The Victorian Government has introduced rent relief grants for eligible tenants experiencing rental hardship as a result of the coronavirus (COVID-19) pandemic.
The problem is, most tenants and landlords don’t really understand what this involves, so let’s have a look at some of the key aspects provided by the government.
In this article I’ll explain some of the things you need to know by providing information from the Victorian government.
What is the rent relief grant?
The Victorian Government has established an $80 million rental assistance fund to provide rent relief payments of up to $2000 to Victorians experiencing rental hardship due to the coronavirus (COVID-19) pandemic.
The one off grant is specifically for tenants living in their primary residence to help them maintain safe, secure and stable accommodation.
The grant is administered by the Department of Health and Human Services (DHHS) and is paid directly to the tenant’s agent or landlord to contribute to the tenant’s rental payments, under their new rental agreement.
What should I do if I can’t afford my rent?
If you are unable to pay your rent due to financial hardship, in the first instance you should contact your landlord or property manager as soon as possible to negotiate an alternative arrangement such as rent reduction.
When you reach an agreement, make sure it’s in writing and lodge the agreement with Consumer Affairs Victoria.
You may then be eligible for a Rent Relief Grant.
Who is eligible for the grant?
Eligibility for the grant is determined by DHHS.
There are two factors related to reduced rent agreements that may affect eligibility:
- To be eligible for the grant, a reduced rent agreement must have been lodged in writing with CAV or the parties must have gone through our dispute resolution process to reach a reduced rent agreement.
- Deferral of rent is not considered a rent reduction and therefore, does not meet the eligibility criteria.
The grant will assist renters in Victoria experiencing financial hardship due to coronavirus (COVID-19), who have, or will shortly have, a bond registered with the Victorian Residential Tenancies Bond Authority.
To be eligible for the grant you will need to have registered a revised rental agreement inclusive of a rental reduction or gone through mediation.
Deferral of rent is not considered a rent reduction and therefore does not meet the eligibility criteria.
Your household income must be less than $1,903 per week, and you have less than $5,000 in savings and still be paying at least 30 per cent of your income in rent.
There are no citizenship or permanent residency requirements for applicants.
Applicants that may be eligible include casual workers on holiday and working visas, skilled visas, seasonal workers, New Zealand citizens and all refugee and temporary protection visa holders.
How do I apply for a grant?
If you are eligible, you can apply for a grant at any time, however your application can only be processed if you have reached a voluntary agreement for a rent reduction with your landlord and lodged this agreement with Consumer Affairs Victoria, or completed a mediation process through Consumer Affairs Victoria.
In order to apply for the grant, you must provide a current bank statement for every tenant on the lease, in addition to evidence of reduced income for every applicant affected.
If you have lodged your new rental agreement with Consumer Affairs Victoria, you can apply for a Rent Relief Grant online
How is the amount of the grant calculated?
The department will calculate the amount of grant to a maximum $2,000 when they assess an application.
The amount of grant is dependent on the applicant’s income, and the level of reduced rent they are paying.
Where the difference between an applicant paying more than 30% of their income is $77 per week or more, the applicant will receive the full $2,000 grant.
Where the difference between an applicant paying more than 30% of their income is less than $77 per week, the grant will be calculated as 26 weeks multiplied by the amount the applicant is paying more than 30% of their income.
What can the grant be 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 newly negotiated rental payments charged on your account.
The grant should be treated as a deposit amount to the rental balance and has the same effect as if the tenant had made a rental payment.
The grant should not be used as a top-up for the landlord to make up the difference between the previous rent and the reduced rent agreed as part of a rent reduction.
The grant cannot be paid directly to the tenant or used for non-rental expenses, such as utilities or household items.
Will I have to pay the grant back?
You will not have to pay the grant back.
Can the grant be paid directly to an estate agent on behalf of a landlord?
Yes. The grant is a payment made on behalf of the tenant directly to the landlord or to a real estate agent that is acting for the landlord.
The grant is the tenant’s contribution to meeting their rental obligations under the reduced rent agreement negotiated between the tenant and landlord.
This is not landlord relief and should not be used as a top-up for the landlord to make up the difference between the previous rent and the reduced rent agreed as part of a rent deduction.
Is the grant “trust money” as defined by the Estate Agents Act 1980 (the Act) and Regulations?
- Yes, if paid to an agent, the rent relief grant is trust money. The grant is paid as a rent credit by DHHS and is considered the same as a tenant paying rent in advance to the agent.
- The grant should be treated as a deposit amount to the rental balance and has the same effect as if the tenant had made a rental payment.
- The threshold for trust money in s59 of the Act is any money received or held by an estate agent on behalf of any person in respect of any transaction.
Can a tenant use the grant for any purpose?
- No. The grant cannot be paid directly to the tenant or used for non-rental expenses, such as utilities or household items.
What happens if there is a balance of the grant at the end of a tenancy?
- If there is a credit at the end of a tenancy it should be credited back to the tenants as legislation requires.
Can the grant be applied to previous arrears?
- The grant is a credit to the tenant’s account and is related to the period of the reduced rent agreement.
- If the tenant has agreed to a rent reduction with their landlord, the estate agent or landlord cannot use the grant money to make up for the difference between the original rent amount and the recently reduced amount, or for arrears prior to the agreement being entered into.
What happens if the reduced rent agreement between the tenant and landlord has expired or is due to expire soon?
- If the reduced rent agreement has expired, any credit can be used towards the rent after the agreement has expired.
- If the tenant and landlord agree, however, the reduced rent agreement can be extended. This applies to agreements reached privately or through our dispute resolution services.
- The extended agreement should be registered with us, otherwise it may not be enforceable.
For more information about the rent relief grant, please visit the DHHS website.
For more information about the temporary laws introduced to protect tenants and landlords from the impact of the coronavirus (COVID-19) pandemic, visit the CAV website.
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