The cost of homelessness and the net benefit of homelessness programs: a national study

18 Dec 2013

Specialist Homelessness Services (SHS) aim to assist people who are homeless, or at risk of homelessness, to access and maintain stable and secure accommodation. This study examines the client outcomes of these services and the net costs of these programs for governments. Governments face direct costs for these programs but also may make budgetary savings resulting from reduced use of non-homelessness services (e.g. health, justice and welfare services).

The study used longitudinal surveys of SHS agencies and clients in four states (New South Wales, Victoria, South Australia and Western Australia) over the period 2010 to 2012.

Specialist Homelessness Services clients were found to experience more stable accommodation, improved access to health services, more stable income and improved social relationships.  They experienced minimal change in relation to employment and financial circumstances: most remained reliant on welfare payments.

Governments also experienced fiscal benefits from these programs. The reduction in average non-homelessness costs in the first year after receiving support was $3685 per client. This is despite the fact that non-homelessness costs for many clients (especially single men) actually increased post-SHS because of increased take up of health services or better access to welfare payments.

This had significant implications for the effective costs of the SHS programs.  For example, total program costs of providing supported accommodation programs for single men ($4890 per client) are partially offset by non-homelessness service savings of $1389 per client (resulting in a net cost of $3501 per client).  The offsets for single women ($8920 per client) are even greater, effectively saving the government $4030 per client.

Policy-makers and practitioners should be encouraged that programs designed to address homelessness appear to have direct benefits for the individual but also additional fiscal benefits, even in the short term.  They should be careful in suggesting it is a cost-effective method for all clients as some SHS clients experience an immediate increase in usage of health and welfare services.  Longer term cost savings for these clients might only be observed after tracking the outcomes of SHS clients over a longer period.

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