations from one rental property to another rental property, the imposition of additional conditions and changing conditions on existing allocations, and the transfer of allocations to another approved participant.
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 expression 'at all times during the year' has been subject to different interpretations over the years, including a view that the requirement is satisfied if the rent charged over the course of a year is at least 20 per cent less than the market rent. This amendment confirms the intended interpretation, which is that each time rent is charged, it is to be at least 20 per cent less than the market rent. There may be circumstances where a specific charge for rent is higher than permitted because of a mistake.
The amendments to the NRAS Act will permit the NRAS Regulations to provide for the Secretary of the Department of Social Services to have a power of dispensation for a breach of the requirement in a specific instance, where it is established that the excessive charge for rent occurred because of inadvertence and the tenant has been fully compensated for the error.
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 NRAS should changes be required on how the maximum vacancy periods are to operate.
The Commonwealth relies on a number of heads of legislative power under the Constitution to support the NRAS Act. The amendments set out these Constitutional powers and give the NRAS Act operation within the scope of these powers.
While most of the approved participants in NRAS behave appropriately in relation to investors, a small number of approved participants do not treat investors fairly. Examples of poor behaviour include delays in passing on incentives to investors, and the provision of misleading communications to investors. The amendments will allow the Secretary of the Department of Social Services to accept and then, if necessary, enforce a voluntary enforceable undertaking from an approved participant. This compliance tool will assist the Department of Social Services to modify the behaviour of some approved participants. In some cases, accepting an enforceable undertaking may be a
more appropriate compliance response than transferring or revoking an allocation.
There will be no further new allocations in NRAS. The amendments to the NRAS Act will allow the NRAS Regulations to be simplified by the removal of provisions relating to the issue of new allocations.
The Government is committed to putting in place measures to reduce the risk of homelessness for social housing tenants, and to reduce rental costs for low and moderate-income households. This Bill will assist people living in social housing to maintain their tenancies, and lays the foundation for improving the NRAS legislative framework to support the efficient administration of NRAS.