Media Release: The eligibility trap that’s discouraging Western Australian renters from working

A new report reveals Western Australian renters are turning down work and avoiding job searching altogether out of fear of losing their social housing or waitlist place.

‘The Eligibility Trap’ report was commissioned by Shelter WA and prepared by the Australian Housing and Urban Research Institute (AHURI).

It examines the impact of WA’s income eligibility limits for social housing, which determine how much a person can earn to stay eligible for social housing. In Perth, this is just $551 per week for a single person – just above the disability and age pension and about half the minimum wage.

This is leaving many Western Australians stuck in an affordability gap where they earn too much for social housing, but not enough to afford the private market.

WA’s income limits have been effectively static for over a decade and are the lowest in the country, sitting below Queensland ($609), NSW ($795), Tasmania ($797), Victoria ($797 – $1,173), SA ($882), the ACT ($925-$2,313) and the NT ($1,114) at the time the report was written.

The report, which includes a survey of about 180 WA renters living in social housing or on the waitlist, found the overwhelming majority want to work however:

The report also shows many tenants have in-demand skills that the labour market is missing out on including community and social services, as well as trades, building and mining.

Tenants responding to the survey described feeling trapped in poverty. Some said they were evicted or removed from the waitlist after taking up short-term or casual work, subsequently becoming homeless.

Others said they cannot afford healthcare and medication because they must keep income low to  remain eligible for housing, and parents struggled to meet their children’s needs.

Tenants who filled out the survey said: 

Modelling in the report shows an income cliff for people in social housing who take up employment. Someone on a Jobseeker payment in Perth who takes up part-time hospitality work and loses their place in social housing is left $239 worse off than if they did not work at all and stayed in social housing.

Working only becomes a financially viable alternative to social housing when earning a single annual income of $98,400-$104,000.

Shelter WA CEO Kath Snell said: “WA has the lowest income eligibility limits for social housing in the country, and it’s trapping people in poverty and unemployment. While the cost of living continues to rise, these limits have remained largely static in real terms for over a decade.

“Renters face an impossible choice – work and risk losing their home, or stay unemployed and go without basics like healthcare.

“Western Australians are turning down work or avoiding looking for a job altogether because earning above the very low threshold means the loss of social housing and the prospect of paying most of their income on private rent, leaving them worse off than if they had never worked at all.

“Many renters living in social housing and on the waitlist want to work but the system discourages it. In WA, working and being forced to leave safe, stable social housing only becomes a financially viable alternative if these renters can earn a six-figure salary.

“Income eligibility limits are punishing ambition, undermining long-term goals like career growth and home ownership. Renters are terrified of eviction if they work a little bit extra to support their families, accept a promotion, or their teenage child gets a part-time job.

“It’s great to see the WA Government overhauling the social housing waitlist for the first time in 70 years. Now is the perfect opportunity to raise the very low income eligibility limits.

“Increasing the income limits stops renters from being in social housing for longer than they need to be. It gives people a chance to transition into other homes, freeing up public and community housing for others who are doing it tough.”

The report found WA’s income eligibility limits are not an effective tool to manage social housing allocation or the waitlist, and that the primary drivers of waitlist length are housing supply (particularly social housing supply), private rental market conditions, homelessness rates and the labour market.

AHURI has made six recommendations including substantially raising and indexing WA’s income eligibility limits.

“This report shows we need a real shake-up of income eligibility limits for social housing in WA,” Ms Snell said.

“We need to raise the income eligibility limits, protect people for a period of time if they take up work, and have affordable housing pathways for people to transition out of social housing.

“Social housing is life-changing. It provides safe, secure, affordable homes for Western Australians who are priced out of the state’s sky-high private rental market.

“WA needs much more social housing but we must make sure people aren’t trapped in poverty once they get there.”