The influence of housing costs on the economic well-being of Australian households at a regional level and the regional impact of housing assistance on financial disadvantage is as yet relatively unexplored. The paper describes a research project, placed within the broad conceptual framework of a deprivation approach to poverty and disadvantage, that will research the relationship between housing assistance, housing costs and financial disadvantage at a small area level, also comparing regional to metropolitan areas; the impact of house value and tenure on financial disadvantage; types of households impacted by the inclusion of housing costs, in particular older people; what the impact on financial disadvantage at a small area level would be if the upper limit for Commonwealth Rent Assistance was removed; the impact on financial disadvantage of people going from renting to purchasing housing, and possible policies and initiatives to reduce financial disadvantage. It includes a review of previous literature that has examined the relationship between housing costs and poverty, discusses the policy context and outlines a range of issues related to measurement, and how the researchers propose to address these issues in the project. There is a brief explanation of the spatial microsimulation methodology to be used, building on earlier NATSEM-AHURI work and using the HOUSEMOD spatial microsimulation model designed specifically for the modelling of housing policy at a small area level.