Community Housing Rent Calculator



COMMUNITY HOUSING CRA RENT CALCULATOR

USER MANUAL

Produced by

Community and Private Market Housing Directorate

Housing NSW

September 2013

TABLE OF CONTENTS

1 The manual 1

2 Overview 2

3 The calculator worksheet 3

4 Report, summary report and detail report worksheets 8

5 Phase-in (capping) worksheet 10

6 Rent estimation for other families/income units 14

7 Centrelink worksheet 15

8 Other rent calculator tips and policy advice 15

The Manual

The Community Housing Rent Policy sets out Housing NSW’s requirements around rent arrangements that community housing providers need to comply with in NSW. The Rent Policy was revised in July 2008 and updated in July 2010. One of the major policy changes is the full collection of Commonwealth Rent Assistance (CRA) in rent.

The tool designed to assess CRA-based rent is the Community Housing CRA Rent Calculator (the Calculator). This Manual will guide you through the various worksheets used in the calculator and give you tips on data entry and analysis.

The Manual does not explain the Community Housing Rent Policy in detail and if you need more specific information you should refer to the Policy itself. For more information about Australian Government payments/allowances and eligibility for Commonwealth Rent Assistance, you should refer to A Guide to Australian Government Payments published by Centrelink.

This Manual is a useful resource for community housing staff who do rent assessments and/or reviews.

Overview

Rents in community housing are income based. The amount of rent a household pays depends on the income type and age of the people who live there. Rent is also based on the number of families (income units) in the household. However, the total rent charged for the household cannot exceed the market rent for the property.

The Calculator is based on a large number of worksheets. Most of them are hidden as they use formulae and complex calculations that could possibly confuse users if they try to interpret them. The following worksheets are visible and allow the user to simply enter the required information and find out the correct rent for tenants.

|Worksheet |Description |

|Instruction |Explains the contents of the calculator and gives tips on using it. |

|Glossary |Brief description of the terms used in the calculator. |

|Calculator |All the inputs needed to estimate rent must be entered into this worksheet. |

|Report |Gives a brief profile of the household and the rent charged under the current rent policy. The report is in an |

| |easy-to-print format and can be given to tenants. |

|Summary report |The report page is generated from the summary report. As this is not in a printable format please do not try to |

| |print it. |

|Detail report |This gives the rents under the: |

| |1. old rent policy |

| |2. current rent policy (before and after phase-in/capping). |

|CAP |This worksheet explains the phase-in process in estimating rent for existing tenants. ‘Existing’ tenants are |

| |community housing tenants who commenced a tenancy managed by housing associations before 1 July 2008, and a |

| |tenancy managed by housing co-operatives prior to 1 February 2009. All other tenancies are considered ‘new’ |

| |tenancies. |

|Family 1–5 |The information entered in the ‘calculator’ worksheet is automatically used in the respective family/income-unit|

| |worksheets to calculate the rent for each family/income unit. |

|Centrelink |The Commonwealth Rent Assistance (CRA), Family Tax Benefit (FTB) and maintenance income rates used to estimate |

| |rent are given in this worksheet. |

The Calculator-worksheet

This is the data input worksheet in the CRA Rent Calculator. The Calculator is set up to work out rents from various sources of income, such as government payments/allowances and wages. Some information is gathered at the person level and other data at the family/income-unit level.

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The following cells in the Calculator-worksheet must be filled in to calculate the household rent.

Rent effective from: This is the start date for the newly assessed rent.

Step 1: Market rent is the maximum rent payable for each property. To find out market rent, community housing providers should use the latest private rent data (i.e. median rents) which is published quarterly in the Housing NSW Rent and Sales Report.

Step 2: ‘Existing Tenant’ is anyone who already held a community housing tenancy before the revised Community Housing Rent Policy came into effect. Specific provisions apply to existing tenants when assessing their CRA-based rents. They are explained below.

‘New Tenant’ is anyone who starts a tenancy after the revised Community Housing Rent Policy comes into effect for the provider. ‘New Tenant’ also refers to anyone who is transferred from public to community housing.

Step 3: The ‘date when the CRA-based rent policy is first applied’ refers to the date when the revised Rent Policy was applied to an existing tenant for the first time; usually at the first rent review after the revised policy became effective. For example, if you started applying the CRA-based rent policy on 19 September 2008, then this is the date when you first applied the revised Rent Policy. This date marks the anniversary of the phase-in arrangement (this is explained in the section on year two phase-in).You only have to answer this question if you have selected ‘Existing Tenant’ under Step 2. This question is not relevant for new tenants.

Step 4: The ‘Cap Amount’ is usually set at $10 per week and should never exceed this amount. This step shows whether phase-in provisions should apply for existing tenants. Please refer to the phase-in section of this manual for more information. You only have to answer this question if you have selected ‘Existing Tenant’ under Step 2.

Step 5: Answer ‘Yes’ if phasing-in (capping) is no longer required. Answer ‘No’ if phasing-in (capping) has to continue. Please refer to the phase-in section of this Manual for more information. You only have to answer this question if you have selected ‘Existing Tenants’ under Step 2.

Step 6: Shows the number of family groups in the household. It is very important to answer this question correctly because it will determine the CRA amounts that the whole household receives. There can be more than one family group in a household. The calculator is designed to capture information for up to five families/income units in one household (i.e. up to five family groups living in one household). This question must be answered for both new and existing tenants.

Step 7: Information is gathered at the person level for all household members.

The principal tenant (i.e. the tenant holding the lease agreement) should be listed first. The tenant’s partner, if any, should be listed second and then other household members.

When you enter a name and the date of birth, the age field will be populated automatically. It is important that you select the right relationship between the tenant and the other household members.

The Clean Energy Supplement (CES) is paid fortnightly to eligible income support payment recipients from 20 March 2013, FTB-A and FTB-B recipients from 01 July 2013, and is treated as assessable income for rent purposes. For each person in receipt of Clean Energy Supplement, the Supplement is to be shown as a separate income in a separate row in Step 7. CES for all the payments (including CES for FTB-A & FTB-B) is assessed at the person’s usual assessment rate. Please note that CES for FTB-A and FTB-B are not assessed at 15% as for FTB-A & FTB-B payments. Clean Energy supplement for FTB-A and FTB-B should be entered in separate rows in Step 7 and not in step 8.

The ‘care %’ column refers to the shared care percentages where parents are separated and share the care of their children. The care percentage is usually shown on the client’s Income Support Statement from Centrelink.

As soon as child details are entered (i.e. date of birth) the care percentage rate will default to 100%. This rate can be changed to the actual rate under the ‘given’ column, which will then be automatically updated in the effective rate box under the ‘effective’ column.

The care percentage usually affects the amount of Family Tax Benefit and Child Support payments.

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In the income cell you should include any statutory and/or non-statutory income, excluding maintenance, Family Tax Benefit and CRA.

The ‘Rent %’ column refers to the subsidised rate percentage that applies when assessing rent that tenants’ pay from their own income. The rent assessment rate is set at 25%. However, you can change this, if appropriate, to the actual rate under the ‘given’ column (e.g. for some housing programs, rent rate could be set at 30% of income). This will then switch the effective rate under the ‘Effective’ column, as shown in the example below. For more information about rent assessment rates please refer to the Community Housing Rent Policy.

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The last column under Step 7 is the ‘Family Unit No.’ column. This is where you should assign a number against each member of the household depending on their family situation. Usually single people, couples or parents with dependent children form one family unit. In another situation, where a couple shares housing with a grown-up child, who receives a Centrelink payment, the parents should be treated as family unit one and the grown-up child treated as family unit 2. These two family units may each be entitled to receive CRA.

Step 8: Information is captured separately for each family/income unit. Under Step 8 providers collect additional data necessary to assess rent accurately.

a) Firstly, you need to select the correct family type for each family unit. Accurate selection is important because it will determine the amount of CRA to be paid to a particular family unit. Incorrect selection of the family type may result in differences between the CRA that the rent calculator estimates and the actual CRA that Centrelink pays. Please remember that the rent calculator cannot recognise family types automatically. If you are unsure which family type to select for a family unit then please refer to A Guide to Australian Government Payments. This can be downloaded from Department of Human Services’ website at .au.

b) Secondly, the ‘Last Rent’ paid (i.e. the current rent the tenant pays) and the ‘CRA Legislated amount’ on that rent is only needed for family/income units who receive child support payments/maintenance or those who are not getting any income support payments. The legislated amount refers to the amount that the family/income unit is eligible to receive, without any adjustments for deductions or back payments to Centrelink.

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Sometimes the CRA amount entered may be too high for the ‘Last Rent’ that the family/income unit paid. In that case, the ‘No’ message under the ‘Sufficient info provided’ column will appear, as shown in the example next page. In this example, based on $150 rent per week, the tenant is only eligible for $32.73, and not $72.03 CRA.

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When the CRA amount is adjusted to $32.73, the ‘Yes’ message will appear in the ‘Sufficient info provided’ column and the calculation can proceed further.

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There are different reasons why some families/income units receive more CRA than they appear to be entitled to. It could be due to the information declared on the rent certificate when they last claimed CRA.

c) In the ‘Any Income Support Payment’ column you should select ‘Yes’ if the family/income unit receives any payment/allowance paid under the Social Security Act 1991. Usually, most Centrelink payments are paid under this Act, except Family Tax Benefit payments, which are paid under the Family Assistance Act 1999. If the family/income unit does not get any Centrelink payments, but they earn wages from employment, you should select ‘No’.

d) If the family/income unit is eligible for CRA you should select ‘Yes’ under the ‘CRA Eligibility’ column. The calculator will then estimate the amount of CRA Centrelink will pay and include that in the rent. If you select ‘no’ the calculator will exclude CRA from the rent calculation assuming that the family/income unit is not eligible for CRA.

e) Enter Family Tax Benefit A & B legislated (entitled) amounts, if any. You can get this data from Centrelink’s Income Support Statement.

f) Finally, enter the amount of child support received per annum, if any. This information is also in the Income Support Statement. This amount is important because it determines the reduction in Family Tax Benefit and CRA, if required. Under ‘Type’ select ‘Single’ if the child support is paid to a single parent household, or ‘Couple’ if the child support is paid to a couple household. Then enter the number of additional children over and above the first child for whom the child support is received (i.e. if the tenant gets child support for three children then the number of additional children will be ‘2’, or ‘0’ if the tenant receives child support for one child only).

When you have entered all the required information in the calculator page you can go straight to the ‘Report’ page for the rent assessment results.

Report, Summary Report and Detail Report worksheets

Three worksheets are available for presenting the rent and its components in different level of details by family/income units in the household.

The information in the ‘Report’ worksheet includes the tenant and other household member names, assessment rates, weekly incomes and rents based on their individual incomes. These worksheets also include the details of rent calculation for incomes from FTB (A & B), maintenance and CRA.

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The rents for multiple family/income units in a household are listed separately for each family/income unit as shown below.

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The most comprehensive information is given in the ‘Detail Report’ worksheet. This includes rent under the previous rent policy, current rent policy without the phase-in arrangement and current rent policy with the phase-in arrangement.

The ‘Summary Report’ worksheet is a summary of the ‘Detail Report’ worksheet. It only gives information on the effective/applicable rent. The information in the ‘Summary Report’ and the ‘Report’ worksheets is the same. However, the ‘Report’ worksheet is in an easy-to-print format.

Phase-in (CAP) worksheet

Note: Phase-in arrangement applies to existing tenants only and not for new tenants. Refer to Step 3 (page 3) or ‘Glossary’ worksheet of the Calculator.

Phase-in arrangement is implemented to reduce the financial impact of the rent policy changes on existing community housing tenants. The phase-in arrangement ensures that the after-housing income of existing tenants is not reduced by any more than $10 per week per year since the CRA Based Rent Policy is first applied as a result of the rent policy changes.

The phase-in arrangement, however, is not required for tenants where the total household income is going to be reduced by $10 or less per week when the rent changes are first introduced, as CRA is already fully collected in this assessment. Once this happens, providers do not need to reinstate the phase-in process even when the tenant’s financial situation changes in future.

Below is an example where phase-in is not needed because the after-housing income is decreased by $16.18 due to the revised rent policy. The CRA Based Rent policy is first applied for this tenant on 14-Sep-2008 and the maximum allowable amount in the reduction of after housing income on the rent effective data (as at 21-Sep-2013) is $60.00 per week. The $60.00 is derived as follows:

|Date |Maximum weekly allowable amount in the reduction |

| |of after housing income |

|14-Sep-2008 |$10.00 |

|14- Sep-2009 |$20.00 |

|14- Sep-2010 |$30.00 |

|14- Sep-2011 |$40.00 |

|14- Sep-2012 |$50.00 |

|14- Sep-2013 |$60.00 |

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For tenants whose after-housing income is reduced by more than $10 per week per year during rent assessments, the phase-in provisions will continue to apply until CRA is fully collected. This may take up to several years depending on the household structure.

To ensure that phase-in provisions are applied Steps 2 to 5 in the Calculator-worksheet must be answered correctly.

The CAP worksheet in the rent calculator provides detail data to compare rent under both the old and the Revised Rent Policy and any rent adjustments needed where the after-housing income is reduced by more than $10 per week per year since CRA Based Rent Policy is first applied.

In the example below, the calculation shows that the after-housing income for the household is reduced by $65.54 per week, which is more than the maximum allowable amount in the reduction of after housing income of $60 per week. Even though a total household CRA-based rent should be $260.19 per week, the provider cannot charge this rent in year five because the after-housing income is reduced by more than $60 per week. An adjustment to this rent is therefore needed.

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The next diagram shows the rent adjusted to $254.65 per week to ensure that the household’s after-housing income is reduced by $60 per week under the revised Rent Policy. When the capping is entered correctly you will get a message ‘Acceptable’ highlighted in blue.

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The previous example shows that the phase-in arrangement will continue until 19-Sep-2014 and thereafter the tenant will be charged the full amount of $260.19 as assessed provided the household income and structure remains same

Rent assessment – phase-in (capping) in subsequent assessments

The $10 cap in contributions for existing tenants should continue for those tenants where the CRA is not fully captured yet. Phase-in provisions may continue for some years depending largely on the household structure and income situation.

Phase-in arrangements do not apply to new tenants, as CRA should have been fully collected in their first rent assessment. In later rent assessments, as shown below, providers should classify these tenants as ‘Existing Tenants’ under Step 2, and enter ‘Yes’ under Step 5 to show that CRA was fully collected in the previous rent review.

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To ensure accurate assessment of rents providers need to enter the date when the CRA-based rent policy was first applied under Step 3 in the Calculator-worksheet. This is the date of the first rent assessment/review for the specific tenant after the revised Rent Policy comes into effect. The cap amount under Step 4 should always remain at $10 regardless of the year of phase-in.

In year six the $10 per week cap will increase to $60 per week per year in the background calculation. This means that the after-housing income will be reduced by $60 per week when compared to the rent arrangements before the revised Rent Policy.

For example, if CRA-based rent is fully applied, weekly rent would be $260.19 but the tenant’s after-housing income would be reduced by $65.54 ($637.23 minus $571.69). In this instance, the calculator will adjust the rent to ensure that the after-housing income is reduced by no more than $60 per week in the sixth year. Therefore, the weekly rent is adjusted to $254.65. The phase-in arrangement would continue for the next year until CRA is fully collected. However, changes in household income and structure may change over time which could also affect whether phase-in arrangements need to continue.

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Rent estimation for other families/income units

Information needed to estimate rent for other families/income units, aside from the principal tenant, is entered into the respective family worksheets. A similar procedure to that used for the first family/income unit is used to calculate the rent for these families. The rent is worked out under both the previous and current rent policies.

Market rent is used to estimate what the actual rent will be for all the families/income-units in the household. Firstly, the rent for the first family/income unit is deducted from the initial market rent. Then, the remaining amount becomes the market rent for the second family/income unit. Market rent for the third family/income unit is the remainder after deducting the rent for the first and second family/income units from the initial market rent. Market rent for the fourth and fifth families/income units is calculated in the same way.

Family 1–5 worksheets

Family worksheets provide detailed data about the income used and relevant thresholds applied to calculate rent for a particular family group/income unit. These worksheets are included as reference material only and it is not recommended that they be given to tenants.

Centrelink worksheet

The CRA, FTB and maintenance income rates used to estimate rent are given in this worksheet. CRA rates are indexed in March and September each year. The Community and Private Market Housing Directorate in Housing NSW regularly updates the information in this worksheet. You are advised to refer to the most recent version of the CRA Rent Calculator for current CRA rates. When this happens, the updated version of the Calculator will be circulated to all relevant community housing providers.

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Other rent calculator tips and policy advice

New tenants who get child support without previous rental history

For existing tenants and those with a previous rental history (either public housing or private rental), this information may be easy to find. However, where new tenants who receive child support do not have a prior rental history, providers should adopt the following procedure when assessing their CRA-based rent.

Step 1: The tenant’s rent contribution should be assessed based on their income excluding CRA (i.e. 25% income plus 15% FTB). The tenant should then apply for CRA at Centrelink and tell the provider once they have done so. This process will generate a record of the ‘last rent’ received and the ‘CRA amount’ paid on that rent.

Step 2: Once the tenant has applied for CRA and the amount is included on their Income Support Statement, the provider should re-assess the rent as CRA-based rent at 100% CRA collection. The tenant’s rent does not have to be backdated or adjusted.

This process will create the least negative financial impact on tenants.

Sharer provisions

The amount of CRA entitlement is generally based on the level of rent payment and the family situation of the client. Most of the family situations are self explanatory. However, the category of ‘single sharer’ needs further explanation.

Single CRA recipients who share their accommodation with others are only entitled to a maximum rate of CRA that is two-thirds of that for singles living alone.

Sharers’ classification

A sharer is a person who receives a Centrelink payment and must meet the following criteria:

• single

• without dependent children

• not in an exempt category of person or accommodation (see below)

• have a legal right to share a major area (i.e. bathroom, kitchen or bedroom) of their accommodation with others.

Exempt income support recipients

The following groups of income support recipients are NOT affected by sharers’ provisions:

• boarders and lodgers

• Disability Support Pension recipients

• Carer Payment recipients

• recipients in nursing homes

• single parents sharing accommodation ONLY with their recipient children

• singles living in a caravan, boat or mobile home on their own

• people who live in exempt accommodation.

Exempt accommodation

Exempt accommodation is considered to be a:

• boarding house

• guest house

• rooming house

• lodging house

• hostel

• hotel

• private hotel

• similar premises.

More information can be found on the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) website in the Guide to Social Security Law – 3.8.1.110 Sharers Provisions for Rent Assistance.

Department of Veterans’ Affairs recipients and rent assistance

People eligible for a service pension or income support supplement are eligible to receive rent assistance paid through the Department of Veterans’ Affairs. Most service pensioners who pay rent and have dependent children will have their rent assistance paid by the Family Assistance Office as part of their Family Tax Benefit.

People who receive a Special Rate Disability Pension (SRDP) payable under the Military Rehabilitation and Compensation Act 2004 (MRCA) are not eligible for rent assistance.

Disability pensions paid under the Veterans’ Entitlements Act 1986 (VEA) are not counted as income when calculating a person’s service pension and income support supplement. However, those payments can affect the amount of rent assistance payable. Other Department of Veterans’ Affairs payments may directly or indirectly affect the amount of rent assistance received.

People must pay a minimum amount of rent (lower threshold) before they can be paid rent assistance. For every $1 of rent paid above the lower threshold tenants will receive $0.75 of rent assistance, up to a maximum amount.

The amount of rent assistance included when calculating the income support supplement is not reduced by a person’s war widow’s or widower’s pension. However, this pension is included in the income test used to assess the amount of income support supplement they will get. The income test will, in some cases, reduce the amount of rent assistance.

For more information contact the Department of Veteran’s Affairs on 133 254.

Assessing rent for joint tenants

In cases of a joint tenancy, where both people are on the Residential Tenancy Agreement, you should run a separate rent assessment for each tenant. This ensures the process is fair and that they both pay their share of the rent.

You will need to split the market rent between the two tenants. For example, if the total market rent for the property is $300 per week, you will apply $150 market rent for each tenant when running separate rent assessments. Secondly, for existing tenants (if applicable) you should split the cap amount to $5 for each tenant, so that the total after-housing household income does not decrease by more than $10 per week.

The example below shows the rent calculation for tenant one. The same method should be used for tenant two.

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Further support

For further advice on the Community Housing Rent Policy contact John Hyde in the Community and Private Market Housing Directorate at john.hyde@facs..au or on (02) 8753 9547.

For further assistance with rent calculations and questions about the CRA Rent Calculator contact Helen Tighe in the Community and Private Market Housing Directorate at Helen.Tighe@facs..au or on (02) 8753 9004.

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