Federal Government Guarantees for Single Parents
Separating and facing the housing market as a single parent can be an overwhelming and stressful experience, particularly when progressing through a property settlement with your ex. Your household income has essentially halved, which for a lot of families could mean facing relocation to a new home. A new scheme introduced by the Federal Government may assist families in this exact situation. Let’s look more at Federal Government Guarantees.
As of May 2021, Perth’s rental vacancy rate was at a low of 1%, opposed to May 2020, when the vacancy rate was at 2.3%. According to REIWA, a balanced market is generally represented by vacancy rates between 2.5% and 3.5%.
With vacancy rates so low, one of the only alternatives to homelessness for those who are not able to find a rental, is to become a homeowner. This is not such a simple process for many West Australians, particularly those in single parent homes. A survey conducted by The Household, Income and Labour Dynamics in Australia, revealed that as of 2018, the median income of single-parent families is $34,000 per annum. Obtaining a mortgage and saving enough money for a deposit is no walk in the park on an income such as this.
Fortunately, the Federal Government has acknowledged this issue and recently revealed as part of the federal budget, a new scheme called the Family Home Guarantee (or referred to as Federal Government Guarantees), which aims to assist single-parent families to purchase a home. The scheme, which is administered by National Housing Finance and Investment Corporation (NHFIC) on behalf of the Australian Government, essentially operates by the NHFIC guaranteeing 18% of the value of the home to a participating lender. The key eligibility being that the borrower has a minimum of a 2% deposit and, in Western Australia, the home must not exceed $500,000 in Perth and regional centres, with the rest of the state not exceeding $400,000. The scheme commenced operation on 1 July 2021, and works on a first come first served basis, so if you or someone you know might qualify it is time to act now!
A more in depth overview, including all eligibility requirements of the Family Home Guarantee can be found here.
This may seem like the solution single parent families have been searching for, however, it may be more of a step in the right direction rather than a solution. Only 10,000 applications for the next four financial years will be accepted. As of 2016, there were 93,344 single-parent families in Western Australia, with 959,543 Australia wide. This means that the scheme is only available to approximately 1% of single parent homes each year across Australia.
It seems hard to fathom that assisting 1% of at need families will make a substantial change in the issues faced by single-parent families, particularly with the rental crisis currently faced by West Australians. However, for those lucky few who are eligible, it will likely make a big difference.
Another way to make a big difference for separated parents is for them to get a property settlement as quickly and seamlessly as possible, which can give back some autonomy and direction to people who may feel a bit at sea.
At Lynn and Brown Lawyers, our Family Law Team takes a practical approach to assist our clients who are going through a property settlement and attempting to navigate life as a single-parent family. For more information on your financial options when separating from your partner, contact our office to book an initial appointment with one of our Family Lawyers on 9375 3411.
ABOUT THE AUTHOR: Abbish is dedicated to assisting her clients navigate through their Family Law journey to achieve the best possible outcome. Abbish is passionate about building quality relationships with her clients to not only assist them through their journey but to familiarise themselves with their legal options.