Ripple effect of rising fuel prices and ‘youth housing penalty’ locks young people out

As fuel prices and the cost of living continue to climb, MCM is warning of a ripple effect that will push more young people into homelessness unless urgent action is taken to fix what’s being called the “youth housing penalty.”

Melbourne City Mission (MCM) says economic pressures place significant strain on families leaving more young people with nowhere safe to go.

The warning comes as inflation is expected to rise beyond forecasts, driven in part by global oil supply disruptions, with the impacts set to hit vulnerable young people hardest.
MCM CEO, Paul Wappett, said the link between rising living costs and youth homelessness is well established.

“We’ve seen this pattern time and time again. When the cost-of-living rises, youth homelessness often rises with it,” Mr Wappett said.

“As fuel and everyday costs increase, pressure builds inside households. For some young people, that may mean that home is no longer safe and when they leave, there are fewer options available than ever before.”

In the past three months there has been an overwhelming 23% increase in visits of young people to Frontyard Youth Service, MCM’s youth access point. Last year only 15% of young people leaving Frontyard were able to access appropriate housing. 

Last year, nearly 43,000 Australian children and young people presented alone to specialist homelessness services, with around half turned away due to a lack of available beds.

As coalition partners of the national Home Time campaign MCM is calling on the Federal Government to urgently address a critical policy gap, the ‘youth housing penalty.’

Despite facing the same rising costs as adults, young people experiencing homelessness receive significantly lower income support payments; around 54 per cent less. This disparity has a direct impact on their ability to access housing.

In community housing, rent is typically calculated as a percentage of income. As a result, young people are often overlooked in favour of older applicants who generate higher rental returns, effectively locking them out of stable housing.

“Right now, young people are being priced out of housing before they even get a chance,” Mr Wappett said.

“The system is unintentionally stacking the odds against them and in a tightening rental market, that gap is only getting worse.”

The consequences of youth homelessness are severe and long-lasting, including poorer mental health outcomes, increased risk of self-harm, and reduced engagement in education and employment.

“Safe and stable housing isn’t a nice-to-have, it’s the foundation for a young person’s future,” Mr Wappett said.

“Without it, the pathway out of disadvantage becomes significantly harder to reach.”

MCM, with more than 180 other #HomeTime Coalition partners, is calling for the introduction of a national youth housing supplement in the upcoming Federal Budget, a targeted, practical solution to help bridge the gap between income support and housing costs.

“There is a clear and achievable fix,” said Home Time spokesperson and Head of MCM Policy and Government Relations, Shorna Moore.

“A youth housing supplement would level the playing field, improve access to housing, and ensure young people aren’t left behind in the government’s response to the cost-of-living crisis.”

As we celebrate Youth Homelessness Matters Day, Australians are being urged to act by joining the #HomeTime campaign and emailing the Federal Government to support a national youth housing supplement.

“As we watch the price of fuel rise, it’s important to remember that for many young people, these pressures don’t just mean cutting back, they can mean losing a place to call home,” Mr Wappett said.