Confusion over Victoria’s $2,000 rental relief package
- By Peter Gordon
- •
- 06 May, 2020
Victoria’s $2,000 rental relief package - Conflicting information from Consumer Affairs Vic (CAV) and the Department of Health and Human Services (DHHS)
We understand that in a short time frame many steps and measures have been put into place as COVID-19 affects the financial position of landlords and tenants. However, it appears that some government departments are not fully communicating with each other.
Who is eligible for the grant?
To be eligible for the grant you will need to have registered your revised rental agreement with Consumer Affairs Victoria or gone through mediation, have less than $5,000 in savings and still be paying at least 30 per cent of your income in rent. Your household income must be less than $1,903 per week*
What can the grant he used for?
The rent relief grant is specifically for the purpose of supporting eligible people experiencing rental hardship. The payment will be made directly by the Department of Health and Human Services to your landlord as a credit towards your rental payments. The rental relief payment is in addition to the rental reduction negotiated between you and the landlord.*
The grant cannot be paid directly to the tenant or used for non-rental expenses, such as utilities or household items.*
What is the problem
We’ve again received some conflicting information from Consumer Affairs Vic (CAV) and the Department of Health and Human Services (DHHS). Whilst CAV is directing that the grant can cover the shortfall in rent, DHHS, who process and pay the grant are directing that these payments are for the tenant; to assist in making payment of the reduced rental amount.
Who gets what?
You, the landlord has negotiated to reduce your tenants rent from $500 per week to $350 per week for 6 months. That is a loss to you of $3,900.
Consumer Affairs Vic (CAV) is directing that the grant covers the loss of rent for you, the landlord. So, the $3,900 rent reduction loss is reduced to $1,900 as you will receive the $2,000 rental relief package.
Department of Health and Human Services (DHHS) is stating the grant is to assist the tenants to pay their reduced rent of $350 per week over a 6 month period. With the tenanting receiving the $2,000 rent relief package that gives them an extra discount on their rent of $79.62 per week. The true amount of rent they are paying is now $270.38 per week.
Under the DHHS scenario the landlord is out of pocket $3,900. Landlords and tenants require clear clarification of who benefits from the $2,000 rental relief package. By doing this landlords and tenants can better negotiate between themselves and hopefully reach a fairer outcome.
If you are unsure how to manage your investment property through COVID-19 we are here to assist. Please reach out and call Peter 0401 214 134 or email peter@investoproperty.com.au . Alternatively you can schedule a Zoom Meeting here.
For more information please review the link Coronavirus Rent Relief Grant VIC
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