Accommodation Supplement

Overview

An Accommodation Supplement is available to assist people with limited income and limited cash assets to meet their accommodation costs. Assistance is available to help pay rent, board or costs of home ownership. Accommodation Supplements replaced Accommodation Benefits on 1 July 1993.

Housing costs must be over a stated minimum, and income and asset tests must be met. An Accommodation Supplement meets 70% of accommodation-related costs over an entry threshold, up to a maximum that varies according to region and household size. For boarders, 62% of their boarding costs are considered as accommodation-related costs.

Tenants of Housing New Zealand Corporation (HNZC) properties receive a rental subsidy from HNZC and are not eligible for an Accommodation Supplement.

The Working for Families package increased the income limits for Accommodation Supplements from October 2004, and also changed the Accommodation Supplement abatement regime. Under these abatement changes, clients receiving an Accommodation Supplement and earning additional income no longer have their Accommodation Supplement abated while they remain on a benefit. Once clients enter paid work, however, their Accommodation Supplement is abated to reflect their income.

From 1 April 2005, the number of Accommodation Supplement areas was increased from three to four, and the maximum level of supplement available in some areas was increased.

---

Trends in the number of clients receiving an Accommodation Supplement

The number of Accommodation Supplement recipients has increased slightly in the last year, after decreasing in the previous year (see table 4.1). The recent increase in numbers receiving supplements reflects a rise in numbers receiving Invalid's Benefits combined with a slowing in the decrease in numbers receiving unemployment-related benefits.

In 2008, 22% of Accommodation Supplement recipients were not receiving any pension or main benefit, compared with nine percent in 2004 (see table 4.1). There was a corresponding decrease in the proportion receiving unemployment-related benefits (from 21% to 7%). Since 2004, the proportion of Accommodation Supplement recipients receiving a carer's benefit has decreased (from 33% to 28%).

Table 4.1 Trends in the types of pension or main benefit paid to clients receiving an Accommodation Supplement

Type of pension or main benefit paid at the end of June	Clients receiving an Accommodation Supplement1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Unemployment-related benefits2	48,830	37,756	32,518	21,286	18,265
Carer's benefits3	77,476	75,279	72,537	68,459	68,904
Sickness-related benefits4	29,822	31,268	33,198	34,113	33,522
Invalid's Benefit	33,270	35,179	37,043	38,265	41,755
Widow's Benefit	2,495	2,497	2,388	2,204	2,155
Emergency Benefit	5,541	5,582	6,034	5,806	5,143
New Zealand Superannuation	17,102	18,570	20,141	21,281	22,452
Veteran's Pension	281	325	333	325	348
No pension or main benefit5	21,878	36,156	45,186	51,694	52,966
Total	236,695	242,612	249,378	243,433	245,510

Notes

1. Numbers of clients recorded in SWIFTT as receiving an Accommodation Supplement at the end of June.
2. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to trainees, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits - Hardship.
5. Includes clients receiving an Orphan's Benefit or an Unsupported Child's Benefit.

Since 2005, around 59% of Accommodation Supplement recipients have been renting privately, while around 20% have been boarding (see table 4.2).

Table 4.2 Trends in the ownership status of clients receiving an Accommodation Supplement

Ownership status at the end of June	Clients receiving an Accommodation Supplement1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Renting privately	137,038	142,076	146,904	145,519	148,173
Renting from other organisation	5,936	6,245	6,627	6,778	7,162
Boarding	55,418	52,357	52,703	48,686	48,901
Own their own home2	38,293	41,772	43,115	42,427	41,254
Unspecified	10	162	29	23	20
Total	236,695	242,612	249,378	243,433	245,510

Notes

1. Numbers of clients recorded in SWIFTT as receiving an Accommodation Supplement at the end of June.
2. Virtually all these clients are receiving assistance with mortgage costs. A very small number, however, may own their home without a mortgage but be receiving assistance with other accommodation costs such as rates or insurance.

---

Trends in the proportion of people aged 18 years or over receiving an Accommodation Supplement

The proportion of all people aged 18 years or over in the New Zealand population who were receiving an Accommodation Supplement at the end of June each year has fluctuated since 2004 (see figure 4.1). This reflects the combined impact of decreases over this period in numbers of recipients of main benefits and the expansion of Accommodation Supplements provided to low-income working families through the Working for Families package.

Throughout this period, 18-39 year olds have been more likely than older working age people to receive an Accommodation Supplement, while people aged 65 years or over have been least likely to do so (see figure 4.1). These patterns reflect at least in part the increased likelihood that younger people are both living on low incomes and not owning their own homes.

figure 4.1 Trends in the proportion of people aged 18 years or over receiving an Accommodation Supplement, by age

Note

1. Proportion shows:
   1. number of people in age group recorded in SWIFTT as receiving an Accommodation Supplement at the end of June, divided by
   2. Statistics New Zealand final estimate of the resident population in age group at the end of June.

See table A3.14 for a summary of the SWIFTT data underlying figure 4.1

---

Trends in Accommodation Supplements granted

The annual number of Accommodation Supplements granted has decreased over the last three years (see table 4.3). This reflects decreases in the number of clients receiving a main benefit, particularly unemployment-related benefits.

Thirty percent of the clients granted Accommodation Supplements in 2007/2008 were receiving an unemployment-related benefit, compared with 47% in 2003/2004. Over the same period, the proportion of these clients who were not receiving any pension or main benefit has increased (from 11% to 23%) (see table 4.3).

Table 4.3 Trends in the types of pension or main benefit paid to clients granted an Accommodation Supplement

Type of pension or main benefit received when Accommodation Supplement granted	Accommodation Supplements granted1
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
Unemployment-related benefits2	106,190	93,144	83,813	71,961	61,745
Carer's benefits3	34,674	34,534	32,211	31,161	33,476
Sickness-related benefits4	37,346	38,066	38,597	39,647	40,822
Invalid's Benefit	10,206	10,935	10,344	10,313	12,790
Widow's Benefit	976	1054	863	760	830
Transitional Retirement Benefit5	271	0	0	0	0
Emergency Benefit	6,805	6,739	6,963	6,183	5,344
New Zealand Superannuation	4,633	5,483	5,499	5,652	6,010
Veteran's Pension	83	123	105	100	108
No pension or main benefit6	24,778	44,170	45,877	48,442	46,749
Total	225,962	234,248	224,272	214,219	207,874

Notes

1. Numbers of successful applications for Accommodation Supplements recorded in SWIFTT during years ended June.
2. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to trainees, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits - Hardship.
5. The phasing-out of this benefit was completed on 1 April 2004.
6. Includes clients receiving an Orphan's Benefit or an Unsupported Child's Benefit.

---

Trends in expenditure on Accommodation Supplements

Decreased expenditure between 1999/2000 and 2000/2001 (see table 4.4) reflects the impact of the reintroduction of income-related rents for state rental homes in November 2000. Accommodation Supplement expenditure has increased since 2003/2004, with slower increases in the last two years. This pattern reflects a combination of:

• increases in 2004/2005 and later years in numbers of low-income working people receiving an Accommodation Supplement (This was largely due to broadened eligibility under the Working for Families package)
• increases since 1 April 2005 in the maximum levels of assistance available in some areas of New Zealand
• a levelling off of the increase in spending on accommodation supplements for Domestic Purposes Benefit (DPB) and low-income working households over the last two years, reflecting changes in numbers of these clients receiving Accommodation Supplements.

Table 4.4 Trends in annual expenditure on Accommodation Supplements

Year ended June	Expenditure on Accommodation Supplements1,2,3 ($m)
1995/1996	551
1996/1997	648
1997/1998	777
1998/1999	831
1999/2000	852
2000/2001	790
2001/2002	711
2002/2003	697
2003/2004	691
2004/2005	735
2005/2006	830
2006/2007	865
2007/2008	875

Notes

1. Expenditure on Accommodation Supplements in years ended June.
2. Expenditure shown is adjusted to payment periods based on a standard 30-day month, and smoothed using a two-month moving average. Accommodation Supplements are not subject to taxation.
3. Expenditure data in this table differs from, and should not be cited as, the Ministry of Social Development's official measure of expenditure on financial assistance provided to clients.

Monthly expenditure on Accommodation Supplements shows small seasonal peaks in summer (see figure 4.2), which reflect the seasonal peak in uptake of main benefits that occurs around this time.

figure 4.2 Trends in monthly expenditure on Accommodation Supplements

Notes

1. Expenditure is adjusted to payment periods based on a standard 30-day month, and smoothed using a two-month moving average. Accommodation Supplements are not subject to taxation.
2. Expenditure data in this graph differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

---