Rent Subsidy Process

Social Housing Policy (Non Commercial Obligation – Social Cost and Rent Subsidy)

The Board has since 2010 reviewed rent charges for 11 estates (Charles St, Kalabu, Kia St, Levuka, Namaka, Mead Rd, Simla, Newtown, Tuatua, Nadera and Macfarlane Rd) and new rent charges were applied progressively.  This rent review exercise will continue in 2013 (Votua and Natabua).The subsidy criteria was also reviewed in 2010 and applied to these estates stated above. A property valuation of all PRB properties was undertaken to determine market rent charges and claimed the non-commercial obligations (social cost) from

Government’s annual subsidy grant. Subsidy is allocated according to the subsidy agreement between the Line Minister and the Board. New subsidy criteria (2010) and rent charge would only be applicable to these 11 estates where general renovation has taken place.

It involves also the distribution of approximately $610,000 as rent subsidy according to the 1999 and new 2010 subsidy criteria and the balance of $390,000 distributed as being non-commercial obligations of charging market rent on existing rental units.

The 1999 and revised 2010 subsidy criteria are provided herein as follows:

1999 Subsidy Criteria

Average Gross Weekly household Income $0 – $64   5% of Income

Average Gross Weekly household Income $65 – $80  10% of Income

Average Gross Weekly household Income $80 – $100  15% of Income

Average Gross Weekly household Income $101 – $125  20% of Income

Average Gross Weekly household Income $126 – $150  25% of Income

These criteria are still applied to all estates where rent has not been reviewed thus far.

2010 Subsidy Criteria

Average Gross Weekly household Income $0 – $80   5% of Income

Average Gross Weekly household Income $80 – $100  8% of Income

Average Gross Weekly household Income $100 – $125   11% of Income

Average Gross Weekly household Income $126 – $150   14% of Income

Average Gross Weekly household Income $151 – $175  17% of Income

Average Gross Weekly household Income $176 – $200  20% of Income

These criteria would be applied to the 11 estates where rent has been reviewed from 2010 through to 2012 and will continue to apply to all other estates after rent review process.

It has been noticed that with the increase in rent charges, more tenants are subsidised now with rental subsidy.  However tenants need to produce evidence where they cannot pay these new rent charges before they qualify for subsidy assistance.  The non-commercial obligations are passed on to tenants and compensated by Government via rent subsidy.  Some 40% of the Board’s tenants are considered financially disadvantaged and to whom Government had subsidised their rent in past years.

Rental estates where new rent charges have not been applied will continue with the 1999 subsidy criteria and non-commercial obligations claimed from Government grant accordingly.