One man says it’s not fair that he automatically loses 25% of the benefit increase.
Some beneficiaries are unhappy that a chunk of their benefit increase has been swallowed up by an automatic increase in the cost of their social housing.
When people live in social housing, the amount of rent they pay is tied to their incomes.
Single people pay 25% of their income in rent when they earn up to $462.94 a week and then 50% of the amount over that threshold.
For people with children, the threshold at which 50% begins to be taken is $712.22.
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One beneficiary, who wanted to be known only as Mike, said it was not fair. “Who, other than beneficiaries, is getting a 25% reduction to their wage increase or Cost of Living payment?
All main benefits increased by $20 a week this year compared to last July.
Mike said he has now been told he will lose $5 of that in rent.
“Social housing tends to clump people, including myself, who have generally had a less pleasant life to deal with and thereby are more vulnerable to addiction, disease crime… in areas that are harder to move from.
“However, they are – albeit slowly – beginning to benefit from better maintenance, healthy homes [standards].”
People on the benefit receive a Winter Energy Payment so they do not qualify for the Cost of Living payment.
Child poverty Action Group spokesman Alan Johnson said the increase should not have been a surprise.
He said there were lots of situations where clawbacks would decrease the value of money that people received. It could also be a disincentive to taking on even part-time work, he said.
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But he said there was a “horizontal equity” problem and people who were in social housing tended to be better off than those in private rentals, who did not have any restriction on how much of their income their rent could be.
Mike said while it was true that those in private rentals did not have the protection of an income link, it was not so simple.
“There is also no stigma attached to certain areas that social housing has.”
Green Party MP Ricardo Menendez March said the fact people were still struggling after this year’s increase showed benefits needed to be increased generally.
He said the thresholds at which a higher proportion of income was taken in rent felt counterproductive if the Government wanted to encourage people in social housing into work.
Graham Allpress, director of client service delivery at the Ministry of Social Development, said it reviewed rent payments annually to make sure people were paying the right amount.
“Generally the review is on the anniversary of the start date of the tenancy or when a person requests a review, or there has been a change in circumstances, for example when their income has increased or there is a change in the number of children in the person’s care. Reviews can also result in lower rents if people’s income has decreased.
“Generally where there has been an increase to benefit rates, a person’s [rent] would not be reviewed immediately. It would captured in the next annual review, or where there has been a change in the household’s circumstances. People are sent a notice letter five weeks prior to their review date.”
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