And the problem is only going to get worse, according to the Grattan Institute report.
Two in three retirees who rent in the private market live in poverty, and half of older renters have less than $25,000 in savings.
For the poorest 40 per cent of 45–54-year-olds, home ownership has fallen from 68 per cent in 1981 to 54 per cent in 2021, and many older renters will not have enough in their savings to keep paying rent during retirement as the poorest 40 per cent of renting households between the ages of 55 and 64 have less than $40,000 in net financial wealth.
"Today's low-income renters are tomorrow's renting retirees," the report said.
The report's lead author, Brendan Coates, has urged the federal government to increase the maximum rate of Commonwealth Rent Assistance by 50 per cent for singles and 40 per cent for couples and index the payments.
The federal government increased rent assistance by 27 per cent during the previous two budgets.
But under these changes a single retiree who relies on income support would only be able to rent four per cent of one-bedroom homes in Sydney, 13 per cent in Brisbane, and 14 per cent in Melbourne.
Increasing the maximum rate of rent assistance by $53 a week for singles and $40 a week for couples would provide retirees with enough to rent the cheapest 25 per cent of one-bedroom homes in the Australian capitals, the think tank found.
Boosting rent assistance for all recipients would cost about $2 billion annually, of which about $500 million would cover retirees.
However, the report argues that this could be covered by further tightening superannuation tax breaks, curbing negative gearing—which allows investors to claim deductions on losses—and halving the capital gains tax discount—which halves the amount of tax paid by Australians who sell assets that have been owned for 12 months or more.
"Australia is failing too many retirees who rent," Mr Coates said.
"Only a further substantial boost to rent assistance can ensure that all Australians get the dignified retirement they deserve."
With AAP.
