ASP to take over widened part-rental assistance from housing department | 21 May 2020
By Laura Pillay
Since the onset of the COVID-19 pandemic and the enforcement of measures such as travel bans aimed at stopping the propagation of the virus, a significant proportion of the population have found themselves impacted through loss of income as key economic sectors, most specifically tourism, have come to a standstill.
In a bid to better help persons who are struggling to meet financial obligations, namely, rent on private accommodation, the Ministry of Habitat, Infrastructure and Land Transport (MHILT) together with the Agency for Social Protection (ASP), under the Ministry of Family Affairs, are widening the scope of the part-rental assistance policy under the housing department, and enabling the migration of the service to ASP to cater to all groups, as a means of social assistance.
Providing more details on the amplified policy during a press conference held yesterday afternoon at the International Conference Centre (ICCS), principal secretary for housing Denis Barbe noted an increase in applicants seeking part-rental assistance to cater for loss of earnings and employment, as well as the need to widen the policy to assist as many persons as possible, so as to avert a possible housing crisis, as many risk being evicted, and to provide a safety net to ease the burdens on such families.
As per the amended policy approved by cabinet, three possible groups of applicants are eligible for the assistance, namely an applicant who already owns a house but who cannot make the monthly repayment under the House Purchase (HP) agreement or House Rental (HR) agreement with the Property Management Corporation (PMC), applicants with an active housing application and already on part-rental assistance but who has lost employment or whose partner has lost employment or has lost partial earnings, both of which affects the take home pay of the household affecting their ability to partially pay the rent, applicants who have a housing application but are renting privately and have lost employment or part of their earnings as well as applicants who have taken out a mortgage with HFC but are having difficulty meeting monthly repayments.
“The ministry already had a policy, part-rental policy, which permits us to assist applicants with part of the rent payment on a monthly basis, based on criteria directly associated with the mandate of the ministry, and these were applicants who have applications for housing with the ministry. The policy now is not much different but has been widened to accommodate applicants other than those who have a housing application, and at the same time, we have increased the monthly ceiling slightly from R5,000 to R7,000, because even if President Danny Faure in his State-of-the-Nation address called for landlords to reduce rent prices and went further by announcing a tax cut of 3 percent as of January 2020, the benefits have not been passed on to tenants,” PS Barbe noted.
Initially, in order to benefit from the assistance, applicants are required to contribute 36 percent of their income towards the rent payment, and the assistance is then worked out based on the remaining rent balance, but must not exceed R7,000. For applicants who are not currently employed, the maximum threshold is set at R10,000 for a three-month period, after which the application will be reviewed and possibly renewed based on the applicants’ efforts to seek employment. If the applicant is yet to be employed after the initial three-month phase, the assistance is renewed and capped at R7,000 for the remaining period, not exceeding one year. After one year, the applicant is automatically removed from the system, towards ensuring that the policy is sustainable and to assist other applicants in need.
Persons who are struggling to make monthly repayments either with PMC, HFC and other institutions such as commercial banks, are advised to approach the institution to restructure such repayments while their applications are pending.
According to the chief executive of the Agency for Social Protection (ASP) Marcus Simeon, ASP has recorded a 500 percent increase in applications for social welfare assistance over recent months, as compared to the baseline of 400 applications on average per month, recorded throughout last year. Of the 4,050 applications received by ASP between the month of February and April, a record 2,748 applications were recorded in April, 80 percent of which are from first-time applicants considered to be informal or casual workers, who have experienced some form of loss of income and employment.
“As we are receiving the applications we have realised that there are other dimensions to it and since many have lost employment and many of them are living in rented accommodation, there is the risk that they lose their accommodation and have to come back to the government to seek assistance. So before this happens, this is how the assistance came about,” Mr Simeon noted.
Mr Simeon noted that some persons have urgent needs for such assistance as they await other forms of assistance from the Ministry of Employment, Immigration and Civil Status among others, and the provision for one-time payments has been increased from R5,000, to R10,000, on account that the average monthly rental for accommodation is R12,000.
As of June, applicants can apply for the temporary assistance through the district via the current means for applying for welfare assistance. Applications shall include supporting documentation including the latest pay-slips of all members of the household or bank statements of self-employed persons, a valid rental agreement, documentation of any loans, utility bills as well as the applicant’s National Identification Number. Furthermore, all applicants must give ASP consent to obtain any other relevant information from other institutions on the client as well as from the Housing Finance Company (HFC).
Beneficiaries who were already being assisted under the policy are not required to reapply or renew their applications, as all relevant information has been remitted to ASP to facilitate payments as of June.
“Initially, the ministry did not have a budget line associated with the policy but payments were disbursed by PMC. PMC will make its final disbursement by May 30, and all information regarding applicants currently on the system, landlords and such will be remitted to ASP by latest June 6, although payment for the month of May would have already been settled. As of June 15, all payments will be effected through ASP and ASP together with the ministry have discussed and agreed to the transition,” PS Barbe explained.
The assistance is to be funded through the R30 million budget allocation to ASP under the amended 2020 budget, and ASP forecasts at least R2 million for the one-off payments, for applicants in urgent need and R10 million to R12 million for the assistance until year-end.
Both PS Barbe and CEO Simeon urged that applicants refrain from abusing the system so that applicants who are actually in need can benefit from the assistance.
The part-rental assistance policy was established around 2006, but was in 2018 revised and a new framework established so as to avoid abuses and make the process more transparent. At the time, the housing department under MHILT had just over 300 applicants, at a cost of R7 million annually. Through the establishment of the framework, the department was able to cut down on the number of beneficiaries and as of May this year had a total of 183 applicants, to an amount of just over R5 million. Among the qualifying criteria were that the applicant had to be in employment and must be contributing towards the Home Saving Scheme (HSS).