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Debt Management Policy


Purpose
Legal framework
Outstanding debt
Allocation and transfer with debt* Clause 13(6) of the Public Rental Assistance Program (PRHAP)
* Section 15 of the Residential Tenancies Act (RTA)
New tenancy
Rental arrears
Sundry debt
Prosecution debt
Vacated debt
Third Party debt
Rental Bond Loan
Debt repayment
Statute barred debt
Disputed debt
The ACT Civil and Administrative Tribunal

Purpose

This policy aims to minimise rental arrears in order to maximise the revenue available for housing assistance programs. Rent is the main source of revenue for Housing ACT.

This policy is consistent with the provisions of the Residential Tenancies Act 1997 and the Public Rental Housing Assistance Program.

Outstanding debt

Housing ACT will pursue unpaid monies. This may include rental arrears, tenant responsible maintenance, rental bond loans and third party debt. A tenant is encouraged to pay rent using a range of automatic payment systems.

Refer to the Statute Barred Debt Policy for additional information.

Allocation and transfer with debt

The Commissioner may exercise his/her discretion not to allocate or transfer where an applicant has a debt to Housing ACT from a previous tenancy. All cases will be assessed on an individual basis.

Clause 19 (8) of PRHAP
In considering the exercise of this discretion, issues such as the following would be taken into account;
a. What is the amount of the debt?
b. What are the reasons for non-payment of the debt? This will include consideration of domestic violence as part or all of the reason for non-payment of the debt
c. What has the applicant done to address the reasons for non-payment of his/her debt?
d. What is the applicant's capacity to reduce his/her debt in the future?

Section 15 of RTA
This provision permits Housing ACT to impose a term (which must be endorsed by the ACT Civil and Administrative Tribunal) on a new tenancy which requires the tenant to repay past debt.
Cases where consideration might be given to impose a repayment clause are:
a. Where Housing ACT would not ordinarily rehouse without a repayment condition being imposed;
b. Where Housing ACT agree to transfer with debt (whether at the tenant's request or as a Management Initiated Transfer). This can be used where a debt is considered a barrier to transfer to smaller accommodation.

New tenancy

Under the terms of the Tenancy Agreement rent is payable fortnightly in advance with rent charging periods commencing on Sundays.

Tenants newly entering social housing will be granted an initial rent free period for the remainder of the week during which the tenancy is signed plus one fortnight.

For all other tenancies, tenants are required to pay initial rent for the remainder of the week during which the tenancy is signed plus one fortnight. Initial rent is determined as follows:

  • pro-rata rent (as specified below); plus
  • fortnightly rent payable in advance.

Pro-rata rent is the number of days from the commencement date of the Tenancy Agreement to the end of the rental charge period, multiplied by the daily rental charge. The daily rental charge is the fortnightly rent divided by fourteen (14).

Rental arrears

A tenant is responsible for the regular repayment of rental arrears each fortnight in full and on time, in addition to normal fortnightly rent. Housing ACT will contact the tenant promptly when rental arrears first appear on a rental account to arrange repayment of the rental arrears in an effort to contain any escalation of the debt.

Sundry debt

Sundry debt is other debt associated with a tenancy, such as tenant responsible maintenance charges. This debt will be recovered in the same way as rental arrears.

Prosecution debt

Prosecution debt is where a judgement has been handed down by a Court in favour of the Commissioner for Housing. Housing ACT will pursue prosecution debt through the Magistrate's Court.

Vacated debt

Where a former tenant has a debt to Housing ACT the debt is referred to a debt collection agency, after the tenancy is terminated.

Third Party debt

Third Party debt is where a person owes money to the Commissioner for Housing (eg: part costs for the repairs to a common fence, damage caused to a Housing ACT property by a third party). Third party debt is referred to a debt collection agency for recovery action.

Rental Bond Loan

A Rental Bond Loan is provided to an eligible applicant renting in the private rental market. When a recipient of a bond loan fails to repay the loan within the agreed repayment terms and conditions, the matter is forwarded to a debt collection agency for recovery action.

Debt repayment

Housing ACT may enter into a repayment agreement with a tenant to pay off rental arrears or sundry debts by agreed installments if:

  • debt has been substantiated;
  • the tenant has accepted liability; and
  • payment in full is not a viable option.

A repayment agreement will generally not be offered where there is capacity to repay in full, or where the debt is less than one week's rent. In these circumstances, tenants will be required to pay in full.

A tenant in receipt of rental rebate assistance is required to contribute up to 30% of total assessable household income towards his/her combined rent and arrears payment. Irrespective of the 30% of total assessable household income level the minimum payment is $15 per week. Housing ACT may consider exceptional circumstances.

A tenant on full market rent, entering into an agreement to repay debt is required to contribute 30% of the weekly market rent or a minimum of $15 per week (whichever is the greater amount) towards the arrears payment. This amount must be paid in addition to the weekly market rent.

This amount is subject to periodic review based on that income. The agreed repayment amount is to be paid on a fortnightly basis unless other arrangements have been negotiated and agreed upon by the tenant and Housing ACT. Failure to adhere to the agreement may result in the commencement of legal action.

NOTE: Until the current arrears are cleared and the tenant's account is 2 weeks in advance in accordance with the Residential Tenancy Agreement, Housing ACT may not consider any further agreements.

Statute barred debt

Refer to the Statute Barred Debt Policy for information.

Disputed debt

When debt is in dispute a tenant can request a review by a senior officer within Housing ACT.

The ACT Civil and Administrative Tribunal

The ACT Civil and Administrative Tribunal hears and rules on matters that have not been previously resolved. The tenant is able to seek legal advice and support in this forum. The ACT Civil and Administrative Tribunal also provides an independent review mechanism to a tenant when a debt is in dispute.

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Further Information

For copies of brochures contact Housing ACT

Go to Policy information