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312 state house tenancies ended for dishonesty

Hon Phil Heatley
Minister of Housing

22 August 2012

Media Statement

312 state house tenancies ended for dishonesty

Housing New Zealand has terminated 312 tenancies in the year to 30 June 2012 after investigations found the tenants had obtained a state house or taxpayer-subsidised rent by lying about their circumstances, Housing Minister Phil Heatley said today. The figure is up from 241 last year and 114 in 2010.

“There has been a sharp increase in the number of state tenancies ended for dishonesty over the past couple of years,” Mr Heatley said.

“Housing New Zealand has worked hard to identify and remove tenants committing fraud and to make sure those most in need are assisted for as long as they have that need.

“We have built a very effective and skilled team of investigators who are very good at detecting, investigating and dealing with tenants who are deliberately ripping off the system,” he said.

In addition, during the past 12 months Housing New Zealand was successful in establishing $9.6 million in Crown debts for overpaid rent subsidies – bringing the total over the past four years to nearly $23.3 million.

“In one recent case the courts ordered the former tenant to repay over $75,000 in rental subsidies. It’s very important that we not only end tenancies, but also seek to recover the taxpayer-funded rent subsidies that these people received by knowingly lying about their circumstances.

“A state house is not an automatic entitlement – and people who deliberately lie about their circumstances are depriving families in real need and receive benefits that they are not entitled to.

“By freeing up 312 homes in the past 12 months, a total of 709 over the past three years, Housing New Zealand is able to help a significant number of people on the waiting list who desperately need a state house.”

The investigations revealed situations where tenants failed to advise Housing New Zealand about income from employment, business interests, assets, that they lived with a partner, or they sublet their tenancy.

Since July last year Housing New Zealand has also successfully prosecuted 120 tenants for fraud. Sentences for the 120 people convicted included:

· prison sentences (three)

· home detention/community detention (42)

· community work (45)

· reparation only (five)

· convicted and discharged (four)

· awaiting sentence (21)

Examples of former tenants investigated over the past year

Running a business

Two Auckland tenants were claiming taxpayer-subsidised income-related rent while running an Internet services business with 300 residential customers. Between 2006 and 2010 the business generated $392,850 in bank deposits. The tenancy was terminated and the tenants prosecuted through the courts. They have been sentenced to community work and ordered to pay reparation.

Undeclared partner

A West Auckland tenant with an undeclared partner living at her state rental house made a joint application with her partner to purchase the Housing New Zealand property she lived in. An investigation determined that the two had been in a long-term relationship, and they intentionally did not declare the partner on Income Related Rent applications forms to avoid paying higher rent. If the partner had been declared, the tenant would not have been eligible for the taxpayer-subsidised rent that she was receiving – it was calculated that she received $75,310 in rent subsidies that she should not have received. The tenancy was terminated, and the tenant sentenced to eight months’ home detention and ordered to pay reparation of $75,310.

Undeclared partner

An investigation into a South Island tenant found he had failed to include his wife and her income when claiming Income Related Rent subsidies. The investigation came about as a result of a family photo being recovered from Facebook. The wife lived undeclared at the tenancy and was continuously employed for 11 years. The couple also jointly owned a property, located about 5km from the state house they rented, which they did not declare. The tenancy was ended and the tenant was prosecuted and pleaded guilty. He is awaiting sentencing.

Subletting tenancy

An Auckland couple renting a state house sublet the house for one year, and lied about their income for four years. When interviewed the couple denied subletting but the investigation established that they were living in Palmerston North, where their children were enrolled in school. The tenancy was terminated, and both tenants were convicted and sentenced to 150 hours community work each. They are currently repaying Housing New Zealand $22,486.


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