Contents
Income Related Rent debt : Contents

Establishing Income Related Rent debt

There are specific circumstances that can result in an Income Related Rent debt being established. Income Related Rent debt may be created when a client has a rate of Income Related Rent calculated lower than they were entitled to.

This may be due to:

  • client not advising of a change in their circumstances, for example, an increase in their assessable income
  • undeclared information at the time of assessment or at any time during the tenancy, for example, partner's assessable income
  • fraud, for example, undeclared income (self or partner's), subletting, falsified or deliberately misleading information

Period over which to calculate the debt

Income Related Rent debt is established from 61 days after the date of the change in circumstances until the day before the client starts paying the correct rate of Income Related Rent (that is the day before the rent effective date).

Debt is established from 61 days after the date of change because there are specific notice periods for the client, before the amount of Income Related Rent they must pay to their housing provider increases.

Exception for fraud debt

Income Related Rent debt established due to fraud is calculated from when the client first started paying Income Related Rent, or the date the fraud started to the period fraud ended or the day before the rent effective date (whichever is applicable).

Debt established as the result of a fraud investigation not included in the 61 day period.

Income Related Rent debt not established

Income Related Rent debt is not established if the:

  • change notified makes no material difference to the social housing provider and the rent change is not applied
  • debt calculated is under $500
  • rent change is not applied (for example, tenant dies or ends the tenancy before the rent effective date)
  • debt was caused wholly or partly due to a mistake the debtor did not intentionally make

Repayment of Income Related Rent debt

Recovery of Income Related Rent debt can start once the debt has been established and the rent charge date confirmed by the housing provider though the new rent is effective from a future date.

For more information see:

Legislation

  • Increase in rent due to change in tenant's circumstances section 74 Public and Community Housing Management Act 1992
  • Increase in rent due to change in tenant's circumstances section 94 Public and Community Housing Management Act 1992
  • Recovery where rate of rent too low section 127 Public and Community Housing Management Act 1992
  • Debts caused wholly or partly by errors to which debtors did not intentionally contribute regulation 208 Social Security Regulations 2018
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This is the date the housing provider charges the rent. It does not change; it is a regular day of every week or fortnight.

Note that the rent effective date of an increase in rent is aligned with the charge date.

The 61-day period ensures, when a tenant has a change of circumstance, any increase in their Income Related Rent cannot take effect until at least 61 days after the date that the change in circumstances occurred (regardless of when the change of circumstance was notified or discovered). The 61-day period is counted from the day after the day that the change of circumstances occurred, and the 14-day notice period is ...

The rent effective date is the one-off date on which an increased rate of Income Related Rent is charged.

The rent effective date is aligned with the next charge date.