Government support, for thousands of low-income renters, is meant to ease pressure as rent climbs. But new research suggests that for many, cash assistance alone is not preventing housing stress, falling behind on rent or being forced to move.
A study led by Curtin University has found that low-income renters living in social housing experience far greater stability than those relying on Commonwealth Rent Assistance or receiving no support at all. The research analysed long-term data from 2001 to 2020, tracking housing outcomes for low-income renters in Australia and the United Kingdom.
Lead author Dr Jack Hewton said the findings showed Commonwealth Rent Assistance, in its current form, is not adequately protecting renters from housing stress or rent arrears in an increasingly expensive private rental market.
“The findings from the paper highlight that Commonwealth Rent Assistance in its current design is not adequately protecting low-income renters from housing stress and rent arrears,” Dr Hewton said.
While there is no single moment when rent assistance became less effective, Dr Hewton said concerns about its adequacy have been raised for decades. He pointed to the Henry Tax Review in 2010, which called for rent assistance rates to be substantially increased and linked to movements in market rents.
A key difference identified by the research is how rents are set in social housing. Dr Hewton said social housing rents are generally capped at about 25 to 30 percent of a household’s income, allowing rental costs to rise or fall as circumstances change.
“When social housing rents are linked to income, it allows the costs to adjust with a household’s circumstances,” he said. “If income increases or decreases, rental costs adjust as well, which offers stronger protection during financial shocks.”
The study found this income-based model provides more reliable protection than cash payments delivered into the private rental market, where rising rents can quickly absorb the value of assistance without improving stability.
Dr Hewton said while increasing rent assistance can be implemented more quickly than expanding social housing supply, social housing remains critical because it directly limits rents to an affordable share of income.
“We shouldn’t completely discount Commonwealth Rent Assistance because it can be deployed quicker,” he said. “But if improvements were made to better protect recipients from housing stress and rent arrears, then we could see better outcomes.”
Without a stronger focus on social housing, the risks are clear. Dr Hewton continuing to prioritise cash assistance over long-term housing investment could see growing numbers of low-income renters facing housing stress, falling behind on rent and being forced to relocate.
The research also challenges a common assumption in housing debates. Dr Hewton said housing supply is limited, increases in cash assistance do not necessarily improve affordability.
“If there isn’t enough supply in a housing market, any increase in the value of cash payments can be absorbed by rent increases,” he said.
Responding to the findings, a spokesperson for the Department of Housing and Works said the State Government was aware of the housing pressures facing many Western Australians and was focused on boosting supply.
“Since 2021, the State Government has committed a record $6.3 billion towards housing related initiatives, delivering 3,800 social homes with thousands more social and affordable homes in the pipeline,” the spokesperson said.
The study adds to growing evidence that while rent assistance plays a role, social housing remains a critical safeguard against housing insecurity for low-income renters.
