Retirees who rent in Australia today are being left behind. Two in three retirees who rent in the private market live in poverty – and the problem is set to get worse. Two in three retirees who rent in the private market live in poverty – and the problem is set to get worse. This report argues that Commonwealth Rent Assistance, which supplements the Age Pension for poorer retirees who rent, is far too low. 

Home ownership is falling fast among poorer Australians who are approaching retirement. Between 1981 and 2021, home ownership rates among the poorest 40% of 45-54 year-olds fell from 68% to just 54%. Most older working Australians who rent do not have sufficient savings to keep paying rent in retirement. The poorest 40% of renting households aged 55-64 have less than $40,000 in net financial wealth.

The government has lifted the maximum rate of Rent Assistance by 27% – over and above inflation – in the past two budgets. But even after these increases, a single retiree who relies solely on income support can afford to rent just 4% of one-bedroom homes in Sydney, 13% in Brisbane, and 14% in Melbourne. And the rents paid by people who get Rent Assistance have increased nearly 1.5 times faster than the maximum rate of the payment since 2001.

This report argues Australia is failing too many retirees who rent and only a further substantial boost to Rent Assistance can ensure that all Australians get the dignified retirement they deserve.

Recommendations

1. The maximum rate of Commonwealth Rent Assistance should be increased by 50% for singles and sharers, and 40% for couples.
2. Commonwealth Rent Assistance should be indexed to changes in rents for the cheapest 25% of rental homes in capital cities.