Examples of effect of changes to market rent rates
The following are examples of the effect when the market rent rate changes for a property:
Example 1
Market rent rate increases, impacts on client as rent is reviewed by housing provider.
Current rates | |
Current calculated rate of Income Related Rent | $183 |
Current market rent rate | $160 |
Current rent charged by housing provider | $160 |
Current rate of Income Related Rent Subsidy claimed by housing provider | $0 |
Effect of market rent rate increasing | |
New market rent rate following review by housing provider | $180 |
New rent charged by housing provider at the market rent rate | $180 |
New rate of Income Related Rent Subsidy claimed by housing provider | $0 |
In this situation the change to the market rent rate has an impact on the client, because the client is paying rent at the market rent rate and the new market rent remains below the last calculated rate of Income Related Rent.
The rate of the Income Related Rent Subsidy claimed by the housing provider will remain at zero.
Example 2
Market rent rate increases, market rent rate change has no impact on client.
Current rates | |
Current calculated rate of Income Related Rent | $90 |
Current market rent rate | $220 |
Current rent charged by housing provider | $90 |
Current rate of Income Related Rent Subsidy claimed by housing provider | $130 |
Effect of market rent rate increasing | |
New market rent rate following review by housing provider | $240 |
Rent charged by housing provider at calculated rate of Income Related Rent | $90 |
New rate of Income Related Rent Subsidy claimed by housing provider | $150 |
In this situation the change to the market rent rate has no impact on the client.
The rate of the Income Related Rent Subsidy claimed by housing provider will increase.
Example 3
Market rent rate increases, impacts on client as rent is reviewed by the housing provider, client can have a rate of Income Related Rent calculated.
Current rates | |
Last calculated rate of Income Related Rent | $180 |
Current market rent rate | $160 |
Current rent charged by housing provider | $160 |
Current rate of Income Related Rent Subsidy claimed by housing provider | $0 |
Effect of market rent rate increasing | |
New market rent rate following review of market rent by housing provider | $190 |
New rent charged by housing provider | $180 |
New rate of Income Related Rent Subsidy claimed by housing provider | $10 |
In this situation the change to the market rent rate has an impact on the client, because the client is paying rent at the market rent rate, however, the last calculated rate of Income Related Rent is lower than the new market rent rate.
This means that the housing provider can charge no more than the calculated rate of Income Related Rent and will claim the $10 difference in Income Related Rent Subsidy.
Example 4
Market rent rate decreases, impacts on client as rent is reviewed by housing provider.
Current rates | |
Last calculated rate of Income Related Rent | $200 |
Current market rent rate | $195 |
Current rent charged by housing provider | $195 |
Current rate of Income Related Rent Subsidy claimed | $0 |
Effect of market rent rate increasing | |
New market rent rate following review of market rent by housing provider | $150 |
New rent charged by housing provider | $150 |
New rate of Income Related Rent Subsidy claimed by housing provider | $0 |
In this situation the change to the market rent rate impacts on the client, because the client is paying rent at the market rent rate. The clients rent would decrease.
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