Rent Deduction Scheme (RDS) deductions 108-08130000

The RDS allows Services Australia (the agency) customers to have their government housing payments deducted from their Centrelink payment each fortnight and sent directly to the appropriate state or territory Housing Authority (HA). This is a free service.

Customers:

• can participate in the RDS voluntarily if they receive an eligible income support payment
• can withdraw from the RDS at any time and have their deductions cancelled. They do not need to give a reason
• will get a letter when their RDS deduction starts, is varied or cancelled

Note: the RDS is similar to Centrepay however, RDS is only used for government housing payments to a state or territory housing authority. Centrepay can not be used for government housing payments.

The RDS was established to increase efficiencies for all HAs and to improve customer service. It is governed by formal agreements between the agency and each of the 8 state and territory housing authorities. The agreement details the responsibilities and services available to each party.

A list of Housing Authority Customer Reference Numbers is available.

Participation in the RDS is voluntary for customers, including those who are income managed. However, some HAs have signing up for RDS as a requirement in their tenancy agreement.

The voluntary nature of RDS is consistent with the 'inalienability' provisions of the Social Security Act 1991, which protects social security payments from being accessed by third parties (such as creditors) against the customer's wishes. It is also consistent with the Australian Privacy Principles (APPs) set out in schedule 1 of the Privacy Act 1988 (Commonwealth).

RDS deductions show on the Payment Instruction Summary (PINS) screen and can be for a customer’s:

• payment of government rent (RNT)
• repayment of HA loans (LON)
• payment of HA arrears (ARR)
• other housing payments (OHP)
• other housing organisation payments (OHO) (Note: ‘OHO’ organisations are community housing organisations. These properties are not government housing properties or managed by a state and territory housing authority)

Note: customers who pay:

• government rent (RNT) to a state and territory housing authority do not qualify for rent assistance unless they are an eligible government sub-tenant
• rent to a community housing organisation (OHO) may qualify for rent assistance depending on the amount of rent paid

Refer to Rent Assistance (RA) for definitions of Community housing organisation versus state housing authority.

Housing Authorities (HA)

Housing Authorities start, vary and cancel RDS deductions by sending the details to the agency electronically.

Customers must contact their local housing authority to start an RDS deduction.

The HA calculates the amount of rent the customer needs to pay based on the income of the household. Then the HA will ask the customer to sign a housing deduction authority form which gives their consent for the agency to:

• deduct the agreed amounts from their Centrelink payment
• transfer the deducted payment amount to the HA

Note: HAs have their own deduction authority forms which are used to collect consent for RDS deductions. The agency does not have a form for RDS.

HAs must make sure their staff understand their obligations for privacy and confidentiality, under the Crimes Act 1914, Privacy Act 1988 and Social Security Act 1991, as set out in the RDS Agreements.

Services Australia

Agency staff:

• can cancel RDS deductions at the customer’s request. See Terminating a Rent Deduction Scheme (RDS) deduction
• cannot start, restart or vary RDS deductions

Program Support Managers from the Third Party Programs Portfolio manage the relationship between the agency and the HA.

The National Business Gateway Confirmation Services provide a helpdesk support service to HAs for technical support and system issues regarding the scheme.

Self-service

Customers cannot start, vary or cancel RDS deductions themselves using self-service or online channels.

Customers can use their Centrelink online account in myGov or Express Plus mobile app to:

• check a summary of all their deductions, including RDS deductions
• get a deduction statement which shows all deductions coming out of their payment, including RDS deductions. This statement can also be requested through phone self-service

Service Officers should encourage customers to check their RDS deductions regularly via self-service to ensure that they are correct.

HAs are required to obtain consent from customers in the form of a Deduction Authority before commencing a Rent Deduction Scheme (RDS) deduction.

In drafting the Deduction Authority, HAs must avoid using any language that suggests mandatory participation in the RDS.

If the tenants are asked to agree to participate in the RDS as a condition for qualifying for housing services, it must be clearly stated that:

• they have the right to withdraw from the scheme at any time without any repercussions
• the decision to withdraw does not constitute a breach of their tenancy agreement
• they will not face any form of penalty or disadvantage for choosing to opt-out

If necessary, where a HA requires participation in RDS as a qualifying condition for housing services, they should be asked to confirm each of the above points in writing.

The RDS Deduction Authority should, at a minimum, contain clauses that are for the most part, in the form as each of the clauses below:

RDS Deduction Authority wording (to be used by HAs)

• I authorise Services Australia to make regular deductions from my/our Centrelink payment. The deducted amount shall be in accordance with the terms of my agreement with [State Housing Authority] and is to be paid directly to [State Housing Authority]
• I acknowledge that should my rent or other agreed-upon amounts change, [State Housing Authority] will notify Services Australia accordingly. The adjusted amount will be deducted from my Centrelink payment starting from the next available payment date
• This authority shall remain in effect for the duration of my tenancy with [State Housing Authority], or until such time as I choose to withdraw it
• I understand that participation in the Rent Deduction Scheme is voluntary and that I can withdraw from the scheme at any time by contacting [State Housing Authority] or Services Australia
• I authorise the exchange of personal information between [State Housing Authority] and Services Australia to the extent necessary for the establishment and ongoing management of my deductions
• I authorise [State Housing Authority] to share my personal information, including [for example, my name, date of birth, etc.] with [third party] for the purpose of [purpose]

Note: HAs may include additional clauses that are relevant to their jurisdiction, however they must not imply that participation is mandatory.

If a customer signs a Deduction Authority electronically, it must also include:

• I confirm that the electronic signature in this consent represents my signature
• I consent to signing the form electronically and I confirm that my signature is legally binding

Cancellation or suspension of payment

When a customer's Centrelink payment is cancelled or suspended, the RDS deduction instruction is kept current for the standard 'grace' period (13 weeks for all payments). If the customer returns to payment within that period the deduction instruction will be re-activated automatically and pays to the HA from the customer's next pay day.

The deduction that recommences will not include any arrears that may be owed. Customers must contact their relevant HA to organise repayment of rent owed for any missed rent payments.

If the customer does not return to payment within the grace period of 13 weeks, the deduction will cancel. The HA will receive a termination advice (ITI) on their next deduction report for the instruction.

Reduced or nil rate of payment (CZR)

When a customer’s Centrelink payment is reduced or nil, this may result in part or none of their RDS deduction being paid. The amount of RDS deduction that can be paid will be dependent on other deductions the customer has set up and the priority order of their deductions. Customers must contact their housing authority to organise paying any missed rental payments.

Customers who receive Centrelink payments weekly can have RDS deductions taken from their payment however, the deduction is made from their payment on a fortnightly basis.

When a customer transfers from one eligible income support payment to another, all RDS deductions for the customer which exist under the previous income support are automatically transferred to the new payment.

There are some exceptions however where there is no automatic transfer of RDS deduction instructions. This includes when a customer transfers from:

• JobSeeker to Age Pension
• Family Tax Benefit (FTB) to an income support payment (or vice versa)

When a Service Officer processes a new claim or inter-benefit transfer of payment for a customer with existing RDS deductions they must check the Payment Instructions Summary screen (PINS) to check if RDS deductions are automatically transferred to the new payment.

If an RDS deduction has not automatically transferred to the new payment, and it is an eligible payment from which RDS deductions can be made, the customer must be advised to contact their housing authority to restart the deduction and arrange to pay for any missed rent amounts.

A hierarchy is applied to all deductions from Centrelink payments. This is as follows:

• weekly payment shortfall
• weekly payment carryover
• advance payment recovery
• overpayment
• Financial Supplement Loan (FSL)
• child support liability
• voluntary tax payments
• government housing deduction (RDS)
• other deductions (including Centrepay)

There is also a sub-hierarchy applied to Rent Deduction Scheme (RDS) deduction types. This is as follows:

• Rent (RNT) or Other Housing Organisation (OHO)
• Housing Authority Loan (LON)
• Housing Authority Arrears (ARR)
• Other Housing Payments (OHP)

The number of HA deductions a customer can have under RDS is determined by the following:

• A customer can only have one current instruction for each deduction type (RNT, LON, ARR, OHP, OHO), per benefit group, for any one HA
• There can be more than one current Arrears (ARR) or Other Housing Payment (OHP) instruction, but these must be for different HAs or different benefit groups. When there is more than one ARR or OHP the following hierarchy must be applied:
• HA in the state or territory where the customer resides
• By date of effect, with the earliest date first

Services Australia receives S74 revenue (commercial receipts) for the Rent Deduction Scheme services from all Housing Authorities.

HAs are charged a transaction fee of $0.39 (plus GST) for each successful RDS transaction. The HAs are not permitted to pass this fee on to Centrelink customers residing in government housing.

HAs receive quarterly invoices from the agency for transaction fees accumulated (billing in arrears) for RDS. Payment of invoices is required by HAs within 30 days.

Occasionally, overpayments are made to HAs. RDS refunds are not to be made by Centrelink and customers must contact their HA.

If a customer advises that an RDS deduction was taken from their payment without their consent they will need to contact their HA to discuss a refund.

Housing Authorities must notify of changes to the information it previously provided to the agency. Some of the changes may include:

• ABN change
• new business or trading name
• address and contact details
• adding or changing Authorised/Contact Officers

An authorised officer of the HA must provide the details of the changes in writing or verbally. The Third Party Programs Portfolio will update the changes on the HA’s record. (Note: there is no agency form or business application that the HA needs to complete to change their business details).

More information is available in Updating or adding business details for Deduction and Confirmation programmes.

There are a number of rules and requirements to be followed when Housing Authorities (HA) lodge RDS files to the agency for processing. This includes the following:

• Each HA must only submit one RDS file for processing each business day

Note: if a previous processing day is missed the HA must still only submit one only file for the next scheduled processing. Submitting more than one RDS file on any single day will cause all RDS processing for all Housing Authorities to fail.

• The RDS file must be lodged by 12pm AEST/AEDST
• If a Housing Authority is not going to submit an RDS file for processing (for any reason) they must give prior notification to the National Business Gateway - Confirmation Services Helpdesk. Failure to notify will cause all RDS processing for all HAs to fail
• If there are no transactions for a particular day the relevant HA must:
• ask the Helpdesk for the processing job to be cancelled, or
• submit a ‘blank file’ with a header and trailer record with the correct sequence number and a transaction count of zero
• There is no RDS file processing on public holidays. For national and local public holidays, the Helpdesk will email all Housing Authorities to confirm if they will be lodging a file on that day