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Subsidising housing costs for those

on low incomes

Housing subsidies could be improved by:

• extending the period from 2 months to 6 months before income-related rent for public housing is increased after the tenant moves into employment

• changing the way Accommodation Supplement payments are calculated, so indexing maintains relativity with housing costs, and removing differences between renters and homeowners. 

Specifically in relation to Accommodation Supplement:

– increasing the maxima to the median regional rental rates (for the latest year available)

– reviewing the maxima and the area locations annually to maintain the value of the payments with changes in median rental rates in different parts of the country over time

– decreasing the co-payment rate from 30% to 25% (that is, increase the Government contribution from 70% to 75%)

– decreasing the entry threshold for homeowners from 30% to 25% to align with renters

– allowing people who are studying (and meet the criteria for Student Allowance) but who do not receive Student Allowance, to apply for Accommodation Supplement.

Increase the cash asset limit on Accommodation Supplement to $42,700, to align with the cash asset limit for social housing:

– index the cash asset limit to maintain relativity over time

– remove the cash asset abatement test for Accommodation Supplement

– amend the definition of cash asset to exclude the proceeds from the sale of a house, for a reasonable period, to allow the person to re-enter the housing market, taking account of any special requirements or modifications the person or their family may require to a house.

Improve the take-up rate of Accommodation Supplement and Temporary Additional Support for non-benefit recipients through greater cooperation with Inland Revenue, better use of its information, and increased publicity and proactive activity.

Increase the flexibility in the requirement to review and renew Temporary Additional Support when assessments relate to housing costs, with reviews between 3 and 12 months tailored to individual circumstances, and accordingly rename, such as ‘Tailored Additional Support’. 

Ensure the combination of changes to housing support and abatement rates, alongside other income support, make low- and low–middle income households substantially better off. 

Government to undertake further work

Determine the impact on low-income households of maintaining levels of Accommodation Supplement for a reasonable period for beneficiaries who move into full-time work, so they are well supported to remain in work and able to clear debts and build savings, similar to the recommendation on income-related rent subsidy.

Change the way Accommodation Supplement payments are calculated to move away from family size to being based on the number of bedrooms, including allowing bedroom space for a disability support person and for children in shared custody, and determine the impact of this change on low-income households.

Review the level of the cash asset limit for the income-related rent subsidy and Accommodation Supplement, to maintain the principle that it allows people to save for a mortgage deposit for a median-priced house.

Review, as the supply-side measures increase and affordability improves, the roles of MSD, Housing New Zealand and the Ministry of Housing and Urban Development to consider whether an integrated, single-agency approach to housing might be preferable.

Review the housing assessment and allocation process so there is an appropriate balance between placing locals waiting to be housed and high-needs households from outside the region.

Home ownership and tenure options and ending homelessness

Consider the following approaches:

•     facilitate innovative thinking and action to increase home ownership through rent-to-buy schemes, shared equity schemes, low-interest rate loans or fixed mortgages, microfinancing and similar

•     request Housing New Zealand to develop affordable options for tenants to purchase their state house.

These approaches must be based on achieving equity in housing outcomes, including ownership, for Māori and Pacific People. This should result in culturally appropriate rental and ownership housing, including household size and function, and include papakāinga options.