The forgotten 660,000 locked out of home ownership

Imagine two people in their 30s, Lee and Sarah. Both want to acquire their first home. They’ve saved a deposit of A$70,000 each and want to buy the same type of apartment in the same block.

Lee is able to buy off the plan with a mortgage and receive a First Home Owner Grant. Sarah is not.

What’s the difference? Sarah could be any one of 660,000-plus Australians with an intellectual disability.

Barriers at every turn

People with intellectual disability face so many barriers to finding a home of their own that it’s hard to pick one.

Rates of unemployment and underemployment are high. Only 23% are wage or salary earners, and around one-third of these work for less than 15 hours per week.

And pay rates, according to the Australian Human Rights Commission, are “extraordinarily low”. In other words, a mortgage is largely off-limits.

For most, family support then becomes a precondition for acquiring a home. But, if family earnings have been negatively affected by their supporting responsibilities, financial assistance may not be possible.

If funds are available, one option is to create a family trust. For Sarah, a family member could acquire the apartment and act as a guarantor on a mortgage. However, unlike Lee, Sarah couldn’t get the first home owner and stamp duty concessions, which are not available under a family trust arrangement.

On the other hand, she could get Commonwealth Rent Assistance, as she would count as a renter not an owner.

Another option is for Sarah’s family to set up a “special disability trust”. This would enable her to have access to first home owner concessions, although that would require confirmation from the revenue office of the relevant state or territory.

Even then, opening a special disability trust is onerous. It requires specialist legal and accounting advice. Annual fees and reporting requirements would quickly outweigh any first home owner concessions. Further, the beneficiary can’t pay rent to the trust, which would otherwise serve as a proxy for servicing a mortgage.

A third option is to help Sarah buy a home in her own name. However, many people with intellectual disability are unlikely to reach the threshold of mental competency required under current law. The person may then need to be placed under guardianship or trusteeship.

This raises a host of human rights concerns and has the potential to further disempower the person. First home owner concessions may be available to guardians on the person’s behalf, depending on the state or territory. But, again, discovering this information tends to require specialised legal advice.

Victoria has the unusual option of appointing “supportive attorneys”. The supporter doesn’t take over decision-making, but instead helps the person by gathering information. This can be a way to avoid removing legal capacity. Yet, it appears, supportive attorneys cannot assist with the acquisition of property.

In short, all options come at a significant cost to the person or their family.

The one measure that is possibly useful for Sarah – claiming rent assistance for a property owned by a family trust – appears to exist by accident rather than design.

Unequal and a waste of taxpayer dollars

The lack of support for acquiring a home drives people with intellectual disability into group homes, either state-run or for-profit.

While these facilities may be acceptable for some, for many they perpetuate what Gerard Goggin and Christopher Newell describe as “social apartheid”. They also make people vulnerable to abuse and marginalisation.. Nowhere is this more evident than on the ABC’s Four Corners report this week.

Group homes are also expensive. In New South Wales, the average total cost to house a group-home resident, according to the Social Policy Research Centre, is $137,000 per year. That is $2,634 per week.

Ask most people with intellectual disability and their families to suggest better ways to spend $137,000 per year, and I’m sure they’ll have suggestions for wiser public spending.

Current mindsets are fixated on congregate-care models, such as group homes, as well as highly professionalised models that cost enormous amounts.

Social housing is another option, but Sarah would have to join the nearly 200,000 Australians on a waiting list. Even if she did manage to get a home this way, it is questionable whether being congregated with other disadvantaged groups will improve her chances of social inclusion.

No wonder people are seeking alternatives.

Low-cost and no-cost solutions

As a starting point, state and federal governments could easily provide clear information about the various options available to people with intellectual disabilities who wish to acquire a home. People shouldn’t need law degrees to know their options.

Procedural equality could be improved by giving access to first home owner concessions to people with a disability who acquire a home through a family trust. For those needing funds for a mortgage, government-subsidised co-ownership schemes could be a great help.

These solutions should not replace efforts to improve employment rates, access to mortgages and all the typical pathways to home ownership. To help open up these pathways, people with intellectual disability would need to be able to buy a home with support and safeguards.

Funds should be re-invested from congregate care to the ongoing costs of supporting people with an intellectual disability to live in their own home.

Housing policy has tended to overlook home ownership for people with intellectual disability, which suggests the “soft bigotry of low expectations” is at play.

Barriers to housing for people with intellectual disability don’t seem to have been driven by malice. Instead, these barriers emerged from countless decisions not to afford them equal opportunities. Each barrier on its own seems unfortunate; together they appear tantamount to neglect and discrimination.