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Income Related Rents Legislation

The law change needed to restore income related rents for state house tenants will be introduced into Parliament tomorrow the Minister of Housing Mark Gosche said today.

He said the Housing Restructuring (Income-related Rents) Amendment would target those most in need. Independent studies have found that high housing costs are the largest single cause of poverty in New Zealand.

"Independent research has also found that more than 70% of Housing New Zealand tenants lived in poverty as a result of the previous government's housing policy," said Mr Gosche.

"Our income related rents policy has drawn strong support from the community sector who also see affordable housing as a crucial step towards addressing poverty amongst some of New Zealand's most needy households."

ENDS

ATTACHMENTS FOLLOW

Explanation of Headings for the Income Related Rents
for Housing New Zealand Tenants Chart


Headings
Explanation

Benefit Income (after tax)
This excludes the accommodation supplement and any family support


Family Support
The amount received in family support payments.
BUT NOTE: Only the family support payment for the first child is included in the calculation of income (up to a maximum of $47.00).


Non Benefit Earnings (after tax)

Any additional income

Current Market Rent

The market rent charged by Housing New Zealand for that particular property.


Current Accommodation Supplement
The amount of Accommodation Subsidy the tenant is receiving through the Department of Work and Income. This is based on a number of factors including the location of the house, the house size, the family size, income and any maximum accommodation supplement for that particular area. For example there is a maximum of $150 AS payable in the Auckland area.
The Accommodation Supplement for HNZ tenants will cease from December 2000 and should not be counted as income in calculating an income related rent.


Current Net Rent
The amount the person is actually contributing for the housing costs. That is the market rent less the accommodation supplement.


Income Related Rent
The amount the tenant will be paying after the introduction of income related rents on 1 December 2000.


Increase in Residual Income
The amount by which the tenant will be better off as a result of income related rents from 1 December 2000.


EXAMPLES OF THE EFFECT OF INCOME RELATED RENTS FOR HNZ TENANTS


Scenario


Benefit Income
(after tax)
($/week)


Family Support
($/week)

Non Benefit Earnings (after tax)
($/week)


Current Market Rent ($/week)

Current Accommodation Supplement ($/week)


Current Net Rent
($/week)

Income Related Rent from 1 Dec 2000 ($/week)
Increase in Residual Income from 1 Dec 2000
($/week)
1 Married Couple, Community Wage,
4 Children (Wellington) $263.24 $143 $0 $215 $95.90 $119.10 $77.56
$41.54
2 Married Couple, Community Wage, 4 Children, (Auckland, North Shore) $263.24 $143 $0 $300 $150 $150 $77.56 $72.44
3 Married Couple, Invalids Benefit,
0 Children (Auckland) $309.66 $0 $0 $150 $51.10 $98.90 $77.42
$21.48
4 Domestic Purposes Beneficiary, 2 Children
(Christchurch) $232.27 $79 $0 $150 $56 $94 $69.82
$24.18
5 Married Couple, NZ Superannuation, 0 Children (Auckland) $347.00 $0 $0 $150 $44.10 $105.90 $86.75
$19.15
6 Married Couple, Community Wage, 3 Children (Christchurch) $263.24 $111 $0 $180 $71.40 $108.60 $77.56
$31.04
7 Domestic Purposes Beneficiary, 1 Child (Wellington) $212.90 $47 $0 $150 $59.50 $90.50 $64.98
$25.52
8 Single Person, NZ Superannuation, 0 Children (Auckland) $225.55 $0 $0 $150 $65.80 $84.20 $56.39
$27.81


Assumes that the eldest child is aged under 16 years (FS of $47 per week) and that all subsequent children are aged under 13 years (FS $32 per week).
Market rent less the accommodation supplement received.
In practice HNZ rounds rents down to the nearest dollar.
Maximum accommodation supplement rate for family of 3 or more, living in the Auckland region.

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