The accommodation supplement is paid according to a household's assets, income and housing costs. (File photo) Photo: 123RF
A growing number of people are receiving the maximum accommodation supplement - and one budget adviser says it's adding to the disincentive for some of them to take on more work.
Data provided to RNZ under the Official Information Act shows a higher number and proportion of people receiving the accommodation supplement, which was designed to help with the cost of rent or mortgage, were now receiving the maximum possible.
It showed that in the accommodation supplement region one, which covered Auckland, 53,337 households were receiving the maximum supplement, or 38 percent of the total.
That compared to 24 percent in December 2020.
In region two, which included Christchurch, Hamilton, Kapiti, Lower Hutt, Motueka, Napier, Hastings, Wellington and Whangārei, among others, it was 48 percent compared to 32 percent in 2020.
In region three, which covered areas such as Gisborne, Dunedin, Kaitaia, Levin, Masteron, Greymouth, Rotorua and Thames it was 56 percent compared to 41 percent five years earlier and in region four, which includes areas not covered by the other areas, 60 percent compared to 43 percent.
Overall, close to half of all recipients are at the maximum compared to a third in 2020.
The accommodation supplement was paid according to a household's assets, income and housing costs.
A couple or a sole parent could have assets up to $16,200.
A single parent with one child in Auckland could receive up to $235 a week. With two or more children they could receive up to $305.
Allison Tindale, a welfare advocate at Hutt Valley Benefit Education Services Trust, said people who reached the limit would then often seek help from Temporary Additional Support to cover their costs.
But she said this created a disincentive for them to find more work, because their eligibility for additional support could decline with every dollar earned.
"More and more people are reaching this limit, as the limits set for the four areas is based on 2016 rent data.
"It is $105 for a single person in area two, which includes Wellington and Christchurch.
"I recently advised a client on the Supported Living Payment that they were likely to receive little benefit from their new part-time job of about nine hours."
She said while households could earn $160 before it affected their benefit income, that only applied to the main benefit. Those who received other payments would have them abated much more quickly.
Shamubeel Eaqub, chief economist at Simplicity, said the data reflected the cost of housing rising faster than accommodation supplement limits, and household budgets being under pressure.
Brad Olsen, chief executive at Infometrics, agreed.
"I think the data fairly clearly shows that you're seeing a large increase, both in the number of and the proportion of accommodation supplement recipients who are getting the max rate.
Infometrics chief executive Brad Olsen. (File photo) Photo: RNZ / Samuel Rillstone
"I think the wider call here is that we really need to better coordinate policies between all of these various things.
"We need to be looking at the accommodation supplement, Working for Families, the wider benefit system, the wider tax system, to try and align this stuff, because you don't want to get perverse incentives that starts to come through and say, I'm getting more support and government will record that greater support, but actually, as a person, I'm not getting any more money.
"I'm giving with one hand to take with the other. It suggests that, you know, there's an increasing need, given you've got more who are claiming the max rate, but clearly those people are unlikely to be becoming all that much better off."
Tindale said being able to access temporary additional support was a poor substitute for an increase in the maximum available from the accommodation supplement.
"Keep in mind that most non-beneficiaries can't reach the maximum levels, due to abatements from extra income."
She said while there was not much upward pressure on rents in recent years other essential costs had increased a lot.
"I strongly suspect that almost all recipients of the accommodation supplement are facing unaffordable housing."
Graham Allpress, group general manager for client service delivery at the Ministry of Social Development said the amount a person might receive in temporary additional support was based on the difference between their living costs and their disposable income.
He said an increase in their income could affect what they were paid.
"If the difference between their living costs and their disposable income remains higher than the upper limit, the client will see no change in their TAS payments.
"However, if an increase in income means the difference between their living costs and disposable income drops below the upper limit, TAS payments will reduce. If their TAS payment is lower than the upper limit, any income will reduce their TAS payment dollar-for-dollar."
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