Paying rent during COVID

On Tuesday 13 July 2021,  the NSW Government's announced  a 60-day eviction ban for tenants who can demonstrate their renting household has lost 25% of their income due to COVID-19 (‘the July 2021 Moratorium’). The Government also announced that it will provide financial incentive to landlords who provide a rent reduction to tenants during this time. 

NEW Protections for COVID 'impacted tenants' - from 14 July 2021

Your rent payments are a fundamental part of your tenancy. Not paying your rent is a breach of your agreement and can lead to a substantial debt and even losing your home if you don't take steps to manage it. Normally, if rent, water usage charges and/or utility charges under a tenancy agreement remain unpaid for 14 days or more, landlords can issue a non-payment termination notice to tenants.

However, under the July 2021 Moratorium, 'impacted tenants' are protected from eviction in certain circumstances. Tenants will not be evicted if:

 (a) you are a COVID-19 ‘impacted tenant’, that is, your household has experienced an income reduction of at least 25% due to COVID-19
 (b) you give your landlord notice that you are a COVID-19 ‘impacted tenant, and
 (c) you continue to pay your landlord at least 25% of the rent payable under the residential tenancy    

To be eligible for the provisions in the July 2021 Moratorium - the period to compare the current weekly household income to show a reduction of at least 25% is the 4 weeks from 29 May 2021. 

For example:

If your household income was

$1000 in the week 29/5/21 to 5/6/21 (Week 1);

$800 in the week 6/6/21 to 12/6/21 (Week 2);

$600 in the week 13/6/21 to 19/6/21 (Week 3);

$800 in the week 20/6/21 to 26/6/21 (Week 4)

Then your average weekly household income over the relevant 4 weeks is $800/week. You are considered an impacted tenant if your weekly household income is now less than $600/week. 

What should I do if I can’t pay my full rent?

If you find that you cannot manage to pay your full rent, you will need to contact the landlord or the agent and let them know that you need to negotiate a rent reduction. You need to be formal and make sure your initial contact, as well as negotiations are in writing so you will have a record of what has happened. We note that to access the protection against eviction under the July 2021 Moratorium, you must continue to pay your landlord at least 25% of the rent payable under the residential tenancy. You can use this template letter to request a rent reduction from your landlord/agent.

When you reach an agreement for a rent reduction with your landlord/agent, it must also be in writing. You can use this NSW Fair Trading template rent reduction agreement to ensure your  agreement for a rent reduction is in writing. 

To help you work out what you can afford or help you consider an offer made by the landlord and what payments options could work for you, you can seek assistance in putting together a budget by speaking with a financial counsellor. See the Financial Rights Legal Centre website or National Debt Hotline for free resources, or to find a free service near you. You might also find the budgeting resources available on the website useful.

Please see the Financial Support section of this Guide for a summary of the available COVID-19 Government payments and other financial resources.

For advice and assistance with negotiating a rent reduction with your landlord, you can also contact your local Tenants’ Advice and Advocacy Service

Rent reduction: Waiver v Deferral

When considering what an affordable rent reduction would be, it is important to remember the difference between a rent reduction in the form of a 'waiver', and a rent reduction in the form of a 'deferral':

Rent waiver

A rent waiver generally refers to the landlord agreeing to not collect rent or only partial rent for a period. The tenant is not required to pay this amount back.

Rent deferral

Rent deferral is a situation where the rent for a period is still payable, but the actual payment is delayed for a period. The tenant has a debt, with an agreed repayment plan that starts in the future. A deferral can be for the entire rent but it is more likely to be for part of the rent. It is important to consider your ability to make future repayments when considering this option.

Deferral/waiver mix

A rent reduction agreement can be for a combination of part waiver and part deferral. If you are discussing this option with the landlord or agent ensure you are clear about what portion of the reduction will be waiver, and what portion is deferred.

Other Protections for COVID 'impacted tenants'

For ‘impacted tenants’ who had accrued arrears between 15 April 2020 and 26 March 2021:

  • Landlords are prohibited from serving you a termination notice or making a Tribunal application against you for rent arrears if you are an ‘impacted tenant’  and have agreed to a ‘repayment plan’ with your landlord/agent and have complied with the terms of the plan.
  • If an impacted tenant has an arrears repayment plan - then your landlord cannot evict you unless you have failed to make 2 consecutive payments under your repayment plan and only if the eviction is ‘fair and reasonable’ in the circumstances.
  • If an impacted tenant does not have an arrears repayment plan - then your landlord must not take action to terminate the tenancy unless  the landlord has first participated in good faith in a ‘formal arrears repayment negotiation process’ (facilitated by NSW Fair Trading) AND the termination is fair and reasonable in the circumstances.

These other protections will end on 27 September 2021.

Tenants should keep written records of any repayment plans, proof of the repayments made and request updated rent ledgers.

You can download a template repayment plan here: