Rental-Insights-A-COVID-19-Collection - Flipbook - Page 14
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RENTAL INSIGHTS:
COPING WITH
LOW INCOME
COPING WITH LOW INCOME
Mark Stephens
University of Glasgow
Loss of rental affordability
linked
XXX to raids on super
XXX
Key findings
Why is it important?
Who is most affected?
Deteriorating rental
affordability is the
factor most strongly
associated with private
renters deciding to make
use of the COVID-19
Superannuation Early
Release Scheme.
Some 40 per cent of
respondents whose rent
became unaffordable
as a result of COVID-19
applied for early release,
compared to 15 per cent
whose rent had remained
affordable.
Since the 1990s Australia has developed
a compulsory superannuation scheme
operated by approved funds which
provides a bedrock of financial security
in retirement.
The survey found that 16.9 per cent
of private tenants had applied to the
SERS. A further 3.3 per cent indicated
that they ‘preferred not to say’.
The Australian Government introduced
the Superannuation Early Release
Scheme (SERS) in response to financial
hardship caused by the COVID-19
pandemic. This allows people to
withdraw up to $20,000 over two years.
The Australian Prudential Regulation
Authority reported that, by late August,
3.1 million members had made an
application under SERS and a further
1.2 million repeat applications had
been made.
The use of SERS as a relief fund is
a fundamental departure from the
purpose of superannuation.
Some 40 per cent of tenants whose rent had
become unaffordable due to COVID-19 had
applied to SERS to cover housing or other costs.
Tenants were asked whether they had
applied to the scheme to cover housing
or other costs. They were more likely
to have done so if they experienced
problems with housing affordability.
More than one- quarter (26.3%) of
tenants who reported their housing
to be ‘very unaffordable’ and 22.1 per
cent who found it ‘unaffordable’ had
applied to the scheme. In contrast,
around 15 per cent of those who did
not experience problems with
affordability had applied.
A more striking relationship is found
with tenants whose rent had become
unaffordable as a result of COVID-19.
Some 40 per cent of tenants whose
rent had become unaffordable due
to COVID-19 had applied to SERS
to cover housing or other costs. This
compares with 14.8 per cent who had
done so even though their rent had
not become unaffordable.
The survey also shows a strong overlap
between those tenants who had applied
to SERS and those who had drawn
on their savings to cover housing or
other costs.
Almost three-quarters (74%) of those
who had applied to SERS had also
drawn on their savings.