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

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

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.

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