Dear Applicant or Approved Participant
Changes to the National Rental Affordability Scheme
The Government has amended the National Rental Affordability Scheme Regulations
2008 to improve the integrity and administration of the National Rental Affordability
Scheme (NRAS). The amendments will commence on Tuesday 23 September 2014,
subject to their being registered on the Federal Register of Legislative Instruments on
Monday 22 September 2014.
Trading of incentives and improved delivery
At the National Housing Conference on 1 November 2013, the Minister for Social
Services, the Hon Kevin Andrews MP, identified that he had concerns with the practice
known as the “trading of incentives” and that he was “exploring a ‘use it or lose it’
approach with NRAS incentives. If adopted, this would involve taking a harder line to
changes to promised delivery dates, locations and dwelling types to further incentivise
delivery being on time and to the standard expected”. At that time, the Minister sought
the views of those who might be affected, before making changes to the operation of
the Scheme.
The changes the Government has now introduced come into effect in two stages.
First, there will be a three month transitional period (which ends on the day three
months after the commencement of the amendments) to allow Applicants time to
prepare for the new requirements of the Scheme. During and subsequent to this period,
any applications to vary the dwelling location, style, size, special attributes or agreed
rental availability date will also require the disclosure of all commercial arrangements
associated with the variation being sought.
Second, at the conclusion of the transitional period, no further applications to vary the
location or style of dwellings will be considered (with the exception of variations to
locations of dwellings necessitated by natural disasters). Only one further change to the
agreed rental availability date may be requested, and only for a maximum of three
months from the current agreed rental availability date.
In both stages, the Secretary will not be able to agree to extend the agreed rental
availability date for rent beyond 31 July 2015 for reservations of allocation offered under
the 2013 Shovel Ready funding round, or 30 June 2016 for all other reservations of
allocation (i.e. those offered under funding rounds one through four).
After the transitional period ends, provisional allocations will be made in respect of
dwellings that are not made available by the agreed rental availability date. This
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effectively commences the ten year incentive period from the agreed rental availability
date, although incentives will not be payable until the dwelling is available for rent and
all the conditions of allocation are satisfied.
Annual election of incentive for charities
The Minister also foreshadowed at last year’s National Housing Conference that he was
considering greater flexibility might be needed in relation to the way charities receive
their NRAS incentives. Under the amended Regulations, Australian Government
endorsed charitable institutions will be able to make an annual election to receive their
incentives either as a tax offset certificate or cash payment.
2013-14 Payment
I know there are concerns with the delay in the processing of the 2013-14 NRAS
payments. The provisions of the Regulations relating to the payment of incentives
provide decision makers within the Department with very little flexibility if conditions of
allocation are not satisfied, even if the non-compliance is very minor or technical in
nature. A sizable number of claims for payment would be rejected under the current
Regulations.
The Minister has agreed-in-principle to amend the Regulations to address this matter,
and amendments to the Regulations are being drafted and (subject to the agreement of
the Governor General in Council) are likely to come into effect in the next four or so
weeks. The Department is holding off making payment decisions until this second
tranche of amendments to the Regulations have commenced.
We will be requesting further information from some approved participants in advance of
these regulatory amendments in order to expedite processing of payments once the
amendments have commenced.
For more information
I have attached a factsheet that will provide you with more detailed information about
the above amendments and how they will be implemented. This fact sheet will be
available on the NRAS webpage (www.dss.gov.au/nras). I expect the amending
Regulations will be available on the ComLaw website (www.comlaw.gov.au) from
Monday 22 September 2014.
If you have any questions or concerns, please send an email to nras@dss.gov.au and
we will provide you with more detail.
Yours sincerely
John Riley
Branch Manager
National Rental Affordability Scheme
19 September 2014
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