3 May 2021

MSD spends $5.5m on IT to charge for emergency housing

From Checkpoint, 5:21 pm on 3 May 2021

The government's being criticised for spending $5.5 million on IT changes so it could charge people living in motels for their emergency accommodation.

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Social Development Minister Carmel Sepuloni says it was a necessary spend. Photo: RNZ / Samuel Rillstone

Since October, people living in emergency accommodation have had to pay 25 percent of their income towards the cost of motels, bringing them in line with other social housing costs.

Prior to that their stay was covered by the Ministry for Social Development unless they failed to meet their obligations in searching for new accommodation.

The charge was outlined in a briefing to housing ministers in September 2019, and described a need to introduce equity across the housing system.

"It also aims to incentivise clients to consider emergency housing as an option of last resort, as it was intended."

The briefing outlines a push to move on people who may have become less motivated to find other accommodation - but admits it has no hard figures on that.

"Anecdotal evidence from our front-line staff suggests there may be small numbers of clients in [emergency housing] that are incentivised to access and remain in [emergency housing] when they have an alternative housing option because they face no accommodation costs."

The paper also stated that bringing in the charge could risk creating "significant additional hardship", and may deter clients from seeking assistance.

The government delayed introducing the charge when the country went into lockdown last year, but went ahead with the planned changes in October - a system change that cost $5.5m.

Social Development Minister Carmel Sepuloni said the spend was necessary to change the system.

"We didn't make this change or create this part-payment to be punitive towards those that are in emergency accommodation... it's about fairness and it's about consistency."

She said community groups were the ones who first suggested the payment - but Peter Sykes of Māngere East Family Services said the charge did not make sense.

"You've got the poorest of the poor being charged - and it's not going to create more housing, it's not going to create solutions, it's not going to address the problems."

He said the 25 percent payment needed to be scrapped as it wasn't actually about helping struggling families, but was instead a political move.

"They want to pacify the middle ground that the government's seeking to keep onside... so the fact that the most vulnerable are vulnerable already, doesn't seem to be high on their priority list."

Associate Housing Minister Marama Davidson last week described the conditions at some motels as "inhumane".

She wouldn't be interviewed for this story but her colleague, Green MP Ricardo Menéndez March, said their party policy was that the charge should be wiped.

Ricardo Menendez March of Auckland Action Against Poverty

Photo: Supplied

"People should not be put in a position where they're being made to pay for a housing crisis that they did not cause.

"Additionally, emergency housing is not actually housing, it's probably more akin to shelter since people don't have a tenancy agreement, they have no rights and they have a lot of obligations each week to meet in order to roll out more emergency housing for one week at a time."

There are more than 22,000 people on the public housing waitlist and, with rents continuing to rise, Menéndez March rejected the idea that charging people in emergency housing would motivate them to find other accommodation.

The government spent $123m on Special Needs Grants in the first three months of this year, and is spending about $1m a day on motels.