Chapter 1: Arrears
October 2017
Revision history
Version / Amended section / Effective / Details1.0 / October 2017 / Incorporation of version control table
Accessible format
More information
To find out about housing options visit the Housing website<http://www.housing.vic.gov.au> or contact your local Housing Office <http://www.housing.vic.gov.au/contact-a-housing-office>.
To receive this publication in an accessible format contact Housing Practice and Complex Support <>.
Authorised and published by the Victorian Government, 1 Treasury Place, Melbourne.
© State of Victoria, Department of Health and Human Services, October 2017.
ISBN: 978-1-76069-066-3(pdf/online/MS word)
Available on theTenancy management manual page on Services Providers websitehttp://providers.dhhs.vic.gov.au/tenancy-management-manual>.
Contents
Revision history
More information
1.1Definitions
1.2Policy and Procedures
1.2.1Introduction
1.2.2Aim
1.2.3Rental charges and payments
1.2.4Debt recovery principles
Record keeping
Procedure
1.2.5Debt recovery action
1.2.6Suppressing an account
1.2.7Initial arrears letter
1.2.8Rental arrears of less than $5.00
1.2.9Arrears greater than $5.00
1.2.10Local Agreements
1.2.11Number of Local Agreements
1.2.12Negotiating a Local Agreement
1.2.13Creating an agreement
1.2.14Revising agreement repayment levels
1.2.15Monitoring Local Agreements
1.2.16Broken Agreements
1.2.17Issuing a Notice to Vacate
1.2.18Application for VCAT hearing
1.2.19VCAT hearings
1.2.20Prepare for the VCAT hearing
1.2.21Withdrawing and adjourning, hearings
1.2.22Legal Agreements
1.2.23Renewal of proceedings
1.2.24Order for Possession
1.2.25Order for Possession Agreements
1.2.26Monitoring Order for Possession Agreements
1.2.27Broken Order for Possession Agreements
1.2.28Deciding whether or not to obtain a Warrant of Possession
1.2.29Purchase and issue Warrant of Possession
1.2.30Extend the Warrant of Possession
1.2.31Execute Warrant of Possession
1.2.32Warrant Application Outcome Notices
1.2.33Movable units
1.2.34Tenants in Housing and Support Program properties
1.2.35Rental arrears greater than $10,000
Appendix 1
Rental arrears procedures flow chart
Appendix 2
Text alternative for Rental Arrears procedures
1.1Definitions
Term / DefinitionAssessable Income / Income received by tenants, occupants of movable units and all household members that is used to calculate the rent payable and repayment agreements for the household. Assessable income is listed in the Rental Rebates Policy.
Department / Department of Health and Human Services, formerly described as the department in housing policy and procedure manuals.
Determination / The decision or order made by a Chairperson at VCAT after hearing evidence regarding a tenancy matter. The order is read out by the Chairperson at the hearing and a copy of the order is then sent to both parties.
Eviction / The process of removing a person(s) from the occupation of a property, after a Warrant of Possession has been obtained. The Warrant of Possession is executed by the Police.
Fluctuating Wages / The amount received in wages varies from week to week e.g. nurses, casual employees and seasonal workers.
Future Tenancy Plan / The Future Tenancy Plan (FTP) process replaces the Warrant application briefing process and can also be updated or created once an Order for Possession has been granted.
The FTP process extends upon the previous process in that the HSO is able to document the conversations had between them and the client and senior management about how to proceed with a particular tenancy.
Hearing / A proceeding conducted at VCAT in an attempt to resolve tenancy related issues based on the evidence presented.
Hearing Adjourned / A hearing at VCAT that has been postponed until the next available sitting or for a set period (e.g. three months), during which an application can be made to renew the proceedings.
Hearing Withdrawn / A scheduled hearing at VCAT that has been withdrawn.
HiiP / Housing Integrated Information Program – which is the computer system used by DHS operational staff to deliver housing services.
HiiP workflow / An automated process in HiiP that manages the movement of work to ensure that all necessary actions are completed.
Housing Act 1983 / Legislation that governs the provision of housing assistance and the associated financial framework.
Lapse of Warrant of Possession / The termination of a right to execute a Warrant of Possession because the Warrant of Possession has not been executed before the end of the expiry date.
Legal Action / Where the department has commenced proceedings to have a matter concerning rental arrears determined at VCAT.
Legal Agreement / An order made by a VCAT Chairperson that the tenant repays rental arrears in regular instalments.
Local Agreement / A rental and/or maintenance arrears repayment agreement made between the department and a tenant or former tenant to repay rental arrears in regular instalments.
Make-up Missed Payment / A short term agreement to enable a tenant or former tenant to make up a payment that they have missed making on their Local Agreement.
Non Assessable Income / Income received by tenants, occupants of movable units and all household members that is not included when calculating the rent payable and repayment agreements. Non assessable income is listed in the Rental Rebates Manual.
Notice to Vacate / A legal notice served on a tenant as per section 246 of the Residential Tenancies Act 1997, where rental arrears of 14 days or more have accrued on a tenant’s rental account.
Order for Possession / An order granted by VCAT giving the department the right to obtain a Warrant to evict the occupants and regain possession of the property. The order is valid for a six month period.
Order for Possession Agreement / A rental arrears repayment plan signed between the department and a tenant after an Order for Possession has been granted for the property.
Renewal of Proceedings / The request for a further hearing at VCAT under a current determination. A renewal of proceedings can be requested where a hearing has been adjourned and the tenant has accrued further rental arrears or a legal agreement has been broken.
Renewal of Proceedings Hearing Withdrawn / The cancellation of the application to renew proceedings at VCAT for a case which is under a current determination
Rent Deduction Scheme (RDS) / department charges that are debited from a tenant’s Centrelink payment.
Rental Arrears / Unpaid rent owing to the department.
Rental General Stock (RGS) / Direct tenure rental properties managed by the department.
Residential Tenancies Act 1997 / Victorian legislation that governs residential tenancies outlining the rights and responsibilities of tenants and landlords.
Revised Agreement / A Local Agreement where the repayment amount has been renegotiated as a result of a change to household income.
Self Employed Workers / A household member working for themselves e.g. sub-contractor or taxi driver.
Support / To refer applicant/tenant for support to a community, welfare, health, local government or departmental service or funded service for tenancy support management.
Tenant Contact / A home visit or telephone call. If the tenant is not at home, contact is recognised when a calling card is left at the premises or a message is left on a telephone answering machine.
Tenant Responsibility Maintenance Agreement / A repayment agreement signed between the department and a tenant where liability has been accepted by the tenant for damages caused to the rental property.
VCAT / Victorian Residential Tenancies Tribunal. A legal institution set up to administer a number of Acts. For residential tenancies, the Tribunal administers the Residential Tenancies Act 1997.The Residential Tenancies List of VCAT hears and determines residential tenancy matters.
Warrant of Possession / A legal document issued by VCAT authorising the Police to evict tenants from a property.
1.2Policy and Procedures
1.2.1Introduction
Tenants in public housing are required, under the tenancy agreement they enter with the Department of Health and Human Services (the department), to pay their rent in accordance with the Residential Tenancies Act 1997 (RTA).
The department recognises that from time to time some tenants will experience difficulty meeting their regular rental payments, resulting in either late or missed payments.
Tenants accruing rental arrears are of concern for the department on two levels:
•Tenants with arrears place their tenancy at risk, particularly where the debt level is increasing
•Rent is the main source of revenue for the department. Unpaid rent impacts on the ability to deliver housing services and consequently the ability to assist Victorians with their housing needs.
1.2.2Aim
The department’s Rental Arrears Policy and Procedures aim to:
(a) assist tenants to sustain their tenancy by:
•preventing and reducing rental arrears
•ensuring debts are fully paid
(b) ensure that rent revenue is collected and available for the provision of housing assistance programs
(c) recover possession of the property and terminate the tenancy where rent arrears are not reduced by the tenant or continue to rise following the application of these policies and procedures.
1.2.3Rental charges and payments
The department charges rent on a weekly basis and these charges are applied to tenants’ rental accounts each Sunday.
The department requires all tenants to pay their rent in advance, so that their account does not fall into arrears. As rental charges are applied on a Sunday, rental payments must be made at least one day before the Sunday rental charge.
RTA (s.3) Tenants can elect to make their rental payments weekly, fortnightly or every four weeks, with the amount they pay corresponding to the frequency. For tenants who pay their rent weekly, their payment must be made prior to the next rental charge. For tenants who pay fortnightly the payment they make must place their account two weeks in advance (prior to the rental charge being applied on the coming Sunday).
1.2.4Debt recovery principles
The following arrears recovery principles guide the action taken by the department to recover debt:
•early intervention
•maximising verbal contact and keeping tenants fully informed
•early and ongoing referrals to support services
•escalating action when arrears increase or remain unpaid and the local or Legal Agreement is not being fulfilled by the tenant.
Early intervention
Sustaining tenancies relies on the department taking prompt action to minimise arrears escalation.
The Centrelink Rent Deduction Scheme (RDS) is utilised to assist tenants with a poor payment history to meet their tenancy obligations. RDS provides tenants the maximum opportunity to establish a regular payment pattern in an automated way, enhancing the sustainability of their public housing tenancies.
Early intervention includes initiating preventative action for issues that may result in the tenant missing rental payments, such as making contact with the tenant if they cancel their RDS through Centrelink or where they have not responded to a rebate contact review that may result in their rebate being cancelled.
Other measures include identifying issues which are impacting on the tenant’s ability to pay rent and to link them with services which may assist them (see Early and Ongoing Referral and Support below).
Repayment agreements are negotiated as early as possible for tenants to repay debts owed to the department.
Maximising verbal contact and keeping tenants informed
Whilst the department relies on written communication to inform tenants of any rental arrears, if tenants do not respond and have not had recent verbal contact with the department in relation to their rental situation, a Housing Services Officer (HSO) will attempt to make contact with the tenant by telephone or a home visit.
When contact is made and arrangements to repay the debt have been negotiated, the department will confirm them in writing. The tenant is also fully informed of the future action that the department may put in place if the arrangements are not met.
Early and ongoing referral and support
It is recognised that the reasons tenants fall into arrears are varied.
Where a tenant does not fully pay their rent and their account falls into arrears, or arrears levels increase, the department will initially make contact by letter (initial arrears letter). If the missed payments are not paid by the tenant, a HSO will make contact with the tenant. This can be done by text message, phone call or a home visit.
Contact with the tenant may identify a need for support from a third party. Where this occurs the HSO will discuss this with the tenant, and with their consent will make a referral to an appropriate support agency. In circumstances where support is already in place, and the tenant has consented to the department contacting the support agency, the HSO may make contact with this agency to discuss any concerns in relation to the rental payments and/or the tenancy in general.
Where an eviction is imminent and the tenant has not engaged with the department, in exceptional circumstances the department may involve a support agency without the express consent of the tenant. This can occur if the relevant staff member dealing with the matter reasonably believes that this is necessary to lessen or prevent a serious and imminent threat to an individual’s life, health, safety or welfare. Information Privacy Act 2006, Information Privacy Principles (IPP) 2.1(d) (i).
This is a final attempt to sustain the tenancy or arrange alternative housing options in an effort to avoid a serious threat to the tenant or a household member.
In addition, in the case of tenants who may be clients of other programs within the department, regions will have local strategies to identify mutual clients. This generally occurs where the department has obtained an Order for Possession. This identification of mutual clients is aimed at maximising support to assist clients to meet their tenancy responsibilities and avoid further action that may lead to eviction.
Referrals if significant concerns for wellbeing of child or child is in need of protection
Where Housing staff are satisfied that an eviction raises significant concerns that a child is in need of protection or there are significant concerns for their wellbeing, discuss this with a supervisor or manager. The matter may then be reported to the local Executive Officer responsible for public housing who will liaise with the Child Protection Service in the region if they determine the matter should be reported.
Individual regions may have protocol agreements with the local Child Protection Service for notifications of concerns regarding the wellbeing of a child or to inform them of decisions made on behalf of the Director which may impact on a child (e.g. when an eviction is arranged). A report may also be required under the department’s Incident Reporting Instructions.
Reporting may occur in the following circumstances:
•any person may make a report to the Secretary, Department of Health and Human Services if they have a significant concern for the wellbeing of a child. Children, Youth and Families Act 2005 (s.28)
•any person who has a significant concern for the wellbeing of a child may refer the matter to a community-based child and family service. Children, Youth and Families Act 2005 (s.31)
•any person may make a report to the Secretary, Department of Health and Human Services or the Police if they believe on reasonable grounds that a child is in need of protection. Children, Youth and Families Act 2005 (s.183)
Where there are concerns that a child is in imminent danger, the Police should be contacted immediately.
The disclosure of personal information is permitted where it is required or authorised by law (including under another Act) i.e.Information Privacy Act 2006 (IPP) (s.2.1 (f))
Record keeping
Procedure
All contact with tenants must be recorded on HiiP, including summaries of text messages, discussions, telephone calls, agreed action dates and home visits. This ensures that other Housing staff will know exactly what is happening with the account and tenancy if they are required to assist a tenant.
This information will also be important if legal action is commenced for arrears recovery.
1.2.5Debt recovery action
When a tenant falls behind in their rental payments, there is a range of action that the department will initiate to recover the debt. The specific action taken for each case will depend on:
•the tenant’s payment history for their current tenancy
•the level of tenant engagement with their local Housing Office to resolve the issue
•the level of debt.
A tenant’s previous tenancy history may also be used to inform the type and level of support required to manage the process of arrears recovery. When contact is made with the tenant to discuss their debt, the ability for them to repay the debt in full will always be discussed as the preferred option.
However where a tenant is unable to pay a debt in full, depending on the tenant’s payment history, and where they are in the ‘debt recovery cycle’, there may be the opportunity to negotiate for the debt to be repaid by instalments. This is referred to as an Arrears Agreement.
There are three forms of arrears agreements and the terms of repayment differ for each:
•Local Agreement
•Legal Agreement
•Order for Possession Agreement.
Obtaining a Warrant of Possession is only ever sought as the last resort, and eviction action will only proceed where all practically available avenues of tenant engagement have failed and the arrears continue to increase and/or the tenant does not meet the terms of their final repayment agreement.
Reviewing other tenancy management details
When contact is made with tenants and there has not been recent contact (e.g. within the last two to three months), the following details should also be checked to ensure the account and payment details are current:
•Reviewing Payment Methods - If the tenant is not currently paying their rent by RDS, provide them with information about this service
•Checking Household Details - Check that household details including income/assets are current (including participation in Income Confirmation through Centrelink)
•Support and Referral – The tenant is made aware of any support or advocacy should they require it. If they do have supports, ensure that details are recorded on HiiP.
If tenant disputes the level of debt
Where a tenant disputes the level of arrears, the department will provide a full statement of charges and receipts for the period in question, and where necessary provide the tenant and/or their support worker or advocate, with an explanation of the statement.