First and foremost, to understand the answer to your question, you need to first understand that YOU the investor is not paid the NRAS incentive. The NRAS incentive is paid to an NRAS Approved Participant, and the Approved Participant (some people on here call them consortiums- but the correct term is Approved Participant) passes it on to you.
This is why you are required to enter into a separate third party agreement with an NRAS Approved Participant, when you buy a property with an NRAS allocation attached. This agreement is separate the Contract Of Sale.
So what is an Approved Participant? In a nutshell- an Approved Particpant is an organisation which is appointed by the Govt and is responsible for administering the scheme and ensuring the property remains compliant, and therefore ensuring the NRAS incentive is payable. The are several areeas where they must "comply"- but the main things to be ticked off are that 1. the property is rented at the appropriate discount and 2. the property is tenanted by eligible tenants- ie income thresholds are observed.
Some of the Approved Particpants have the infrastructure and expertise to do these things themselves, some of them outsource it to other oragnisations- ie property managers etc...but what remains fact is this - the Approved Participant is responsible for ensuring the property is compliant, and that the NRAS incentive is payable. Once the Govt ( state and Fed) pays the incentive to them, then pass the incentive through to the investor- YOU. - for a fee of course
Without having to re-type my previous posts explaining the different NRAS Approved particpants models in detail, there are three different kinds of models that have evolved;
Head Lease Agreement-
Non Entity Joint Venture-
Non Entity Joint Venture via a Managed Investment Scheme-
Now back to your question- In a nutshell, the models operating under a Head Lease are "not for profit" organisations- (remember this is an affordable housing initiative) and the ATO ruled that their not for profit status would be at risk if they received more than 74.9% of the NRAS incentive.. so thats why their model requires that you discount your rent by 25%, whereas everyone else ( the NEJV models and MIS model) only require a 20% rental discount.