Vanessa Edwards owns her own home and has been getting the accommodation supplement for 12 years following a divorce. Photo / Alex Cairns
A business owner who owns her own home says she wouldn’t be able to eat or put fuel in her car if she didn’t get the Accommodation Supplement.
She’s not alone, with over $2.62 million spent weekly on thesupplement across Tauranga, Western Bay of Plenty and Rotorua, according to the Ministry of Social Development’s latest figures provided to the Bay of Plenty Times Weekend under the Official Information Act.
The Accommodation Supplement is a weekly payment that helps people with their rent, board or the cost of owning a home.
How much a person gets depends on their income, assets, accommodation costs, family circumstances and where they live.
Just over 12 years ago, Vanessa Edwards opened a hairdressing business and within a year went through a divorce.
She said the business, where she is a sole trader, was not in a position to financially support her and she was scrambling with how to support herself and her children.
A friend suggested she went to the Ministry of Social Development, where she then found out she could get the accommodation supplement and she has been getting it since.
She was renting at the time and ended up buying a home in Te Puke nine and a half years ago.
She said she had always been honest with the ministry and let the staff there know when she bought a home. Despite that, she still qualified for accommodation support.
“I was really surprised, I thought it was something for renters ... to find out I was still eligible was a blessing,” she said.
“The way things are now, I would not be able to use my car or eat if I didn’t get it ... I can meet those basic requirements of life.”
She currently made $550 a week in the hand with her part-time work, and her mortgage is half of this.
The house expenses, including the mortgage, rates, bills, and insurances cost about $450 per week, which left her with $100 which she put into savings to pay for costs such as home repairs, unexpected expenses or a doctor’s bill.
Her supplement is $105.
“I have to then choose, do I get petrol this week or groceries because I can’t do both in the same week,” she said.
Edwards said that without the supplement she would ensure she kept her home but would have little left for food or petrol.
“That becomes quite isolating because you can’t go visit your family ... My health would also probably deteriorate because I wouldn’t be eating properly and then that impacts my ability to do my job.”
She said people had a misconception about what it looks like to struggle.
“I’m a business owner, a sole trader and I’ve got my own home, but people have this misconception that you’ve got a business, you look put together, you must be doing really well,” she said.
“People need to realise [the cost of living crisis] impacts people right across the board, it doesn’t matter what you look like or where you live.”
Edwards joins thousands of other renters, boarders and mortgage holders in the region who desperately need this financial support.
In Tauranga and the Western Bay of Plenty, in the March 2018 quarter, 7683 renters received the accommodation supplement, which totalled $962,333 per week.
By December 2022 this rose to 10,704 renters in the area, which cost $1,591,761 per week.
People who own their homes also received the supplement to go towards their mortgage.
In March 2018 there were 1320 people who received it for a mortgage, costing $151,269 per week.
This rose to 1710 people by December last year, which cost about $229,955 per week.
In Rotorua, in the March 2018 quarter, 4341 renters received the supplement, which totalled $383,000 per week, rising to 5907 renters in December, which cost $555,638 per week.
In March 2018, there were 576 people who received it for a mortgage costing $43,225 per week, which rose to 660 by December, costing about $53,200 per week.
People living in places deemed Area 1 could qualify for the highest maximum accommodation supplement rate, while those living in Area 4 may qualify for the lowest maximum rate. Rates could vary depending on what other type of support a person is receiving or their income.
Tauranga - alongside Auckland - was in Area 1 where a single person with two children can receive a maximum of $305 a week.
In Area 2, which included Te Puke, Katikati and Waihi Beach, the same person would get a maximum allowance of $220.
In Area 3, which included Rotorua, the same person would get a maximum allowance of $160 a week.
According to Trade Me’s May data, the median weekly rent was $535 in Rotorua, $680 in Tauranga and $650 in the Western Bay of Plenty. This was an increase when compared to May 2019 data, which showed the median weekly rent of $410, $520 and $415 respectively.
Zinny Jones lives in Gate Pa with her five children aged between 11 months and 11 years, all with disabilities.
In September, the rent for her small rental with two bedrooms and a study would increase from $500 to $580 per week.
She received $472 through the sole parent benefit per week, an early learning payment of $161 and a $31 winter energy payment.
The accommodation supplement she received was $254.
She’s lived in her rental for three years and has been getting the accommodation supplement for more than two years.
She said her three boys slept in one room, her eldest daughter slept in the study room and Jones shared a room with her baby.
She said after rent was paid, there was enough for fuel and some food.
A non-negotiable was driving her children to Pyes Pa daily for their special education, and she limited her food to make sure her children didn’t go hungry.
Without the supplement, she said her children would not be able to go to school every day and there would be even less food.
“I’d probably be going into debt.”
SociaLink general manager Liz Davies said the increase in recipients shows “the financial constraints people are living under and ongoing cost of living issues”.
She believed that for people to get to the stage of applying for the supplement “likely means some desperation”, given the process of getting the supplement requires providing a lot of personal information on income and assets.
She said it was a “much-needed tool” to support people with housing costs.
She said accommodation costs made up more than 50 per cent of many people’s income, making food, power and clothes a struggle.
Rotorua Budget Advisory Service manager Pakanui Tuhura said household incomes “are not keeping pace with the increases in accommodation costs”.
Over the last year, about 22 per cent of the budget service’s clients received the accommodation supplement.
He said the cost of accommodation was still the largest cost that most clients incurred, with others getting around this by living in shared accommodation, accommodation that was fixed to the value of their income, with one person paying for their accommodation by doing work around the house.
“I think personally that 25 to 30 per cent of a household income [on accommodation] is doable but once you go past 50 per cent, the stress starts setting in.”
He said the supplement was “a great tool to help people keep a roof over their heads when their income dollar is stretched” - which applies to anyone, not just those on a benefit.
It was also available to retired people, so it was a way for eligible people to stretch their superannuation a bit further.
Bay Financial Mentors manager Shirley McCombe said for some people, the supplement “can be the difference between being able to afford to keep their rental or own home”.
As the supplement was asset-tested, she said some of their clients were ineligible due to their income being too high, however, this income wasn’t enough to cover basic expenses with the increased cost of living.
She said accommodation costs were “enormous” and a “profound problem” in the city.
“The rising costs of rent, poor rental availability and growing population mean that if you are lucky enough to get a rental in the first place you tend to be paying very highly for it.”
She said rising interest rates caused trickle-down to tenants, landlords were selling their rentals and decreasing the rental pool, and a growing population added to accommodation competition.
Ministry of Social Development (MSD) client service delivery group general manager Jayne Russell said the number of people getting the accommodation supplement rose over time, reflecting a rise in accommodation costs.
MSD currently provided the supplement to more than 340,000, with the purpose being to help beneficiaries and low-middle income families and individuals with their rent, board or the cost of owning a home, she said.
In April 2018, the rate increased as part of the Government’s Families Package. She said maximum rates were increased everywhere, and more places qualified as areas with higher maximum rates.
People needed to meet the criteria of an income and asset test, and people who aren’t beneficiaries could also qualify.
She urged those struggling with costs to check their entitlement to see what support MSD could provide at https://check.msd.govt.nz/.
Cira Olivier is a social issues and breaking news reporter for NZME Bay of Plenty. She has been a journalist since 2019.
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