At some wages within the moderate income band, single
parents can lose 100 per cent of additional money earned in what the author of
the report says is a huge disincentive to work.
The report, Reshaping Public Housing and Work Disincentives,
by the Tenants Union of NSW, illustrates how changes in the public housing
system interact with changes in the Commonwealth social security system and the
tax system to discourage public housing tenants from earning much extra money.
When tenants get jobs and enter the moderate income band,
social security payments decrease and rents rise, meaning there is little net
financial incentive to find work, the report says.
Single tenants and single-parent tenants who get a job can
expect to lose more than 70 per cent of all wages earned in excess of $125 per
week, the report says.
The changes are part of a NSW Government policy Reshaping
Public Housing, which was introduced last year and targets housing for those
most in need. The report’s author, Chris Martin, said the further changes in
July will result in any tenants who moved into public housing from last July
losing their accommodation once their income reaches certain thresholds. Single
people have to move out once they earn $688 per week and single parents with
two children must move out once their income reaches $919 per week.
Kerry Cole lives in public housing in Riverwood and says the
changes will discourage many tenants from looking for work. This is because
they will not risk the certainty of a roof overhead by developing a skill, and
then taking a job with a wage that could disqualify them for public housing.
But with a new qualification in counselling, and plans to
start a business of her own, she is not worried that the changes will eat up
her future income or force her to rent privately. “My goal is to move
forward and I have done the hard yards,” she said. “To me, housing
was only ever going to be a stepping stone. I don’t want to be a long-term
stayer.”
A spokeswoman for the Housing Minister, Cherie Burton,
denied the policy was a disincentive. “The whole point of the policy is to
encourage people … who have the ability to earn higher incomes to get out of
housing,” she said.
The problem was not that tenants had to pay more rent as
their incomes went up, but that the tax system was too harsh on low- and
middle-income earners.
But Mr Martin said NSW could not blame the Commonwealth for
the fact that a tenant on a moderate income loses nearly all the benefit from
working more. `The largest single contributor to effective tax rates at these
wages is the Department of Housing.”
❑ The State Government will redirect $420
million into increasing public housing for the elderly by2800 homes over
five years.
The Premier, Morris lemma, said yesterday: “Over the
next decade the demand for social housing for older people will grow by around
36 per cent.”
He said there had been a huge demographic shift in demand
for public housing. In the 1970s more than 70 per cent of applicants were
couples with children; last year it was 11 percent.
His spokesman said the funds would come from
“reprioritising” the public housing budget.
Much of the new housing will be in areas with ageing
populations, such as the North Coast, Central
Coast and western Sydney. A further $75 million will be spent
on modifying homes.
Photo: Public housing a steppingstone… Kerry Cole with two
of her children, Amanda,10, and Daniel, 8, at home In Riverwood. Photo: Robert
Pearce