Low earners shortchanged by housing subsidy

LIZ MCDONALD
Last updated 05:00 17/02/2014

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Christchurch homeowners and tenants struggling with spiralling housing costs are being shortchanged by a taxpayer subsidy that favours North Islanders.

While the city's house prices and rents have jumped since the earthquakes, accommodation supplements for low-income earners and beneficiaries have fallen well behind.

A Christchurch couple with three children - earning $850 a week pre-tax and paying $400 rent - qualify for $45 less a week than if they lived in the north. An online government calculator shows their maximum subsidy would be $51, compared with $96 for a family with the same rent and income up north.

The rent or mortgage subsidy works on a zone system. Aucklanders get the most, followed by Wellingtonians, with small-town North Island and most of the South Island, including Christchurch, getting less. Despite housing costs now matching those in much of Auckland and Wellington, the city's zone status has not changed since 2005.

Tenants Protection manager Helen Gatonyi said the discrepancy meant a big difference in access. The "working poor" were the most disadvantaged, she said.

"People here are very much penalised by not receiving the same level of assistance as Auckland and other areas. They are getting further and further behind.

"Five years ago Auckland prices were certainly well ahead of Christchurch - we all know that's changed."

The discrepancy remained despite the group's "on-going discussions" with Government, Gatonyi said. "But at the end of the day it comes down to who holds the power. Tenants are totally powerless."

Tenant Rebecca Graham, an office administrator renting a home in Riccarton for herself and her two children, said the extra $40 or $50 a week supplement she would get in Auckland would make a big difference to the family budget. "It just seems really unfair."

Accommodation supplements were first introduced to bridge the gap between the costs of private accommodation and subsidised state housing.

A Ministry of Social Development spokesperson told The Press the zones for the supplement were set using official data. Changes last year brought the towns of Lincoln, Rolleston and Woodend into line with Christchurch, but did not alter the city's zoning.

The spokesman pointed to aid in the form of the Canterbury Earthquake Temporary Accommodation Service and a temporary subsidy for displaced homeowners.

Alan Johnson, a senior policy analyst with the Salvation Army, said two-thirds of those Christchurch people getting the accommodation subsidy now received the most allowed for the area.

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"This means the maximum isn't high enough. It's important for the amounts to be updated, but they haven't been changed for years even though housing costs are rising fast."

Christchurch City Missioner Michael Gorman said the anomaly "doesn't make sense at all".

"It's totally not acknowledging the extra financial pressure on people. How bad does it have to get for people before it becomes absolutely intolerable?"

House prices in the city are now 50 per cent higher than in 2005, according to Real Estate Institute data. Bond figures show rents since the earthquakes have jumped by about 35 per cent in Christchurch, more in some neighbourhoods.

Average three-bedroom homes rents in mid-range Christchurch suburbs such as St Albans, Addington, Halswell, and Avonhead are now between $430 and $460 a week. This is the same as mid-range Auckland suburbs such as Mt Roskill, Titirangi, and Papakura.

- The Press

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