POLICY ISSUE ANALYSIS

Supporting older lower income tenants in the private rental sector

What is the policy issue?

Retired lower income households living in the private rental sector (PRS) face rent increases and insecure tenure while being on low fixed incomes (i.e. the age pension). They also live in housing that may not be physically suitable for them and may require alterations to make the premises liveable (e.g. wider door openings to allow for wheelchairs, height adjustable kitchen benches etc.).

The policy options presented here focus on assisting older, lower income tenants. AHURI's policy issue analysis—Getting the best from the private rental sector for lower income households is a useful companion piece, and includes policy development options for the abolishment of 'no ground' evictions.

In 2015–16, the ABS estimates there were around 102,600 ... lower income households aged 65 or more who were renting in the private rental market

Why are older renters different from other renters?

The housing situation for older lower income renters differs from younger lower income renters in that they have finished their working life (and usually have low levels of wealth), they have very limited incomes (i.e. the age pension) and they lack future earnings potential. In addition, with changing modern family dynamics, older householders may still be looking after other family members, including the 21.6 per cent of children aged from 0 to 12 years (864,500 children) who relied on a grandparent (who may or may not be a PRS tenant) for some of their care in 2017.

As tenants get older they may be less able to cope psychologically with stress and changes; may be suffering from physical disability and mental health concerns; may be frail and vulnerable; and can suffer from being isolated.

Finding housing solutions that are secure, affordable and appropriate to older renters is the key to keeping those tenants in their home and not being dependent on residential aged care.

Key fact

Policy makers need to consider how these older renters can live in safe, secure, appropriate and affordable housing. There is also an economic benefit for government in keeping people in their homes for as long as possible. AHURI research shows that the most expensive place for older Australians to live is in residential aged care. In 2005 the average annual cost to government of a person in residential aged care was $33,610 (2005 dollar value), compared with $6,918 for in-home formal care and $3,808 for in-home informal care for an older person who stays in their home. These in-home costs include government assisting with home modifications and providing health care professionals who may help older people showering, getting dressed, with cooking and other daily tasks.

How many are affected?

In 2015–16, the ABS estimates, there were 132,800 couple only or single person households aged 65 or more who were renting in the private rental market and of these, around 102,600 were couple only or single person lower income households (i.e. earning in the bottom 40 per cent of Australia’s income distribution).

Across Australia, older lower income households who are in the private rental market paid on average (median) between $210 (singles) and $250 (couples) per week in rent.

For couples relying on the age pension ($684.10 per week in May 2018)  this median average rent is above the maximum rent of $224.28 per week they would pay before suffering housing affordability stress (being 30% of a couple’s combined income of the $684.10 per week age pension plus full Commonwealth Rent Assistance of $63.50 per week). For singles the situation is equally poor, with the $210 average rent being greater than the housing affordability stress threshold of $156.36 (being 30% of age pension $453.80 per week plus full CRA $67.40 per week rent).

To put these Australia-wide average rents (which include metropolitan, regional and rural lower income households) into further perspective, in September 2017 the average price for a one bedroom apartment in metropolitan Melbourne was $360 per week, $420 per week for a 2 bedroom flat and $425 per week for a 2 bedroom house.

Policy development options

These policy options are focussed on solutions for older, lower income tenants to increase the availability, accessibility and quality of appropriate, secure tenancy dwellings that they can afford to rent in neighbourhoods they are familiar with (i.e. so they are not socially isolated) and are close to essential amenities like medical facilities.

1. Explanatory statement

Currently CRA is paid to an eligible ‘income unit’, which may be a household made up of a couple or an individual.

In the case of a household made up of a couple who both receive the age pension, if one partner dies (or leaves the relationship) the amount of age pension the surviving householder receives is effectively halved. However the amount of CRA that the householder can receive is unchanged (i.e. the ‘economic unit’ is unchanged), meaning the person staying in the property has to continue to pay the same amount of rent as previously while receiving the same amount of CRA as previously but only have income from one age pension. As a result, rental costs take up a significantly greater proportion of that individual’s income.

Research identifies that the ‘most vulnerable in this respect are divorced and separated women with children – because they are understandably reluctant to move – and widows (again, typically women) because they often suffer abrupt falls in income.’

2. A real world example

CRA could be restructured along the same lines as Housing Benefit in the UK, where there is a separate income test so that when a person suffers an abrupt reduction in income, Housing Benefit automatically increases up to a maximum of 100 per cent of the rent.

There are concerns such a reform will add to work disincentives because, when income increases, a simultaneous withdrawal of housing assistance on top of withdrawals of other income support programs, as well as income tax, may occur. However, for older tenants who are beyond retirement age these disincentives are of less concern, and therefore a separate income test for the over-65s would raise fewer concerns of this kind.

Such changes would be better targeted at older CRA recipients as they do not have an earnings profile to pay rising rents. The income tests can also be made sensitive to household type, so that they offer proportionately more support to singles in view of the greater hardship faced by singles as they cannot benefit from the economies of scale in consumption that couples can.

3. Scope of the practice

In June 2017 around 1,343,000 income units received CRA, of whom 20.1 per cent (around 270,000 units) were older tenants (of both social and private rental sector housing) who received the age pension. As CRA cost the Australian Government $4.39 billion in 2016–17, this cohort of older tenants received an estimated $884 million.

4. Effectiveness/impact

The full costs of such a reform to the Government require detailed modelling and decisions on the parameters defining income tests.

5. Guide to evidence

AHURI research provides evidence on increasing Commonwealth Rent Assistance for older tenants.


1. Explanatory statement

Private rental brokerage programs (PRBPs) work with vulnerable households to access and sustain private rental tenancies. They do this through targeted early intervention assistance (e.g. advice, information, introductions and timely support) designed to build tenancy capacity and through building links with the local private rental industry.  The programs are intended to help these vulnerable households compete successfully for rental properties in a competitive market and sustain their tenancies over the longer term.

PRBPs are delivered by both government and non-government agencies. They are supplied in some jurisdictions through formal programs under that title, and in other jurisdictions are an activity within agencies’ broader housing support functions under a variety of names.

While these programs are not specifically targeted at older tenants, they can help older tenants who may have recently left home ownership (due to divorce or domestic family violence) or have previously been in insecure housing and who therefore have no track record in the private rental market.

2. A real world example

Housing SA delivers a comprehensive formalised PRBP known as the Private Rental Liaison Officer Program. The Program provides intensive one-on-one assistance for people having difficulty with the processes of obtaining and maintaining private rental housing, and is delivered by designated Private Rental Liaison Officers (PRLOs), with one PRLO based within each of Housing SA's regional offices.

3. Scope of the practice

PRBPs are found across Australia's system of housing supports, with funding provided directly by state government departments. In addition to the SA program, these include the RentConnect service in Queensland, the Private Rental Brokerage Service in NSW, and the government/community partnerships underpinning Housing Connect in Tasmania and the Housing Establishment Fund in Victoria.

Examples of PRBPs exist that have a much looser relationship with government, with responsibility for the design, delivery and administration of their services driven by their parent organisation, usually in the charity sector. Such programs are funded in a variety of ways from sources including charities, philanthropic funds and agency cross-subsidisation.

4. Effectiveness/impact

The Housing SA Private Rental Liaison Program has provided in the order of 1,350 to 2,000 people with information about obtaining accommodation each year for the last few years, with around 550 to 750 people assisted into the private rental market, although there is no breakdown as to the number of older tenants who have benefited.

AHURI research shows that it was essential for PRLOs to:

  • build trust with the agents who might be able to help
  • build relationships based on honesty
  • not recommend clients whose needs were so complex they were unlikely to succeed as a private rental tenant.

Reputation and rapport were key, with a PRLO’s reputation as honest and reliable in their recommendation and support of clients proving to be fundamental to a successful practice.

AHURI research identified that Australian providers of PRBPs believe the programs ‘are not appropriate for clients with high and complex needs; many restricted eligibility for their services to ‘rental ready’ clients and those needing only low level support once housed.’

Difficulties arose for PRBP staff when the chances of establishing an ongoing relationship with any particular real estate agency were low because clients were spread across large geographic areas. Some PRBP staff saw another challenge in the high turnover among property managers.

Very few PRBPs reported working directly with private landlords due to:

  • difficulty reaching this group
  • no economies of scale (most landlords having only one or two properties)
  • concerns relating to sub-standard properties
  • problems with security and safety
  • no Centrepay facilities (making it harder to manage the risk of rent default and thus tenancy failure)
  • (sometimes) no landlord insurance, which compromised the agency’s own policies and procedures.
5. Guide to evidence

AHURI research provides evidence on private rental support programs for vulnerable people.


1. Explanatory statement

In head leasing, a housing agency (which could be a not-for-profit, for-profit or a government organisation) leases a property from a property owner and then on-leases the property to the tenant. The housing agency is responsible for making sure the landlord is paid rent on time, that the property is treated with care and that leases, legalities and repairs are negotiated fairly with the landlord.

In turn, the tenant is responsible to the housing agency for paying rent on time and looking after the property. The tenant may pay a reduced rent if the housing agency has agreed to subsidise the tenant’s rent for some or all of the lease period. Other benefits for low-income tenants are that housing agencies use tenant selection criteria sympathetic to tenants who rely on government benefits, have health issues, do not have a positive history of renting or may suffer discrimination in the mainstream market. The housing agency may provide some level of services to the tenant such as health or education services.

If the landlord chooses not to renew a lease, the housing agency may also support the older tenant in finding and moving to a new dwelling. The benefits for landlords are that they are guaranteed rent payments in full and on time; any damage to their properties caused by tenants will be repaired by the housing agency; and they don’t have to find (and manage) new tenants or suffer financial loss from having properties being empty for any period of time.

2. A real world example

A number of head leasing programs operate in Australia, although not necessarily aimed at older households.

In the Northern Territory, not-for-profit provider Venture Housing has 10 head-leased Seniors’ units at Parap. Tenants must meet specific requirements set by the Department of Housing and Community Development (Territory Housing).

Independent Melbourne based community organisation, Launch Housing, has developed a Head Lease Program that houses 70 clients in 62 private rentals in 2016–17.

In response to the Royal Commission into Family Violence, the Victorian Government developed a Rapid Housing Assistance Fund-Family Violence program in 2016 to fund housing for women and families fleeing domestic violence, including funding head leasing arrangements for people at risk or experiencing homelessness and impacted by family violence.

3. Scope of the practice

There is no collated data for the number of older tenant head leasing programs in Australia.

4. Effectiveness/impact

There is no available evaluation of head leases programs for older tenants. Nevertheless, AHURI research shows that while head leasing arrangements established by community housing providers can provide accommodation, they also transfer a risk of debt and property damage to the head-leasing agency.  This carries a degree of financial risk to the CHP which they may not be able afford to underwrite.

5. Guide to evidence

AHURI research provides evidence on private rental support programs and housing assistance for vulnerable people.


1. Explanatory statement

Modifying dwellings to enable older residents to live more independently means people stay in their homes longer and saves government money in not having to supply greater numbers of beds in supported age care establishments. However, for older people who do not own their dwellings such modifications are only possible with permission from landlords, and usually properties must be returned to their previous state when the tenancy ends. If the older tenant then has to move into another private rental dwelling they will have to pay for modifications (and repairs) again. This would be the case each time they are required to move into a new property.

2. A real world example

The Commonwealth Home Support Programme (CHSP) began on 1 July 2016. It provides entry-level home support for older people who need assistance to keep living independently at home and in their community.

The CHSP will support older people or people aged 50 years and over, who are on a low-income and who are homeless or at risk of homelessness as a result of experiencing housing stress or not having secure accommodation, through the provision of assistance with accessing care and housing.

The CHSP is designed to provide relatively small amounts of a single service or a few services for frail, older people to the degree that this service (or services) is sufficient in maintaining independent community living and wellbeing. The CHSP is also intended for situations where householders need higher intensity services for a short time where improvements in the householder’s function or capacity can be expected or where intensive services will prevent the householder deteriorating further.

The program can provide aged householders with simple modifications to their home, like hand rails or ramps. It will provide modifications for people living in private rental accommodation but must get permission from the landlord before any modifications are done. The CHSP doesn’t cover cost of changing back any modifications made to a dwelling after a tenant moves out. However, tenants can make a new request to the CHSP for assistance every time they move into a new rental property.

In the UK a Disabled Facilities Grant (DFG) can enable a wide range of adaptations that enable an older person to live in their home more easily. The DFG is available to both home owners and tenants. It is administered and paid by the local council’s housing department for work that the local council has assessed is needed. The assessment is undertaken by either a Council-based full care needs assement or an Occupational Therapist.

If the property is privately rented, the property owner or managing agent must provide written consent for any DFG modifications. In addition, the applicant must certify that the disabled person will be living in the property for at least five years after the work has been completed, unless they are unable to due to health problems. This can prove difficult for private tenants who may have an assured shorthold tenancy for only six months.


If the landlord allows the modification on the proviso that the property be returned to its original state at the end of the lease the DFG may make a payment to the landlord to cover these (future) costs. The UK Disability Discrimination Act means that landlords are less able to withhold consent for making changes that help an older disabled person rent the property, unless the tenancy agreement specifically prevents alterations to the property.

Furthermore, there are UK organisations that keep lists of properties that have already been adapted for people with disabilities that may be available for rent if the local housing authority does not agree to a DFG for a tenant.

In addition, around 200 Home Improvement Agencies (HIAs) operate in the UK.  These not-for-profit organisations help older, disabled or low-income owner-occupiers or tenants of private rented accommodation to repair, improve or adapt their homes (often through the DFG, but not necessarily) so that it is safe and comfortable for them to remain in their home.

3. Scope of the program

There is no readily available collated data for the number of older tenants requesting and receiving housing modification support through the CHSP.

The DFG has operated for the 25 years to 2018.  The grant is means-tested (but not age specific) and in England, up to £30,000 is available (2018–19); in Northern Ireland, up to £25,000 is available; in Scotland, the sum is discretionary, depending on the local council; and in Wales, up to £36,000 is available.

4. Effectiveness of the program

There is no published evaluation of the CHSP. The introduction of a listing of private rental properties that have already been adapted and are available for rent (as in the UK for DFG properties) could increase the economic benefits for governments in funding modifications and also give professional landlords access to an ongoing stream of tenants who need housing that incorporates such modifications.

In its 25 years of operation to 2018 the DFG has helped over 40,000 people stay living in their community in a more accessible home.

Evaluation of the DFG in 2005 showed it produced significant health gains and prevented accidents and admission to residential care. However, the evaluations also showed a number of challenges including:

  • the maximum grant limit of the DFG was not sufficient in most areas to provide the adaptations most likely to be needed by those who are most seriously disabled (this resulted in the grant being increased to £30,000 in 2018–19)
  • the uncertain arrangements for funding adaptations above the limit mean most seriously disabled people are most likely to be left in need or to wait the longest
  • older people entitled to adaptations were being screened out by some social services authorities through inappropriate use of guidelines
  • in 2003–4, 47 per cent of all housing authorities had insufficient capital to meet valid DFG applications and the median shortfall was 44 per cent of the annual spend
  • there are inequalities between tenures. Private tenants are in a weak position; tenants of housing associations suffer from divided responsibility; council tenants cannot share in the DFG ring-fenced allocation
  • information to service users and potential service users is mostly extremely poor, for fear of discovering need that cannot be met.

Further evaluation of the DFG in 2011 revealed ‘the total amount required to cover grants for all of those who are theoretically eligible under the current rules is £1.9bn at 2005 prices. This is more than ten times higher than the total amount of disabled facilities grant allocated in England in 2009–10 (£157m).’

5. Guide to evidence

AHURI research provides evidence on private rental support programs and housing assistance for vulnerable people.


1. Explanatory statement

For older tenants who are struggling in the private rental sector, options for forms of structured shared living arrangements may be viable.

A range of housing types specifically target older people and offer a mix of services and/or support in some type of village or communal living arrangement, including:

  1. Not-for-profit ‘rental retirement complexes’ – independent living within a village or apartment type complex
  2. Private sector ‘assisted-living villages’ – independent housing in a village complex with meals provided in a central dining room and on-site live-in managers
  3. Abbeyfield housing – small-scale bed/sitting rooms with live-in housekeepers and meals provided in a group living situation.
2. A real world example

The Abbeyfield Society is an international charitable organisation providing a model of supportive group housing and companionship to disadvantaged older people. Residents must be able to manage their own personal care needs.

Abbeyfield housing offers unfurnished bed-sit style housing in a small communal living environment. The housing is universally designed and purpose-built. Residents prepare their own breakfast, and lunch and dinner are provided. The complex contains communal dining, living and laundry facilities as well as an outdoor recreational area. There is a guest room, a storeroom and a two-bedroom self-contained unit attached to the complex for the cook/housekeeper. Tenants organise a range of social activities in-house. The housing is managed by a local voluntary committee. A voluntary coordinator oversees the day to day management of the complex.

Residents pay rent of 70 per cent of the basic age pension plus full rent assistance (i.e. CRA). This covers the majority of household expenses including meals, electricity, property maintenance, heating & cooling, rates and employment of the Housekeeper. Residents must pay for any personal items (such as clothing, toiletries, telephone, insurance of personal belongings etc.).

AHURI research shows residents see Abbeyfield as affordable and good value for money given the rental was less than that of privately owned assisted-living villages. The housing reflects community engagement and cross-sectoral partnerships and residents certainly felt that they were part of the local community. In these respects, this form of housing seems to be well suited to small towns.

The disadvantages reported were primarily with communal living arrangements. Problems arose from differing points of view between residents, the limitations in choices of food, and the regimentation and routines of mealtimes.

Nevertheless, Abbeyfield housing was valued by residents as a small scale, purpose-built housing form.

3. Scope of the practice

In 2018 there are 26 independent Abbeyfield Societies in towns and suburb across Australia, with all Abbeyfield accommodation (houses and hostels) operating on a ‘not-for-profit basis by local communities as a local solution to a local housing need’.

4. Effectiveness/impact

AHURI research identified that people in assisted-living villages (particularly those run by for-profit organisations that charge up to 85 per cent of age pension plus CRA as rent) with limited financial resources will have difficulty saving to move out of the villages, should they need (or want) to do so while they are paying a very high proportion of their income in rent.

Options to improve this form of housing for older, lower income tenants include the supply of private/public partnership private sector ‘assisted-living villages’—i.e. independent housing in a village complex with meals provided in a central dining room and on-site live-in managers—that require an ongoing government subsidy so that each older tenant only pays a maximum of 30 per cent of the age pension plus 100 per cent of CRA.

5. Guide to evidence

AHURI research provides evidence on assisted living village for older tenants.


Background to the policy issue

Life course changes associated with older age such as widowhood, disability and frailty suggest a need for a range of rental housing options.  These include a private rental sector that can support older tenants living in the general community, as well as options such as communal self-contained living spaces that provide some level of companionship, practical support and assistance with daily living, through to facilities that combine health care, personal care and accommodation.

An effective way to house vulnerable older tenants ... would be to increase the number of subsidised social housing dwellings


Housing policy options need to consider that there are four types of older renters: some are long-term tenants; others are forced through adverse circumstances into rental housing (i.e. divorce, bereavement, financial circumstances); others choose / can afford to move into age-specific rental housing (e.g. resort style age housing); and some are marginally attached to housing (i.e. experiencing homelessness). Housing provision must respond to this diversity of experience and preference.

An effective way to house vulnerable older tenants who are living in the private rental sector would be to increase the number of subsidised social housing dwellings—that is either public housing or community housing—through increased government funding to expand supply and to subsidise ongoing costs. However, in a constrained government funding environment, policy can focus on encouraging landlords in the private market to provide a housing service that is both affordable and appropriate to lower income older tenants.

AHURI research in progress

A number of AHURI Research Inquiries and and Research Projects were initiated to investigate ways that may benefit older tenants by improving the private rental sector or increasing the supply of social housing:

Research Inquiries

Research Projects

Relevant AHURI research

The following AHURI research contributes evidence to the debate on this policy issue: