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Private Rental Assistance Policy
Policy Last Amended: 1 November 2016
Social housing providers recognise that establishing a tenancy in the private rental market can be difficult. To help people to access and maintain a tenancy in the private rental market, social housing providers can offer, or facilitate access to, the following private rental assistance products:
- Statements of Satisfactory Tenancy
- Private Rental Brokerage
- Brokerage Funds
- Tenancy Guarantee
- Private Rental Subsidies
- Subsidy Tapering
The intent of this policy is to outline the various forms of private rental assistance available from the social housing sector in NSW. The Private Rental Assistance Policy Supplement provides further information to support this document.
Social housing providers can also offer, or facilitate access to Rentstart assistance products, to assist with costs to establish and maintain a tenancy in the private rental market through the provision of bond, assistance to pay rental arrears or short term assistance for homeless people. For more information, go to the Rentstart Assistance Policy.
This policy applies to all applicants for private rental assistance products and applicants who may be eligible to receive a Private Rental Subsidy.
Under Housing Pathways, participating community housing providers facilitate access to private rental assistance products, for example via phone and or fax. Delivery of these products will remain the responsibility of the Department of Family and Community Services - FACS (with the exception of Tenancy Guarantees, where both FACS and community housing providers offer this product).
3. Policy statement
To access any of the private rental assistance options, households must meet the relevant eligibility criteria, which vary for each product. FACS will advise clients in writing of the outcome of a private rental assistance assessment.
If the client is not eligible for a certain product, FACS consider eligibility for other types of assistance.
Private Rental Assistance Products
A Statement of Satisfactory Tenancy (‘Tenancy Statement’) is a document that indicates whether a public housing tenant (i.e. a tenant whose tenancy is managed by FACS, including tenants of the Aboriginal Housing Office) has maintained a satisfactory tenancy in relation to the payment of rent and other charges, the care of their property and other tenancy aspects. A current or former public housing tenant can use the statement to help them get private rental accommodation when they are leaving, or have left, public housing.
Applying for a Statement of Satisfactory Tenancy
Clients who are eligible to apply for a Statement of Satisfactory Tenancy include current or former public housing tenants. Current tenants may only apply if they intend to move into private rental accommodation within six weeks of the date of their application.
Clients who may not apply for a Statement of Satisfactory Tenancy include:
- Current or former tenants of a tenancy managed by a community housing provider. Although a community housing tenant may not apply for a Statement of Satisfactory Tenancy from FACS, they should check with their provider if they offer a similar product.
- Other household members of a current or former tenancy managed by FACS.
Clients who are eligible to apply can do so by completing the Application for a Statement of Satisfactory Tenancy and returning it to FACS.
FACS will only provide statements to a tenant. If FACS receives a request from a third party, such as a property owner or real estate agent, FACS will not provide a reference or statement (verbal or written). Similarly, FACS will not expand on or clarify the contents of its written statement.
FACS can however, verify that it has issued a statement to a particular tenant.
Assessing an application for a Statement of Satisfactory Tenancy
FACS will assess the client’s eligibility for a tenancy statement and provide a written response within 10 working days of receiving the application. To allow FACS to do this, it may be necessary to inspect a current tenant’s property in a shorter timeframe than usual. FACS will seek a current tenant’s consent to do an inspection, where possible, within four days of receiving their application.
FACS will only provide a Statement of Satisfactory Tenancy to a current or former tenant if, apart from minor matters, the tenant satisfies the eligibility criteria. For more information on minor matters, go to Minor matters. For more information on the eligibility criteria, go to Eligibility criteria and evidence requirements for a Statement of Satisfactory Tenancy.
If a client is eligible, FACS will issue a Statement of Satisfactory Tenancy.
If a client is not eligible, FACS will issue a letter declining the client’s request for a Statement of Satisfactory Tenancy. However, the client may become eligible in the future if they satisfy certain conditions. For more information, go to Conditions for becoming eligible for a Statement of Satisfactory Tenancy in the future.
FACS provides a Private Rental Brokerage Service (PRBS), which is available in certain locations across the state. For more information, go to Locations where Private Rental Brokerage is available.
The service aims to assist clients by developing and enhancing their capacity to access the private rental market, with the client directing the process as much as possible so they build their confidence and skills. This will be achieved by coaching, guiding and supporting the client. To facilitate this process, FACS staff will continue to develop relationships with local real estate agents and landlords to improve client access to the private rental market.
A client may access the PRBS in one of three ways:
- A social housing provider receives a client referral from a support provider
- Where the client presents at a FACS or community housing provider’s office and requests the service. Where the client presents to a community housing provider, they will facilitate access to the service through FACS
- The client seeks assistance for another housing assistance product and the provider considers them a potential candidate for the PRBS.
Assessing eligibility for the Private Rental Brokerage Service
FACS will interview the client to determine their eligibility for Private Rental Brokerage. For more information, go to Eligibility criteria for Private Rental Brokerage. As part of the interview, FACS will also gather information about the client’s needs and expectations, and will assess evidence requirements. For more information, go to Gathering information about a client’s needs and expectations and Evidence requirements for assessing Private Rental Brokerage eligibility.
If the client is eligible, FACS will commence work with the client and support provider to find a suitable property.
Providing Private Rental Brokerage
Where a client is eligible for PRBS, FACS will:
- Check the client’s eligibility for other private rental assistance products based on their needs and whether they meet the eligibility criteria. FACS may offer these products, for example Rentstart or Tenancy Guarantee, to increase the client’s chance of securing and sustaining a tenancy.
- Provide the tenant with Tenancy Facilitation, which is the provision of information and practical assistance to search and apply for private rental properties. For more information, go to Tenancy Facilitation.
- Monitor the tenancy. FACS will discuss any issues that may affect the tenancy with the client, the support provider and the agent/landlord in an attempt to rectify the issues identified. The emphasis will be on looking at options for sustaining the tenancy, where appropriate. For more information, go to Monitoring a private rental tenancy.
Ending the Private Rental Brokerage Service
The service provider, FACS and the client will make a joint decision about ending the service in line with the case plan established at the beginning of the tenancy. If one party wishes to exit the agreement early, they should notify the other parties as soon as possible.
3.3 Brokerage Funds
FACS provides up to $2000 in Brokerage Funding for each Youth Subsidy and Start Safely client who secure a private rental tenancy, regardless of whether they receive a subsidy or not. Brokerage is to be used to assist the client in establishing and maintaining their tenancy and/or to cover relevant work/study related costs.
A Brokerage Expenditure Plan is completed to examine whether alternate funding options are available e.g. a Leaving care plan, Supported Independent Living package, Transition to Independent Living Allowance, No Interest Loans etc.
Brokerage money will be held by FACS and will be made available to the client’s nominated support partner following the approval of a Brokerage Expenditure Plan. Up-to-date records of all brokerage provided to each client, including invoices and / or receipts for all goods and services, must be maintained and provided to FACS.
Use of Brokerage Funds
Brokerage funds may be used for the following purposes:
- Assistance with education and training
- Employment related costs
- Household establishment
- Professional services that assist the client in sustaining their tenancy or prepare them for employment or training
- Counselling related services
- Transport related assistance
Brokerage funds may not be used for the following purposes:
- Advance rent or bond payments
- Rent arrears
Tenancy Guarantees are available in all FACS offices. A social housing provider may offer a Tenancy Guarantee of up to $1500 to assist a client with a limited or poor tenancy history to establish a private rental tenancy. The Tenancy Guarantee can supplement the rental bond if the tenant incurs rental arrears and/or damages the property over and above the value of the rental bond.
In most cases, social housing providers expect that tenancies will be successful. A successful tenancy enables the client to build a positive tenancy history, thereby reducing or eliminating the disadvantages they previously experienced when trying to access the private rental market.
The Tenancy Guarantee is valid for the fixed term period of the tenancy agreement, up to 12 months from the start of the tenancy, or until the tenancy ends, whichever occurs sooner. This means that, up to a maximum of 12 months, the Tenancy Guarantee will last for the length of the residential tenancy agreement.
The Tenancy Guarantee ends if the landlord/agent terminates the residential tenancy agreement.
Assessing eligibility for a Tenancy Guarantee
A social housing provider will interview the client to determine their eligibility for a Tenancy Guarantee. For more information, go to Eligibility criteria for a Tenancy Guarantee. As part of the interview, the provider will also assess the client’s need for a Tenancy Guarantee. For more information, go to Determining the client’s need for a Tenancy Guarantee.
Providing a Tenancy Guarantee for an eligible client
If the client is eligible for a Tenancy Guarantee, the social housing provider will give them:
- A Tenancy Guarantee offer letter, and
- A copy of the brochure ‘Tenancy Guarantee Information for Landlords and Agents.’
The social housing provider will advise the client of:
- The conditions which are necessary for a Tenancy Guarantee to be activated, (for more information, go to Conditions which are necessary to activate a Tenancy Guarantee), and
- The responsibilities of the housing provider, the tenant and the landlord/real estate agent during the tenancy. For more information, go to Responsibilities of the housing provider, the tenant and the landlord/real estate agent during the tenancy.
Providing a second Tenancy Guarantee
The aim of the Tenancy Guarantee is to allow the client to establish a satisfactory tenancy. Clients who have established a record of a successful tenancy should not need another Tenancy Guarantee to assist them in the private rental market.
In some unusual circumstances, a client may need a second Tenancy Guarantee because of factors outside their control. For more information, go to Circumstances where a client may require a second Tenancy Guarantee.
When a Tenancy Guarantee expires
The social housing provider will notify the landlord/agent and tenant in writing one month before the Tenancy Guarantee expires. If the agent is satisfied with the tenancy, they may allow the tenancy agreement to continue beyond the fixed term period.
The social housing provider will notify the client when the Tenancy Guarantee expires. If there is no claim on the Tenancy Guarantee, then the tenant has demonstrated that they can sustain a tenancy in the private rental market and they will be encouraged to seek a reference from the agent at the end of the tenancy.
Claiming against a Tenancy Guarantee
To make a claim against the Tenancy Guarantee the landlord/agent must:
- Show that the claim exceeds the bond, and
- Show that they took reasonable action to mitigate the loss. This includes actions such as notifying the social housing provider if the tenancy agreement was breached, regular property inspections and contact with the tenant if the rent was not paid, and
- Submit a completed Tenancy Guarantee Claim Form to the housing provider with evidence to support the claim, and
- Submit the claim within the relevant timeframe. For more information, go to Timeframe for submitting a claim.
The social housing provider will assess the claim, which may involve inspecting the property. If the provider is satisfied that the evidence justifies the claim, they will pay the claim. The provider will notify the landlord/agent in writing of the outcome of the claim.
Private Rental Subsidy is a medium-term solution to assist the client accessing affordable accommodation in the private market while waiting for a suitable social housing property to become available. This product aims to assist clients in the greatest need who have a disability and are at risk in their current accommodation.
A Private Rental Subsidy makes up the difference between the amount the client pays in rent, and the benchmark rent for a property in an approved area that is comparable to a FACS property. Benchmark rent means a rent based on the average rent data provided by NSW Fair Trading for specific sizes and types of accommodation in an area.
There are some exceptional circumstances where FACS will approve the payment of a private rental subsidy where the property rent is above the benchmark. For more information, go to Exceptions where a Private Rental Subsidy may be considered for rent above the benchmark.
The eligibility criteria for a Private Rental Subsidy will differ, depending on the type of subsidy a client may receive. Where a social housing provider approves a client for priority housing, they may be eligible for a Private Rental Subsidy from the date of priority housing approval.
FACS will regularly review a client’s entitlement to receive a Private Rental Subsidy.
Private Rental Subsidy assistance entitlements prior to 12 June 2012
Private Rental Subsidy - Special
The Private Rental Subsidy Special is a longer-term housing solution that does not require a client to move into social housing. To be eligible for a Private Rental Subsidy Special , clients must:
- Be eligible for social housing (for more information, go to the Eligibility for Social Housing Policy), and
- Meet the criteria for priority assistance (for more information, go to the Eligibility for Social Housing Policy), and
- Be diagnosed as HIV/AIDS positive, as documented by a medical practitioner, and
- Provide evidence from a health or community expert as to how the person’s HIV status impacts on their housing and locational needs, including carer and support services needed, and
- Provide evidence as to how the Private Rental Subsidy Special or social housing allocation would help resolve that need.
Private Rental Subsidy - Special clients moving from private rental accommodation to social housing
A client who has been approved for Private Rental Subsidy - Special and is seeking an allocation of social housing may apply for priority assistance. When approved, they become eligible for priority assistance from the date that FACS first approved their Private Rental Subsidy - Special.
Private Rental Subsidy - Disability
The Private Rental Subsidy Disability is a short-term solution to assist the client while waiting for a suitable social housing property to become available. To be eligible for a Private Rental Subsidy disability, clients must:
- Be eligible for social housing (for more information, go to the Eligibility for Social Housing Policy), and
- Have a disability. For more information, go to Disability, and
- Be approved for priority assistance (for more information, go to the Eligibility for Social Housing Policy), or
- Have reached their turn on the public housing list.
If a client receiving a Private Rental Subsidy - Disability refuses two reasonable offers of social housing, they will no longer be entitled to receive the subsidy and FACS will remove them from the NSW Housing Register.
Clients approved for a Private Rental Subsidy prior to 12 June 2012 will have their entitlements protected.
Eligibility criteria for the Private Rental Subsidy assistance from 12 June 2012
Eligibility for the Private Rental Subsidy assistance
To be eligible for the Private Rental Subsidy clients must:
- be approved for priority status on the NSW Housing Register, and
- have a recognised disability or medical condition, and
- be able to demonstrate they are also at risk in their current housing which is not suitable for them to live in while they are waiting for social housing.
If a client receiving the Private Rental Subsidy assistance refuses a reasonable offer of social housing, they will no longer be entitled to receive the subsidy. They will however be entitled to receive another offer of social housing.
Clients will be approved for a rental property that is similar to a property they are likely to be allocated in social housing. Clients will only be approved to rent in suburbs where there are existing social housing properties.
Prior to offering the Private Rental Subsidy assistance for a specific property, a client must confirm that when they are housed in social housing, arrangements can be made to transfer support services within the allocation zone for which they are approved or that services can be transferred to another provider.
When FACS approves a client for the Private Rental Subsidy assistance, the client is given a benchmark rent amount that will be approved for a private rental property. Benchmark rents are capped at a median rent of the middle ring of the Sydney suburbs.
To receive the subsidy clients must secure a private tenancy within 3 months of approval to retain their approved Private Rental Subsidy entitlements. After this period, a new assessment will be required.
Clients must provide suitable documentary evidence to support their application for a Private Rental Subsidy. For more information, go to Evidence requirements for a Private Rental Subsidy. Clients must also provide proof of income for all members of the household aged 18 years and over. For more information, go to Proof of income and assets.
Calculating the subsidy
As long as the rent charged by the landlord is reasonable, the amount of rent the client actually pays is similar to the amount they would pay as a FACS tenant. The majority of Private Rental Subsidy clients contribute 25% of their income to rent; however, there are some exceptions. For more information, go to Exceptions to paying 25% of income towards rent.
Clients who receive a Private Rental Subsidy are entitled to receive Commonwealth Rent Assistance (CRA) as they are not public housing tenants and are renting in the private sector. When assessing the household income, FACS will presume that a client is receiving CRA even if they have not applied to Centrelink for this income.
CRA contributes towards rent. When calculating the subsidy provided to new clients, and existing clients relocating to a new address, FACS will assess 100% of the CRA as a contribution towards rent. However, there are some exceptions in relation to existing clients who move. For more information, go to Exceptions to calculating Commonwealth Rent Assistance at 100%.
FACS includes a carer’s income in the Private Rental Subsidy calculation if they are living with the client. FACS excludes a carer’s income if they are not living with the client.
Reviewing Private Rental Subsidy assistance
Private Rental Subsidy clients do not need to reapply for a subsidy each year. However, FACS will regularly review the income details of Private Rental Subsidy clients, their circumstances and their entitlement to receive the subsidy. FACS calls this a scheduled Private Rental Subsidy Review.
When a client informs FACS of any changes to their household or household income, FACS will reassess the subsidy to ensure that the household is paying the correct amount of rent and is still entitled to receive Private Rental Subsidy assistance. FACS calls this an individual Private Rental Subsidy Review.
Change in circumstances
A Private Rental Subsidy client must advise FACS within 28 days of any changes in: household members; household income; rent; property address; diagnosed medical condition or disability; need for carer; landlord or real estate agent.
Clients already receiving Private Rental Subsidy assistance whose rent increases over the benchmark rent will have their subsidy re-assessed. In exceptional circumstances a client may be approved to pay a rent that is over the benchmark. Clients must either move to a property at or below the median rental or lose their subsidy unless they can demonstrate exceptional circumstances and that they can afford to pay a rent that is over the benchmark. For more information, go to Situations where a Private Rental Subsidy may be considered for rent above the benchmark.
If a Private Rental Subsidy client does not inform FACS about changes to their household or household income, the household may be provided with an incorrect subsidy amount. In some cases, this may result in the client owing money to FACS or their subsidy being ended.
A client should also advise FACS if they are considering moving to another property as this may affect the approval of their subsidy or the amount of their rent subsidy.
Paying a Private Rental Subsidy
FACS will pay a Private Rental Subsidy assistance from:
- The date on which the client’s application was approved, or
- The date the lease begins, whichever is the later.
FACS pays the subsidy directly to the landlord/agent, with payment being generally one month in advance.
FACS will end Private Rental Subsidy assistance when a client:
- approved for Private Rental Subsidy-Disability before 12 June rejects two reasonable offers of social housing; or
- approved for Private Rental Subsidy from 12 June 2012 rejects their first reasonable offer of social housing; or
- has undergone a Review and is no longer eligible to receive Private Rental Assistance.
In all these circumstances, FACS will refer the file to the Housing Appeals Committee for an independent review of the decision. If the original decision is maintained, FACS will advise the client in writing of the outcome of the independent review and that the subsidy payment will be stopped within 14 days of the final appeal outcome. For further information, go to Client Service Delivery and Appeals Policy.
3.6 Subsidy Tapering
Subsidy Tapering prepares clients to pay full market rent through a gradual reduction in subsidy assistance. By gradually reducing the subsidy, the amount of rent a client pays gradually increases. This supports the client to build capacity over time, to be able to sustain private rental tenancies at market rents and become financially independent.
Subsidy Tapering will be applied to short to medium term private rental assistance products, including the Start Safely Private Rental Subsidy and the Youth Private Rental Subsidy. These products are provided to clients that are considered, after a period of rental assistance and integrated support, able to transition to a full market.
Calculating the Subsidy Taper
The amount of rent a client pays for the first 12 months is similar to the amount they would pay if they were a FACS tenant. The client pays approximately 25% of their income as rent. This is based on the standard assessment policy.
Clients who receive a medium term subsidy are entitled to receive Commonwealth Rent Assistance (CRA) as they are renting in the private sector and are not public housing tenants. When assessing the household income, FACS will presume that a client is receiving CRA even if they have not applied to Centrelink for this income.
CRA contributes towards rent. When calculating the subsidy provided to new clients, and existing clients relocated to a new address, FACS will assess 100% of the CRA as a contribution towards rent. The subsidy is the difference between the client’s rent including the CRA and the market rent for a property.
Subsidy Tapering will generally commence at the 12 month anniversary of the client’s first subsidy. The majority of subsidies will be tapered in 5 steps when the maximum period for a medium-term subsidy is 36 months. When calculating the amount of each subsidy taper increment, FACS will divide the current subsidy by the expected number of subsidy tapers. At each taper point, the client’s rent is increased by an amount equal to the current subsidy amount divided by the number of remaining taper steps.
Reviewing the Subsidy Taper
Clients that are receiving a medium term private rental assistance product will have their eligibility reviewed quarterly.
A client who receives Start Safely for a full 36 months will generally have their subsidy adjusted in 5 stages, with the final transition to zero subsidy occurring at 36 months.
The key stages where tapering adjustments are implemented are at six monthly intervals – at the end of 12 months, 18 months, 24 months, 30 months and then at the end of the subsidy period of 36 months.
These adjustments will be discussed and confirmed with the client at the Quarterly Reviews three months prior - at 9months, 15 months, 21 months, 27 months and 33 months.
There are some exceptional circumstances where FACS will make the decision to commence tapering of a subsidy but at a reduced rate. For more information, go to Private Rental Assistance Policy Supplement.
A rent increase applied as a result of tapering must not result in the client’s rent payable exceeding their maximum affordability or the rent set for a client must not fall below the standard subsidised rent for the household.
If the decision is made to not commence tapering of the client’s subsidy, the client will be reviewed again for tapering at the next quarterly review. If the client is unable to commence tapering following a subsequent quarterly review they should be assessed for an alternative product.
Eligibility criteria for Subsidy Tapering prior 1 November 2016
Clients receiving either a Start Safely Private Rental Subsidy or Youth Private Rental Subsidy prior to 1 November 2016 will be exempt from Subsidy Tapering. However, existing clients receiving either a Start Safely or Youth Private Rental Subsidy may opt to have tapering applied to their subsidy.
4. Legislation and compliance
FACS is able to provide private rental assistance products in accordance with the Housing Act 2001.
5. Related documentation
- Social Housing Eligibility and Allocations Policy Supplement
- Eligibility for Social Housing Policy
- Children and Young People at Risk Policy
- Client Service Delivery and Appeals Policy
6. Further information
Appeals and review of decisions
If a client disagrees with a decision a social housing provider has made, they should first discuss their concerns with a staff member from the provider that made the decision. The next step, if they still believe the social housing provider made the wrong decision, is to ask for a formal review of the decision.
For information on how FACS reviews work, see the fact sheet Appeals and reviewing decisions, or read the Client Service Delivery and Appeals Policy. This policy applies to all clients of FACS including applicants for housing assistance who are assisted by FACS local offices or the FACS Housing Contact Centre.