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Firm approach to fraud frees up 1000th house

Hon Dr Nick Smith

Minister of Housing

18 August 2013      

Media Statement

Firm approach to fraud frees up 1000th house
Housing New Zealand’s firm line on criminal offending and dishonesty has freed up 1000 houses since the Government changed its policy in 2008, Housing Minister Dr Nick Smith announced today in releasing the figures for 2012/13.
“State houses are heavily subsidised by other taxpayers and tenants abuse this support when they are dishonest about their living situation or income, or use the home for criminal activity like drug manufacturing. We need to take a firm approach to such abuse to be fair to the vast bulk of honest tenants, to ensure public money is supporting improved social outcomes, and to ensure our state houses are available to those most in need of housing support,” Dr Smith says.
“Housing New Zealand expanded its fraud unit and started taking a firm approach on the change of Government in 2008. This has seen the number of tenancies terminated for fraud or criminal offending grow from 42 in 2008/09 to 292 in the year ending of 2012/13. A total of 1001 tenants have been evicted as a result of fraud investigations since the new approach was adopted.
“Housing New Zealand also takes a zero tolerance approach to state houses being used to manufacture and supply drugs. Four houses were used as meth labs in the 2012/13 year, as compared to seven in the previous year. It is an appalling breach of faith for tenants, generously provided with a home by other taxpayers, to then use that home to manufacture and peddle drugs. I am hopeful that the decline in the number of state houses being used as drug houses is a sign that the message of zero tolerance is getting through.
“The work by Housing New Zealand investigators resulted in 129 criminal convictions and the identification of $11 million of rent subsidies tenants were not entitled to.
“While the vast majority of Housing New Zealand’s 62,000 tenancies on income-related rent are in legitimate need of housing, a small minority are rorting the system. I make no apologies for the hard line taken to make sure state housing is freed up for those who actually need it.
“Housing New Zealand investigations for fraud arise from tenancy manager observations, anonymous tip-offs, information from other government agencies and inconsistent information from tenants themselves. 22 per cent of investigations result in no further action because of honest misunderstanding or mistake, insufficient information to prove dishonesty, or other exceptional circumstances that negated what appeared fraudulent.
“Housing support fraud will become more difficult with the Government’s social housing reforms that bring together the administration of financial support for housing and welfare. Many of the people defrauding Housing New Zealand were also committing benefit fraud and it makes sense for both sorts of financial assistance to be considered together.”

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