(Cth) Index Commonwealth Rent Assistance to Rental Inflation

Akash Merai, Chamika Fonseka & Mecca Setiawan
19 hours ago
8 min read

Author: Mecca Setiawan, Akash Merai & Chamika Fonseka | Publish date: 12/3/2026

P: The maximum rates of Commonwealth Rent Assistance are not indexed to the rent component of the Consumer Price Index.
S: The Minister for Social Services should amend Section 1191 of the Social Security Act 1991 (Cth) to index Commonwealth Rent Assistance to the rent component of the Consumer Price Index.

Problem Identification:

Sections 1070L to 1070R of the Social Security Act 1991 (Cth) (the Act) establish the eligibility rules and maximum rates for Commonwealth Rent Assistance (CRA). Section 1191 of the Act currently indexes CRA to the general Consumer Price Index (CPI); it is not indexed to the rent component of the CPI.

According to the Grattan Institute, this means that CRA is ‘indexed to inflation, rather than recipients’ housing costs’. They have further stated that increases in CRA have ‘not kept pace with rent increases.’ Anglicare Australia has argued that CRA is ‘failing to achieve’ its stated objective of alleviating rental stress.

Context:

CPI is defined as a measure of ‘household inflation and includes … price change for categories of household expenditure.’ The rent component of the CPI refers to a measure of ‘actual rents paid’.

Everybody’s Home, an advocacy group, has stated that ‘rental stress’ refers to renters ‘spending more than 30 percent of their income on rent.’

CRA refers to a ‘supplementary payment added on to the pension, allowance or benefit of eligible income support recipients and families renting in the private rental market and community housing.’ According to Services Australia, CRA amounts can vary based on a recipient’s income support payments, their income, their household composition, and their private rental costs. They have noted that the CRA is adjusted twice per year.

Treasury has further noted that, in addition to regular indexation, CRA amounts increased by 15% in September 2023 and 10% in September 2024. However, in 2025, the Economic Inclusion Advisory Committee (EIAC) noted that these increases have not resolved ‘high levels of rental stress’.

According to a 2024–25 Budget review analysis, national median market rents have ‘averaged a growth rate of 9.1% a year for the past 3 calendar years’ – higher than inflation during the same period.

Arguments:

Anglicare Australia has argued that ‘CRA has contributed to rental stress for many recipients due to payments not keeping pace with rising rents.’ According to the Grattan Institute, the CRA’s indexation to the CPI means that, since 2001, ‘rents paid by [CRA] recipients have increased nearly 1.5 times faster’ than the payment itself. The Productivity Commission found that ‘41.8% of low income households receiving CRA still experienced rental stress’. The Australian Council of Social Service (ACOSS) has warned that even with recent increases, CRA recipients on JobSeeker or Youth Allowance ‘will be paying half of their income in rent alone.’ They have argued that this causes ‘deep housing stress’. Everybody’s Home has further identified that ‘virtually no region of Australia is affordable for households on low incomes, even when incorporating the highest [CRA] rates’.

The EIAC has argued that, despite recent increases, payments like CRA ‘fall far short of what is needed to lift people on income support payments out of poverty.’ Everybody’s Home has warned that ‘minimal increases’ to payments are ‘being eclipsed by high rents, bills and the cost of essential goods.’ The Grattan Institute has reported that an average single pensioner would have less than $300 left per week to pay for rent, even after recent increases to CRA. They have noted that only 11% of one-bedroom dwellings in capital cities are affordable within that budget. The EIAC has found that recipients ‘regularly go without life’s essentials because they cannot afford them, and the low level of payments prevent them securing employment and participating in the economy and society.’ National Seniors Australia (NSA) has stated that while recent increases to CRA have ‘helped in a small way’, they are ‘not enough and will disappear if indexation continues to be attached to general CPI’.

Advice/Solution Identification:

Anglicare, Homelessness Australia, NSA, and ACOSS have all called for CRA to be indexed to the rate of rent inflation instead of CPI. NSA has argued that ‘indexing to the rent component of CPI’ could be a ‘simple and effective [way] to address the housing problem facing older renters into the future’ by increasing payments in line with rental inflation.

Precedent:

There is domestic precedent for indexing government schemes to CPI rental inflation. Domestically, the National Rental Affordability Scheme (NRAS) uses a market rent index based on the rent component of the CPI to update NRAS rents and incentives.

Public Support:

Broad Support:

Grattan Institute (Called for CRA to be indexed to the 25th percentile of the rent component of CPI)

This list reflects publicly stated positions and should not necessarily be taken as endorsement of this specific brief.

News Coverage:

The Conversation - “Most retirees who rent live in poverty. Here’s how boosting rent assistance could help lift them out of it”. This article argued that both the rate and indexation of rent assistance need to be increased and adjusted to better support retirees who rent. By: Brendan Coates, Joey Moloney and Matthew Bowes | 9 February 2025 - Read the article here.
SBS News - “How Australia is 'failing' most retirees who rent — and putting them at risk of homelessness”. This article highlighted how rental stress is affecting retirees and how increasing the rate and indexation of rent assistance would help. By: AAP | 10 February 2025 - Read the article here.
SBS News - “‘It's just impossible': The rental crisis pushing working families to the brink”. This article discussed the impact of rising rents and how it caused many renters in cities to fall into rental stress. By: Christopher Tan | 24 November 2025 - Read the article here.
ABC News - “Households now need six-figure income to comfortably rent in any capital city”. This article highlighted how rents have increased dramatically in the last couple of years in capital cities and how it is causing many people to fall into rental stress. By: Stephen Clarke | 11 December 2025 - Read the article here.

Where to go to learn more:

(2025) Renting in retirement: Why rent assistance needs to rise | Grattan Institute - The Grattan Institute report advocated for an increase and change in indexation of CRA, and highlighted how current CRA rates and indexation are inadequate, particularly for seniors and retirees. View their 2025 report here.
(2024) Submission to the Senate Select Committee on cost of living | Homelessness Australia - Homelessness Australia’s joint submission to the Senate Select Committee on Cost of Living focused on high rents and housing prices, and how inadequate income support was driving low income renters into rental stress and poverty. They further advocated for an increase and a change in the indexation of CRA. View their 2024 submission here.
(2023) Inquiry into the worsening rental crisis in Australia | ACOSS - ACOSS’s submission to the Community Affairs Committee on the Rental Crisis advocated for a change to the indexation of Rent Assistance from CPI to rent inflation, and further highlighted how rising rents have contributed to increased rental stress, View their 2023 submission here.
(2023) Reforming rent assistance: Ending rental stress across Australia | Anglicare Australia - Anglicare’s report on reforming Rent Assistance highlighted how rent inflation grew faster than CPI and caused Rent Assistance payments to become inadequate for recipients. The report advocated for CRA indexation to be changed from CPI to rent inflation. View their 2023 report here.
(2024) Increase the maximum rate of Commonwealth Rent Assistance (CRA) and tie indexation to changes in rental prices rather than overall CPI | National Seniors Australia - National Seniors Australia’s brief advocated for Rent Assistance indexation to be changed from CPI to rent inflation and also detailed the economic impact of doing so. View their 2024 brief here.
Social Security Act 1991 (Cth) - Read the full Act here.

Human Perspective:

Trigger Warning: Homelessness, poverty.

Margaret is 68 and rents a one-bedroom home in Sydney. Over the years, her weekly rent has climbed to $350 per week. However, her Commonwealth Rent Assistance has only inched up with general inflation, never keeping pace with the real jumps in her rent. Each time her rent increases, the extra assistance she receives is a few dollars short, forcing her to cut back in other parts of her life. She has started skipping fresh fruit and vegetables for cheaper tinned food, running the heater less in winter, and delaying GP appointments because she cannot spare the gap in her rent. Every rent rise pushes her closer to having to choose between medication, food, and keeping her home. Her income support is now a stressful balancing act, where rent assistance is not indexed to the rent increases she actually faces. Margaret is worried that she may be evicted due to rising rents and fears that she may become homeless.

To protect the anonymity of those involved, this is a fictionalised account drawn from an amalgamation of real-life stories, experiences and testimonials gathered during the research process for this brief. Any resemblance to actual individuals is purely coincidental.

Conflict of interest/acknowledgment statement:

N/A

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Reference list:

Anglicare Australia. (2023). Reforming rent assistance: Ending rental stress in Australia. https://www.anglicare.asn.au/wp-content/uploads/2023/01/Paper-Reforming-Rent-Assistance.pdf

Australian Bureau of Statistics. (2024, October 30). Frequently asked questions (FAQs) about the Consumer Price Index. https://www.abs.gov.au/articles/frequently-asked-questions-faqs-about-consumer-price-index

Australian Council of Social Services. (2023). Inquiry into the worsening rental crisis in Australia. https://www.acoss.org.au/wp-content/uploads/2023/09/Submission-to-Inquiry-on-rental-crisis-September-2023.pdf

Australian Institute of Health and Welfare. (2025, October 16). Housing affordability. Australian Government. https://www.aihw.gov.au/reports/australias-welfare/housing-affordability#:~:text=28%25%20of%20renting%20households

Coates, B., Bowes, M., & Moloney, J. (2025). Renting in retirement: Why Rent Assistance needs to rise. Grattan Institute. https://grattan.edu.au/wp-content/uploads/2025/02/Renting-in-retirement-Why-Rent-Assistance-needs-to-rise-Grattan-Report.pdf

Department of Social Services. (2026, February 2). Social security guide: 1.1.I.100 indexation. Australian Government. https://guides.dss.gov.au/social-security-guide/1/1/i/100

Department of Social Services. (2026, February 2). Social security guide: 1.2.7.10 Rent assistance (RA) - Description. Australian Government. https://guides.dss.gov.au/social-security-guide/1/2/7/10

Economic Inclusion Advisory Committee. (2025). 2025 report to government. https://www.dss.gov.au/system/files/documents/2025-04/economic-inclusion-advisory-committee-2025-report.pdf#page=144

Everybody’s Home. (2024). Priced out: An index of affordable rentals for people on the lowest incomes. https://everybodyshome.com.au/wp-content/uploads/2024/09/Priced-Out-Report-2024.pdf#page=7

Homelessness Australia. (2024). Submission to the Senate Select Committee on Cost of Living. https://homelessnessaustralia.org.au/wp-content/uploads/2024/04/Joint-cost-of-living-Submission-2-1.pdf

Homelessness Australia. (2025, January 31). Alarming rise in persistent homelessness revealed. https://homelessnessaustralia.org.au/alarming-rise-in-persistent-homelessness-revealed/

Liu, E., Valentine, K., Batterham, D., Stone, W., Martin, C., Parkinson, S., & Hynes, D. (2023). Poverty and Australian housing: Findings from an investigative panel (Report No. 410). Australian Housing and Urban Research Institute. https://www.ahuri.edu.au/sites/default/files/documents/2023-11/AHURI-Final-Report-410-Poverty-and-australian-housing-findings-from-an-investigative-panel.pdf#page=7

National Seniors Australia. (2024). Increase the maximum rate of Commonwealth Rent Assistance (CRA) and tie indexation to changes in rental prices rather than overall CPI. https://nationalseniors.com.au/uploads/0120245191PAR-RentAssistance-Recommendation.pdf

Office of Policy Development and Research. (2025). Fair market rents (40th percentile rents). U.S. Department of Housing and Urban Development. https://www.huduser.gov/portal/datasets/fmr.html#:~:text=are%20estimates%20of%2040th%20percentile%20gross%20rents%20for%20standard%20quality%20units%20within%20a%20metropolitan%20area%20or%20nonmetropolitan%20county

Schatz, L., & Thomas, M. (2024, June 25). Budget review article, 2024-25: Housing.

Parliament of Australia. https://www.aph.gov.au/About_Parliament/Parliamentary_departments/Parliamentary_Library/Research/Budget_Review/2024-25/Housing

Services Australia. (2025, October 28). How much you can get: The amount of Rent Assistance you can get depends on how much rent you pay. https://www.servicesaustralia.gov.au/how-much-rent-assistance-you-can-get?context=22206

Social Security Act 1991 (Cth). https://www.austlii.edu.au/cgi-bin/viewdb/au/legis/cth/consol_act/ssa1991186/

Steering Committee for the Review of Government Provision. (2025). Report on government services 2025: Housing and homelessness (part G). Productivity Commission. https://assets.pc.gov.au/ongoing/report-on-government-services/2025/housing-and-homelessness/rogs-2025-partg-overview-and-sections.pdf#page=5