Understanding the roles of housing costs and housing assistance in creating employment disincentives

There is a growing concern and interest in government, and more broadly, in the way that housing assistance and income support systems interact to provide incentives or disincentives for unemployed people to enter paid employment (Industry Commission 1993; Croce 2000). Research outside Australia has highlighted the critical role that housing assistance plays in the decisions that unemployed people make when offered work (Hirsch 1994; Randolph 1994; Giles et al. 1996; Ford, Kempson and England 1996; Wilcox and Sutherland 1997). This research suggests that decisions about moving into paid employment typically involve trade offs between the financial, personal and family benefits expected from participation in paid employment relative to costs in terms of loss of income support payments and impact on personal and family well being. In particular, these studies have pointed to the complex interactions between incomes from paid employment and government benefits, including the combined effect of withdrawal of government benefits and housing assistance, the type and nature of housing costs, and the behaviour of those seeking employment. [Background]