This led to the patient owing the rehab centre more than $300, which he was expected to repay or work off.
Deputy Health and Disability Commissioner Theo Baker found the counsellor, whom she did not name, had financially exploited the man.
She said the counsellor and the centre had breached the code of patients' rights and she made 11 recommendations for improvements, including obtaining certification under the Health and Disability Services (Safety) Act 2001.
Ms Baker also referred the counsellor, some of whose actions were judged likely to attract severe disapproval from his professional peers, to the commissioner's independent prosecutor to decide if legal proceedings should be laid.
The centre - not named by Ms Baker - is a small, rural facility, catering for fewer than five patients and staffed by the counsellor, his wife and a part-time, unpaid counsellor.
The patient lived in a small unit at the centre for 16 weeks in 2012.
The patient had the facility's weekly fees of $326, including $61 for one-on-one counselling sessions, paid directly from his $333-a-week Work and Income benefit, leaving him just $7 for personal items and arrangements to see his daughter.
Ms Baker rejected the counsellor's claim that counselling sessions were fluid and might occur in the garden and in other settings outside his office.
The counsellor, who provided only three one-on-one sessions, had abused his position of trust by taking advantage of the patient for the facility and himself.
" ... it was exploitative for Mr A [the counsellor] to undertake to provide the counselling that Mr B [the patient] needed, require Mr B to pay for the counselling, but fail to provide it."
Ms Baker said there was no written plan of care for the patient and that the counsellor had, inappropriately, encouraged him to stop taking his antidepressant medication.
Her adviser, addictions clinician Vanessa Caldwell, said she was "incredulous" that the counsellor gave pocket-knives to patients and allowed them to use air rifles. There was a risk of injury and the potential for intimidation.