Policy Last Amended: 31 January 2014
Housing NSW creates a Bond Loan account for clients who receive a Bond Loan, and manages this account throughout the duration of the Bond Loan. Clients are required to make regular fortnightly Bond Loan payments into the account as they become due.
The intent of this policy is to explain how Housing NSW manages Bond Loan accounts.
This policy applies to clients paying a Rentstart Bond Loan.
3. Policy statement
Housing NSW is able to recover Rentstart Bond Loan payments in accordance with the Terms and Conditions of the Rentstart Bond Loan Agreement.
Housing NSW will allow a client to have up to two Bond Loan debts at any time. Clients with two Bond Loan debts are not eligible for a third Bond Loan assistance.
Under the Bond Loan Agreement clients are required to make fortnightly payments to Housing NSW until the Bond Loan is paid in full. If a client does not make payments, their account will fall into arrears. This will result in a breach of the Bond Loan Agreement. Housing NSW will take action to recover any non-payment relating to the Bond Loan Agreement.
Clients are responsible for notifying Housing NSW immediately if they are unable to make their payments. Housing NSW will discuss alternative payment options which may include changes to the payment plan, changes to the fortnightly repayment amount, information about financial counselling or other services, or in extreme circumstances, deferral of payments for a short period.
Clients with a former Bond Loan debt must pay all money owing on the account. Housing NSW may decide to refer former Bond Loan debts to a mercantile agent for collection, suspend further Rentstart assistance, or pursue legal action if clients do not make payments. Housing NSW will refund any credit amounts at the end of the agreement.
Housing NSW will act quickly to ensure account related charges are paid on time, and to help prevent a debt from escalating.
Housing NSW will contact clients in writing if their Bond Loan account falls into arrears. Additionally, Housing NSW may also contact clients by phone, SMS or email.
Rentstart Bond Loan payment methods
Clients can pay their Rentstart Bond Loan by any of the following methods:
- Arranging an automatic payment from their Centrelink payments
- Paying at an Australia Post office using a payment card
1. Bond Loan Deduction Scheme
Clients and other household members who receive a pension or allowance from Centrelink can arrange to have their Rentstart Bond Loan payments made automatically. Clients need to complete an Authority for Bond Loan Deduction (PDF, 147KB) form to authorise automatic payments.
Where Housing NSW varies the payment amount, it will tell Centrelink to debit the new amount.
2. Paying at Australia Post
All clients receive a payment card, regardless of how they choose to make payments. Clients can make payments at any Australia Post office with this card. Housing NSW provides a new payment card if a client returns for a second Bond Loan.
All banks provide BPAY and clients will need to sign up to financial institution internet or phone banking before they proceed. The biller code for Housing NSW is 203570. The reference number is the payment reference number of the account the client is paying.
Through BPAY, clients can set up periodic payments, such as fortnightly Bond Loan payments.
If a client disputes a BPAY payment, they will need to contact their financial institution to resolve the matter.
Clients can pay online through the Housing NSW website. By selecting the ‘Payments options’ button, then ‘Pay now’, clients will be taken to a secure website facility where they can allocate specific payments for each account. Clients can make payments using their payment reference number and can pay using any type of bank or credit union account.
If a client disputes an online payment, for example, if they have paid their fortnightly Bond Loan payment but it does not appear on their account, they need to contact their Client Service Officer.
5. Changing payment methods
Clients can change their payment method at any time, provided they ensure that they pay their Rentstart Bond Loan according to their payment plan.
Managing current Rentstart Bond Loan accounts in arrears
Clients are expected to enter in to a repayment arrangement to make up any missed payments in addition to their regular fortnightly payments. Housing NSW will consider a client’s circumstances and their capacity to maintain loan payments at their current level when setting arrears repayment arrangements. Housing NSW will aim to negotiate a repayment arrangement that sees the arrears paid as quickly as possible without causing undue financial hardship to the client. In general, Housing NSW will ask for a minimum arrears payment of $10 per fortnight.
In managing the recovery of arrears, Housing NSW will consider:
- The client's payment patterns.
- The amount of the debt.
- The reason for the arrears.
- The client's capacity and willingness to pay the arrears.
- Whether the client requires support services or a referral to another organisation to assist them in managing either their finances or other aspects of their life that impact on their ability to pay their Bond Loan payments.
- Previous arrears patterns, including the steps that have been taken to resolve the problem.
- Changes to the client’s circumstances that indicate it may be more appropriate for a client to apply for social housing.
Where an arrears payment arrangement is in place, Housing NSW will monitor the Bond Loan account to ensure payments are maintained in accordance with the agreement. The arrangement will remain in place until the account is no longer in arrears. If a client does not keep up-to-date with the agreed repayment arrangements, Housing NSW may suspend access to further Rentstart assistance. For further information, refer to Suspended Access to Rentstart Assistance.
Changes to a payment arrangement
During the term of a Bond Loan, clients experiencing a change in circumstances that affects their capacity to sustain their current payment plan can request a reduction in agreed payments. If Housing NSW agrees to reduce a client’s fortnightly payments, the overall payment period for the loan will be extended. Usually, the maximum term that Housing NSW will extend a loan to is 36 months, and the minimum payment Housing NSW will accept is $10 per fortnight. There are some situations where accepting a minimum payment of $10 per fortnight means that the term of the loan will be longer than 36 months.
In general, clients experiencing financial hardship on a 12 month payment plan will be offered an 18 month payment plan. Clients experiencing financial hardship on an 18 month payment plan will be offered a 36 month payment plan. Clients unable to maintain payments on a 36 month payment plan will be asked to pay a minimum or $10 per fortnight.
Requests to reduce payments can be made verbally or in writing. The client must be able to provide evidence to support their request for reduced payments.
Housing NSW will assess whether the client is able to sustain Bond Loan payments at their current level before agreeing to reduce payments. For more information about the criteria for reduced Bond Loan payments go to Eligibility criteria for changing a payment arrangement.
In exceptional circumstances, where reduced payments are not enough to alleviate financial hardship, Housing NSW may agree that a client may defer their payments for a short period. If a deferral is granted, Housing NSW will suspend the client’s payment plan for 3 months and the client is not asked to make payments for this period. Housing NSW will confirm the conditions of a deferral, including start and finish dates, in writing. Deferrals are not available before the loan term has been activated.
Housing NSW will automatically reinstate the client’s payments when a deferral period ends. If a client seeks a further deferral, this can be assessed no earlier than two weeks before the clients payments are reinstated. In general, Housing NSW will not agree to defer Bond Loan payments for more than six months throughout the duration of the Bond Loan as a current or former Bond Loan debt.
Eligibility criteria for changing a payment arrangement
Housing NSW will approve a reduction in agreed payments if the client demonstrates that they are experiencing a change in household circumstances relating to:
- essential living expenses, or
- a change in household income
that affects their ability to maintain Bond Loan payments at their current level.
Housing NSW does not consider expenses such as debts relating to personal loans (e.g. car loans, store loans), credit card debt or discretionary expenditure on household goods to be essential living expenses.
In a small number of cases, Housing NSW may agree to a client deferring their payments for a three month period. Housing NSW will grant a payment deferral if it is satisfied that:
- the client is experiencing financial hardship due to a change in household circumstances, and
- continuing current Bond Loan payments will place the client’s tenancy at risk, and
- making reduced Bond Loan payments will not adequately address the risk to the client’s tenancy.
For the purposes of this policy, Housing NSW regards financial hardship as:
- a household spending 55% or more of their income on rent, and/or
- a change in essential living expenses (temporary or on-going) that significantly reduces a client’s capacity to manage both rent and Bond Loan payments.
When considering whether to grant a payment deferral, Housing NSW will ask for information about the client’s household budget (including expenses). Housing NSW may also refer clients to external support services such as financial counselling as a condition of granting a payment deferral.
For more information about evidence requirements for reduced or deferred Bond Loan payments, go to Evidence Requirements for managing accounts.
At the end of a tenancy, Housing NSW will return all money repaid under the Bond Loan not claimed by the landlord/agent to the client. This enables the client to accumulate funds over time to contribute to another bond or other housing costs if they need to move again.
Where a client is in credit on their Bond Loan account, the credit amount will not be refunded until the Bond Loan has been finalised at the end of the tenancy or loan period.
Former Bond Loan debts
At the end of a tenancy, if the amount of money claimed by the landlord/agent is more than the amount repaid to Housing NSW by the client, there is a former Bond Loan debt that must be repaid to Housing NSW.
Former Bond Loan debts can be paid to Housing NSW in full or the client can retain their regular fortnightly loan payments until the debt is paid.
Clients with a former Bond Loan debt, who experience a change in circumstances that affects their capacity to sustain their payment plan, can request a reduction in agreed payments. In exceptional circumstances Housing NSW may agree to defer a former Bond Loan debt for a short period. For more information, go to Changes to Payment Arrangement.
Housing NSW may decide to suspend a client’s access to further Rentstart assistance if they fail to make regular payments on a former Bond Loan debt. For more information, go to Suspended Access to Rentstart Assistance. This does not affect a client’s ability to apply for other forms of housing assistance and does not affect a social housing applicant’s status on the NSW Housing Register.
Housing NSW reserves the right to pursue legal action to recover any Rentstart Bond Loan debt, including the referral of debts to a mercantile agent for recovery action.
Clients with a current or former Bond Loan debt who are approved for a second Bond Loan, are asked to repay their first Bond Loan debt before starting to repay the second loan. The client can repay this amount in full or in repayments agreed by Housing NSW.
Housing NSW will advise the client in writing when the first Bond Loan is repaid. Clients are expected to continue regular fortnightly payments until the second loan is repaid in full.
Suspended access to Rentstart assistance
Housing NSW may decide to suspend access to Rentstart assistance for clients who:
- do not keep up-to-date with current or former Bond Loan debt payments
- do not maintain a repayment arrangement to cover arrears on a current or former Bond Loan account
- exhibit serious or inappropriate behaviour towards staff. For more information, go to Client Service Delivery and Appeals Policy.
Clients who have had their access suspended will not be able to access a Rentstart Bond Loan (including Advance Rent) or Tenancy Assistance. Suspension does not affect a client’s eligibility for other products and services including Tenancy Facilitation, Private Rental Brokerage, Temporary Accommodation and social housing. Suspension does not affect a social housing applicant’s status on the NSW Housing Register.
Housing NSW will lift a suspension once the client re-starts Bond Loan payments or the client agrees to an arrears repayment arrangement. A suspension for serious or inappropriate behaviour will be lifted when the 6 month period of suspension has ended.
In exceptional circumstances Housing NSW may agree to provide Tenancy Assistance to a client who has had their access to further Rentstart assistance suspended for not keeping up-to-date with current or former Bond Loan debt payments, or not maintaining a repayment arrangement, if they are able to demonstrate they are at risk of homelessness and all the requirements for the provision of Tenancy Assistance are met.
Clients can appeal a decision to suspend their access to further Rentstart assistance. For more information, go to Client Service Delivery and Appeals Policy.
4. Evidence requirements for managing accounts
Housing NSW expects clients to provide documents or other evidence to substantiate their situation. The table below provides a guide to the evidence that may be required.
Rentstart Bond Loan Account Management Evidence
Demonstrating a change in household circumstances
- Bills, invoices, receipts or credit card statements to confirm additional costs such as medical expenses, carer costs, unexpectedly high utility bills, funeral expenses or other essential living costs
- Payslips, Centrelink statements or computer records or other documents to demonstrate a change in household income
- Documents demonstrating relationship breakdown
- A rent increase notice demonstrating a rent increase has occurred
- Residential Tenancy Agreement or other documentation which substantiates the rent for the property
- Payslips, Centrelink statements or computer records, Housing NSW computer records or other documentation that substantiates household income
- Documentation that substantiates a change in living expenses such as bills, invoices, receipts or credit card statements
Tenancy at risk
- Documentation from the client’s landlord or real estate agent or the NSW Civil and Administrative Tribunal (NCAT) that indicates the tenancy is at risk for example Notice of Termination for rent arrears or Specific Performance Order relating to rent arrears
- A rent increase notice demonstrating a rent increase has occurred
- Private rental tenancy statement or ledger showing rental arrears
- Documents that substantiate essential living expenses for example medical expenses, carer costs, unexpectedly high utility bills, funeral expenses
- Information relating to legal proceedings or debt recovery action
- Housing NSW computer records confirming Tenancy Assistance has been provided
- Budget completed by financial counsellor that demonstrates the client is not able to manage both rent and Bond Loan payments due to other essential living expenses
Deciding a reasonable payment arrangement
- Proof of household income such as Housing NSW computer records or documentation provided by the client
- Housing NSW computer records showing the amount of the debt
- File notes or other documentation related to the client’s circumstances which demonstrate the percentage of income spent on rent.
Credit or debit balances on Rentstart Bond Loan accounts
Housing NSW computer records
Transferring a Rentstart Bond Loan credit balance to another account
Written agreement from the client to transfer the balance
Suspending access to further Rentstart assistance, which includes Rentstart Bond Loan, Advance Rent, and Tenancy Assistance
Housing NSW computer records
Client declared bankrupt
Notices to Creditors of Bankruptcy by the Trustee in Bankruptcy
5. Legislation and compliance
Housing NSW is able to pursue Rentstart Bond Loan debt in accordance with the provisions in the Rentstart Bond Loan Agreement.
6. Related documentation
7. Further information
Appealing decisions or actions
If a Rentstart Bond Loan client disagrees with a decision Housing NSW has made, they should first discuss their concerns with a Client Service Officer by phoning 1300 468 746. The next step, if they still believe Housing NSW has made an incorrect decision, is to ask for a formal review of the decision. For information on how reviews work, the client can ask a Client Service Officer for a copy of the fact sheet Reviewing Decisions, or read the policy Client Service Delivery and Appeals.
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