Terminating a Rent Deduction Scheme (RDS) deduction 108-08130030

Services Australia customers can volunteer to participate in the RDS to pay their government housing payments directly to a state and territory housing authority. They can withdraw from the scheme and terminate their RDS deduction at any time without giving a reason. They do not need an authority form to stop an RDS deduction.

Customer can terminate their RDS deduction by contacting the:

• relevant housing authority, or
• agency in person or over the phone

Customers cannot terminate an RDS deduction themselves through self-service and online channels.

After a customer terminates RDS they must discuss alternative rent payment options with the relevant housing authority. This is to ensure they do not miss their rent payments.

If a customer has terminated their RDS deduction and later decides they want to restart the deduction, they must contact the housing authority and sign a new Deduction Authority. The agency cannot restart an RDS deduction.

The housing authority may stop a deduction on behalf of a customer if they identify the customer should no longer be paying rent. Housing authorities are not required to provide:

• a reason to the agency when submitting deduction termination requests, or
• information as to why the action was taken

Customers need to contact the housing authority if they want an explanation. The customer will receive a letter when an RDS deduction is terminated.

All Service Officers can end an RDS deduction when asked by the customer. However, they should encourage the customer to speak with their housing authority before they terminate their deduction. This is to ensure that they make other arrangements to pay their rent and avoid missing payments.

If a housing authority has system issues and requires help with ending a current RDS deduction, they will contact the National Business Gateway – Confirmation Services helpdesk.

Note: the agency is not legally able to terminate an RDS deduction without advice from the customer or the relevant state and territory housing authority.

Customers may contact the agency regarding termination of RDS deductions related to housing transitions.

This can occur when housing authorities transfer the tenancy management of government properties to a (non-government) community housing provider. If this happens it means that customers will no longer pay their housing authority government rent liability via the RDS. The customer’s rent obligation will transfer to the community housing provider and they can pay through Centrepay deductions. These customers may also become eligible for Rent Assistance (RA).

If a transition occurs, Services Australia works with housing authorities and community housing providers to end existing RDS deductions, commence new Centrepay deductions and RA on behalf of affected customers.

Allowing community housing providers to start Centrepay and RA on behalf of a customer is voluntary. Some customers may choose to contact the agency themselves to apply for RA or set up a Centrepay deduction.

During the housing transition period, customers who are being transitioned will receive:

• an RDS cancellation letter
• a Centrepay deduction commencement letter
• an RA commencement letter

If a customer contacts in relation to a housing transition, refer them to their community housing provider to discuss. This includes if a customer wants to discuss changes to their deduction arrangements or management of their tenancy from a housing authority to a community housing provider in their state.

Occasionally, RDS overpayments are made to housing authorities. The housing authority has the responsibility to refund any RDS overpayments to the customer. RDS refunds are not to be made by Centrelink.

If a customer contacts the agency to discuss an RDS overpayment, tell them it may take up to 8 days for their RDS deduction to stop, although legally it stops from the day the customer withdraws their authority. This can result in the housing authority receiving extra rent payments from the customer through RDS. Tell the customer to contact their housing authority to discuss any RDS overpayments.

When an income support payment ceases, a grace period applies to deduction instructions for 13 weeks.

If the customer’s payment:

• is restored during the grace period the deduction instruction remains valid
• is not restored the RDS deduction is terminated

If a customer has an RDS Rent (RNT) deduction and they move interstate, the change of region from one state to another will automatically terminate the deduction. If the deduction is still needed, the housing authority must send a new instruction.

Any other RDS deductions the customer has, for example, LON, ARR or OHP will not cease automatically, and a Service Officer should terminate these manually if required.

When a customer has an existing RDS deduction in place, and is placed onto Income Management, the rent amount is deducted from the customer's discretionary funds by default, not their income managed funds. The agency should engage with the customer if possible, to determine if they want to pay their rent from their:

• discretionary funds
• available income managed funds, or
• a portion from both available funds

Termination of the existing RDS deduction may be required if the customer chooses to pay their rent payment from their available Income Management funds.

RDS deductions are voluntary for all customers including those who are income managed. All customers are able to terminate their RDS deductions at any time without giving reasons. Under no circumstances should a Service Officer refuse to terminate an RDS deduction. For more information, see Updating an existing Rent Deduction Scheme (RDS) deduction for a customer who has commenced Income Management.