Productivity Commission finds housing assistance does not deter people from working

A study by the Productivity Commission has found that housing assistance through public housing does not discourage people from working.  The report released last week, Housing Assistance and Employment in Australia, found that far from acting as a disincentive to work, stable housing increased many people’s ability to secure employment. Further, the report showed that involvement in the workforce improved once people moved from the public housing waiting list into secure housing.

The study  looked at the levels of employment amongst public housing tenants and people receiving other types of payment, such as the Commonwealth Rent Assistance (CRA – provided to low income earners in the private rental market) between 2003 and 2013. Over the last six years, the number of people living in social housing decreased while the number of people receiving CRA increased. Although employment was notably lower within the public housing community, the Productivity Commission discovered that this had nothing to do with the type of housing assistance people received. Instead they found that people who live in public housing tend to have other personal characteristics that stop them from working. For example, public housing tenants are more likely to be on a disability support pension, older, and faced significant disadvantage all of which mean they cannot fully engage with the workforce. Once these factors are taken into account, the report shows that the differences in employment rates are very small. As the report notes “It is the characteristics of individuals and not the characteristics of the housing assistance that they receive,that matter to employment”.

While this may seem obvious, the 2015 McClure report into Australia’s welfare system has recommended states charge public housing recipients market rent and the Commonwealth providing them with CRA as a way of increasing participation in the workforce. Given that workforce participation was primarily connected to personal characteristics and not housing assistance, the Productivity Commission found that such a move would be unlikely to improve employment rates amongst social housing tenants.