THE community housing sector is bracing itself for the full impact of the federal budget, fearing ``unintended and devastating consequences''.
Housing Tasmania and community housing providers receive income-based rent, set at 25 per cent of a tenant's income.
Community Housing Federation of Australia executive director Carol Croce said any reduction in welfare meant a reduction in revenue for providers, affecting the ability to deliver services.
Ms Croce said the main concern for the sector was young people being moved from Newstart to Youth Allowance, and the six-month waiting time for under-30s to receive welfare that stems from the government's ``earn or learn'' policy.
``Twenty-five per cent of zero is zero,'' she said. ``We don't want to turf them out on the street, that's not what we're about.''
Ms Croce said there was a ``ripple effect'' on the whole sector, including the private rental market.
``If you're a private landlord, are you going to be willing to rent to anyone under 30 on the off chance they lose their job?
``We're trying to grow the sector, but no one predicted this, not of this calibre,'' she said.
Community Housing Ltd took over 1200 Launceston properties from Housing Tasmania this year.
Managing director Steve Bevington said a tenant being moved on to Youth Allowance would cost his organisation about $60 a week.
``None of this is going to improve our service,'' Mr Bevington said. He said the six-month waiting period put young people renting in ``extremely difficult positions''.
A state government spokesman said modelling was under way to establish the impact the federal budget would have on Housing Tasmania's revenue.
``It is a complex modelling exercise which will take time and it is too early to put a precise figure on any possible impact,'' he said.