AHURI BRIEF

Why are young people receiving CRA experiencing Housing Affordability Stress?

57.4 per cent of young people aged 24 years or under receiving CRA are in housing affordability stress

Last updated 7 Mar 2019

The 2019 Productivity Commission report into Government Services reveals that young people who are receiving CRA are more likely to be in housing affordability stress (HAS) than any other age or special needs group. Indeed, 57.4 per cent of young people aged 24 years or under receiving CRA are in housing affordability stress, compared to 27.4 per cent of people aged 75 years or older receiving CRA who are in housing affordability stress.

To receive CRA, an income unit (that is, a person or couple living in a privately rented dwelling) must receive a form of welfare benefit, either Newstart , Disability Support Pension (DSP) , Age pension or Austudy/Youth Allowance ; or receive a Family Tax Benefit payment.

Table 1: Percentage of income units receiving CRA in Housing Affordability Stress (HAS) by age group in comparison with income units receiving the Disability Support Pension.

Category Total income units Income units in HAS % of income units in HAS

Disability Support Pension

258,811

79,325

30.6%

Aged 75 years and over

136,314

37,379

27.4%

Aged 24 years or under

122,416

70,298

57.4%

Source: Productivity Commission Part G sector 2019 Table GA 13 and Table GA 11

That there is a high proportion of young people (aged 16 to 24 years) getting CRA who are in HAS is likely to be a reflection of the lower Newstart and Youth Allowance benefit payments compared to the age or disability support pensions.

In February 2019 a single person on Newstart received $550.20 per fortnight ($275.10 per week), a single person on Youth Allowance living away from home received $455.20 per fortnight ($227.60 per week), while a single person on the age pension or disability support pension (if aged over 21) received a maximum of $916.30 per fortnight ($458.15 per week).

The reality is younger CRA recipients on Newstart or Youth Allowance would struggle to find a property they could afford to rent without going in to HAS.

Table 2: Welfare payment for a single person (no children) (Feb 2019)

Payment type Per fortnight payment Maximum CRA per fortnight Total welfare benefit Maximum weekly rent payable before going into HAS

Newstart

$550.20 ($275.10 p.w.)

$135.80 ($67.90 p.w.)

$686

($343 p.w.)

$102.90 per week

Youth Allowance (living away from home)

$455.20 ($227.60 p.w.)

$135.80 ($67.90 p.w.)

$591 ($295.50 p.w.)

$88.65 per week

Age pension

$916.30 ($458.15 p.w.)

$135.80 ($67.90 p.w.)

$1052.10 ($526.05 p.w.)

$157.81 per week

Disability support pension (aged over 21)

$916.30 ($458.15 p.w.)

$135.80 ($67.90 p.w.)

$1052.10 ($526.05 p.w.)

$157.81 per week