4. During the tenancy
4.1. Standard Terms
A Housing ACT tenancy is subject to the same Standard Terms of the RTA as all ACT tenancies. These terms regulate the rights and obligations of lessor and tenant in respect of quiet enjoyment, including the care, repair and maintenance of the premises, payment of rent, inspection, and how and when the tenancy may be terminated. In this chapter discussion will focus on those aspects of tenancy which are particular to public housing.
Additional terms may be added to the Standard Terms but if an additional term is inconsistent with the Standard Terms, the inclusion of the term must be endorsed by the ACAT through a joint application by lessor and tenant. An example of an endorsed term that may be sought by Housing ACT is a requirement that the tenant make payments towards a past debt. Ordinarily, section 15 of the RTA provides that only rent and bond shall be consideration for granting a tenancy, but section 15 (5) allows the housing commissioner to require payment of an outstanding amount from a previous tenancy, provided this term is endorsed by the ACAT under section 10 of the Act.
While ACAT may refuse to endorse a particular inconsistent term, in practice endorsement is done in chambers, not by hearing, and there may be little examination of whether the term is unreasonably onerous or whether the debt to be repaid has been proven.
A Housing ACT Tenancy Agreement incorporates an attachment called “Housing Commissioner’s Additional Terms”. Some of these terms may be inconsistent with the Standard Terms and, if they are not endorsed terms, they may not be valid.
4.2. Calculation of rent
The rent for every Housing ACT rental property is set on the basis of “market rent” which is periodically reassessed (generally once a year). Most tenants do not pay market or “full” rent because they have an entitlement to rebated rent. Under the rent rebate system, rent is generally based on 25% of household income, irrespective of the size or quality of the dwelling itself. For example, the market rent may be $360 per week but for a tenant whose sole income is a Centrelink benefit of $540 per fortnight, or $270 per week, the rent payable will be $67.50 per week. Tenants generally pay rent fortnightly. Many Housing ACT tenants elect to pay rent by way of Centrelink direct deduction so that there is an automatic and regular pattern of correct payment on the tenant’s fortnightly payday.
Clearly for tenants on such a low-income rebated rent is essential for survival in the current rental market. For other tenants – for example, a family which includes 2 adults in employment – 25% of household income may equal or be greater than the market rent in which case no rebate is payable. An obvious but important benefit of the rent rebate system for tenants is that a decrease in income generally results in a decrease in rent.
What is income for the purposes of rent rebate?
Income is defined in clause 11 of the Program in terms that largely mirror the definition in social security law: essentially “personal earnings, valuable consideration, profits or any other amounts … earned, derived, received or become entitled to …”. Some classes of income are, however, exempt for the purposes of eligibility for housing assistance and rent calculation and these are set out in a Housing Assistance Public Rental Housing Assistance Program (Exempt Income and Assets Determination 2012 (No 1). They include Carer Allowance, Pensioner Education Supplement, Large Family Supplement, Family Tax Benefit Part B, and Youth Allowance payable at the single, at-home rate to residents in the premises who have no other form of income.
Conditions of rent rebate
The conditions of rent rebate are set out in clauses 25 and 26 of the Program. Rebate is usually granted for a period of 6 months (though in some cases the period is 12 months). In order to conduct a rebate assessment Housing ACT generally requires the completion of a Rebate Application form and a statement of income for the preceding 26 weeks. For tenants whose sole income is Centrelink benefits, it is sufficient to provide an authority for Housing ACT to obtain an income statement directly from Centrelink.
The rebate ceases at the expiry of the designated period unless the requisite information is provided and a new grant of rebate is approved. If the rebate expires or is cancelled, market rent is charged to the tenant’s account and in many cases rent arrears accrue as a result. The housing commissioner has the power to backdate a grant of rebate in certain circumstances, allowing market rent charges to be replaced by rebated rent charges where, for example, a tenant has failed to apply for rebate by the due date because of illness. Conversely the commissioner has the power to disallow a grant of rebate where, for example, a tenant fails to declare a source of income for a period.
In addition, entitlement to rebate ceases where a tenant sublets the premises, stops living there or is absent without the consent of the commissioner, or is absent for more than 3 months. The commissioner has a discretion to consider the circumstances of each case.
Changes in household composition or income
Tenants are required to notify Housing ACT when an additional resident and/or income comes into the household. Providing the tenant notifies at the time of an increase in income (for example, a pay rise) Housing ACT’s policy is to allow the current rebate to run its term before factoring the increase into the rent calculation. If, however, the tenant experiences a significant reduction in income during the rebate period, an immediate reassessment can be done to prevent financial hardship. Where an additional resident brings an income into the household or an existing resident gains an income, the policy is to reassess the rebate with effect from the date of that change.
Visitor or resident?
As for private tenants, Housing ACT tenants have a right of quiet enjoyment and exclusive use of their homes, including the right to have guests. At the point at which a guest becomes a resident, that person’s income affects the tenant’s rebate entitlement and Housing ACT must be notified. In considering whether a person is a visitor, Housing ACT will consider whether they normally reside at another address and the reason for their stay. Under Housing ACT policy, persons on Newstart Allowance seeking work and persons waiting for other accommodation are not regarded as visitors. According to Housing ACT policy, where a person is accepted as a visitor ‘a period of grace’ of 4 weeks which can be extended to 6 weeks is allowed before they are regarded as members of the household and tenants have to declare their income on the rental rebate application.
Gaining employment after a period of unemployment
Where a tenant gains employment after a period of unemployment, the existing rebate is extended for a further 6 months from the date the employment started. This policy takes account of the additional expenses of commencing employment.
There is a minimum rent charge of $5 per week even in circumstances where a tenant has no income. If the loss of income is the result of incarceration or entering a residential rehabilitation or mental health facility for an extended period, rebate is generally approved for the payment of minimum rent for a period of up to 6 months. There is a discretion to extend the grant of rebate on this basis in certain circumstances.
Not claiming Centrelink
Where a tenant chooses not to claim Centrelink benefits and has either no income or an income less than the relevant Centrelink benefit, Housing ACT is enabled by clause 11 (3) of the Program to deem the tenant to be in receipt of the relevant Centrelink income on the basis that this income is reasonably available to the tenant. The rebated rent is then 25% of the deemed income.
4.3. Market rent increases
The law governing market rent increases is covered by the RTA. 8 weeks’ notice of a rent increase must be given in writing and rent increases may not be at intervals of less than 12 months. There is, however, specific provision in the Act allowing Housing ACT to do a rent review in a new tenancy within less than 12 months, in order that Housing ACT may conduct rent review of all its properties at the same time each year. Reviews generally result in an increase in the market rent. This may not affect most tenants who are in receipt of a rebate, and for some tenants the increase will mean that they now have a small rebate entitlement.
Seeking review of rent increase
A tenant who is affected by a market rent increase, or may be in the future, and believes the increase is excessive may write to Housing ACT advising why the increase is excessive and asking that it be lowered or withdrawn. If there is no satisfactory response, the tenant may apply to ACAT to have the increase reviewed. If the tenant wants to retain this option, they must lodge an application with ACAT at least 14 days before the rent income is due to come into effect. There are some special circumstances where ACAT will accept applications up until the day before the increase is due to come into effect but a tenant shouldn’t count on this. ACAT does not have the power to hear an application disputing a rent increase once the rent increase has come into effect.
ACAT may disallow part or all the increase if they find it to be excessive based on a formula provided under Section 68 of the RTA. If the increase is more than 20% greater than the relevant increase in the Consumer Price Index, as it relates to housing in the ACT, Housing ACT must satisfy ACT that the increase is justified. If the increase is less than 20% but the tenant believes it is excessive, the onus is on the tenant to satisfy ACAT of this.
Under section 68 of the RTA, in deciding whether an increase is excessive, ACAT will consider:
- The rent before the proposed increase;
- Whether it has been increased previously, the amount of that increase, and the period since that increase;
- Housing ACT costs in relation to the dwelling;
- Services provided by Housing ACT to the tenant;
- The value of fixtures and goods supplied as part of the tenancy;
- The state of repair of the dwelling;
- Rental rates for comparable dwellings;
- The value of any work performed or improvements made by the tenant with Housing ACT’s consent; and
- Any other matter that ACAT considers relevant.
In considering these matters, no one factor carries more weight than another. The weight to be attached to each factor may vary depending on the circumstances of each case.
Whilst in the past, Housing ACT’s market rents have been somewhat below the level of rents commanded in the private rental market, in recent years substantial rent increases have been introduced on most properties. A good deal of Housing ACT’s stock is quite old and deteriorating. A Housing ACT tenant may be of the view that the condition of the dwelling does not justify the rent increase sought. Maintenance and repair of Housing ACT properties has long been a bone of contention.
4.4. Tenancy Breakdown
“Tenancy breakdown” is the term given at clause 19 of the Program to the circumstances in which a tenant is no longer living at the dwelling but 1 or more occupants remain in the dwelling. The circumstances include where the tenant dies, is physically or legally unable to occupy the dwelling or wishes to give up the tenancy in order to live elsewhere. In such circumstances Housing ACT may transfer the tenancy to the remaining occupant(s). The exercise of this discretionary power is set out in the Housing Assistance Public Rental Housing Assistance Program (Exceptions and Miscellaneous Matters – tenancy breakdown) Operation Guideline 2008 (No 1) and will depend on a number of factors, including the length of time the dwelling has been the occupant’s home. In general Housing ACT will be reluctant to grant tenancy of the dwelling to the remaining occupant(s) if the size of the dwelling is beyond the entitlement of the occupant(s). In those circumstances, “some other available dwelling” may be provided to the remaining occupant(s).
This chapter contains general information available at time of publication. It does not constitute legal advice. If you have a specific legal problem, please contact Canberra Community Law on (02) 6218 7900.
Canberra Community Law is entirely independent of Housing ACT. All assistance is free.