Integrating Government Assistance for Accommodation

Johanna Kuila

The mid-80s saw considerable debate over whether accommodation assistance in New Zealand could best be delivered through the direct supply of low-cost rental housing and mortgages at concessionary interest rates (supply-side policies), or directly to low-income earners in the form of a cash grant (demand-side policies). New Zealand’s accommodation assistance regime has been a mixture of these, but in 1991 the Government made a clear decision to move towards demand-side policies. In the new system, state sector rents and interest rates move to market levels and assistance is delivered through an Accommodation Supplement.

This paper briefly outlines the rationale for this integrated policy and examines the Accommodation Supplement. The analysis shows that most people receiving the old Accommodation Benefit benefited from the introduction of the new Accommodation Supplement, but former Housing Corporation of New Zealand clients (Housing New Zealand is the new rental enterprise) face a reduction in their level of subsidy. Also, the Community Funding Agency will still need to ensure that special housing needs (eg, for victims of domestic violence) are met.

The paper concludes that the desired outcomes have provided the government with the basis to initiate the move towards an integrated form of accommodation assistance.