Christchurch council may have to repay tenants $1m

Thousands of social housing tenants in Christchurch are awaiting about $1 million in refunds.

The administrative mess follows this week's High Court decision to overturn a controversial 24 per cent rent rise.

The High Court ruling means tenants are likely to be reimbursed for the extra rent they have paid to the Christchurch City Council since the July 1 rise.

Some tenants have received increased supplements from Work and Income during the period, complicating the issue.

The supplement increase could now have to be paid back to Work and Income and the remainder repaid to tenants.

Sharon Torstonson, executive officer of the Council of Social Services that won the High Court challenge, said the process would be complex.

"It is just really complicated. They will have to identify which of the tenants received the supplement and how much they received as the amount varies from person to person. It would be really unfair if they repay the whole lot to the tenants and expect them to pay back Work and Income," she said.

Christchurch City councillors Chrissie Williams and Helen Broughton warned the repayment process would involve a "huge administrative adjustment".

Work and Income deputy chief executive Patricia Reade said the process would require close collaboration.

"Work and Income will work closely with the council to establish how our mutual clients may be affected by the High Court ruling. Until any changes come into effect, Work and Income clients can be assured that their accommodation supplement payments will continue as usual," she said.

"This matter may be subject to an appeal by the council so we will continue to monitor the situation closely."

Social housing tenant Graham Reed has stopped his rent payment to the council until the issue is resolved.

"It is a good result. I am pleased for all the tenants," he said. "I have just stopped my automatic payment until I get a correct rent figure from council. I think tenants should stop payment straight away and ring up council asking what their new rent will be. They have to pay the money back."

Christchurch Mayor Bob Parker said "a decision on whether to appeal will be made by the council and will take into account staff recommendations".

"No decision has yet been made. It is entirely premature to discuss amount or timing of repayments to tenants," he said.

The rent rise was designed to raise $2.7m a year in extra revenue and the council collected the raised rent for five months before the High Court ruling. An estimated $1m may have to be returned to tenants.

Cr Gail Sheriff said the High Court ruling should mark the end of council involvement in social housing.

"I do not agree with the decision and that leaves us in a position of what do we do now. We should give the social housing to Housing New Zealand and let them deal with it," she said.

- © Fairfax NZ News