As young people leaving state care are particularly vulnerable to becoming homeless, a Rent Subsidy Scheme could help them with rent during this transitional period. Through the Scheme, all young people leaving state care would pay no more than 25 per cent of their income for their housing up to the age of 25. The Scheme could work in conjunction with Commonwealth Rent Assistance if the young person is eligible for that payment.

The Scheme would give young people more reasonable accommodation choices and help them to avoid poor quality accommodation that, due to affordability or availability issues, is far from educational and employment opportunities.

A 2008 research survey found that 42 per cent of 1689 people who had experienced homelessness before the age of 18 had previously been in the state care and protection system. Such findings suggest that the government, as the corporate parent, often fails in its duties to young people as they leave state care and try to manage moving into independent accommodation, leaving school, trying to find work or other means of support and becoming independent. 

The cost of failing to help young people after they leave state care is significant. If they become homeless their costs to government are estimated at around $12,000 per year per young person, or around $738,700 over a lifetime (in $2010) if they reach the average Australian life expectancy. These costs are associated with people who experience homelessness having poorer physical health and reporting higher rates of substance abuse problems when compared to their peers.

A rough estimate of the cost of running a Rent Subsidy Schemes is presented.

  Single person, with no children, aged 18 to 21 years Single person, with no children, aged 22 to 25 years
Youth allowance income per week (at October 2022) $265.15 per week
(paid as $530.40 per fortnight)
$316.65 per week
(paid as $633.30 per fortnight)
Maximum weekly rent to be paid—being 25% of income $66.29 per week $79.17 per week
Rent per week of 1 bedroom flat $454 per week
(October 2022$)
$454 per week
(October 2022$)
Weekly cost of Rent Subsidy Schemes benefit $454 – $66.29
= $387.71 per week
$454 – $79.17
= $374.83 per week
Annual cost of Rent Subsidy Schemes benefit $20,160 per year $19,491 per year


This Brief incorporates material previously published in AHURI’s Policy Issues Analysis series.