Calculation of affordability formula

This formula below is used to determine the client's affordability risk rating.

Client's affordability risk rating formula

Step	Description	Total $
1	Calculate net weekly income (including family tax credit received)	Total A = income including family tax credit received
2	Calculate lower quartile weekly rent in the area the client needs to live minus accommodation income currently received from additional occupants the Accommodation Supplement the client may be able to get	Total B = lower quartile rent minus accommodation income currently received from additional occupants and calculated Accommodation Supplement
3	Subtract Total B from Total A	Total A - Total B = Total C
4	Divide Total C by unabated main benefit if they are getting a main benefit or the benefit that they would get for that household type (including family tax credit) x 100	Residual income %
5	Determine risk rating	Risk rating = X

Note

Best Start tax credit is not included in the affordability formula.
Accommodation income for Step 2 only includes current amounts received from those who are or will be additional occupants.

From 1 July 2023, most types of Child Support are included as assessable income in the client's net weekly income for the affordability formula.

Consider whether risk rating determined by formula is accurate

MSD will need to consider whether the risk rating determined by the formula accurately reflects the client's level of need.

Sometimes 2 or more families apply for social housing together.

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