Finance minister ‘regrets’ saying New Zealanders living in social housing have ‘won the Lotto’

Thursday, 21 May 2026

Housing Minister Chris Bishop has announced plans to overhaul the social housing system.

Tenants will be expected to pay 30% of their income towards rent from April 2027, up from current 25%.

Other changes, to come later, will include an updated needs assessment and a “responsibility framework” imposing obligations on social housing tenants.

Finance Minister Nicola Willis has issued a statement saying she regrets telling reporters that social housing tenants have “won the Lotto”.

Willis made the comment while responding to questions about plans to overhaul the social housing system on Thursday.

The first changes to the system will come under next week’s Budget, and mean social housing tenants will be expected to pay 30% of their income towards rent from April 2027 (up from the current 25%). The money the Government saves from that will go to increasing the accommodation supplement for households in private rentals.

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Modelling shows this will leave 111,000 families in the private rental market better off by an average of $14.91 per week.

But 45,000 families in the private market will be worse off by an average of $10.82 per week, and 84,000 families in social housing will be worse off by more than $30 per week.

Willis said the changes are about making the system fairer.

“At the moment, people in social housing effectively have won the Lotto. They get so much more support than a family with just as low income in a private rental. That's not fair,” she said.

But a few hours later, Willis visited the Press Gallery to rescind her statement.

“I regret using this phrase because people living in social housing are often in very difficult circumstances and the phrase I used implied otherwise,” she said.

“I reached for the wrong metaphor when trying to make a point about fairness in the housing system. I will not be using this phrase again.”

Speaking to the upcoming changes, Bishop said the housing allowance adjustments are designed to make it easier for people to transition from social housing to private rentals.

But the Labour and Green parties have called the change “cruel” given the wider cost of living crisis.

Other changes, to come later, will include an updated needs assessment, and a “responsibility framework” imposing obligations on social housing tenants.

Budget 2026 changes

The changes coming in the Budget will increase the Income Related Rent threshold by 5% from their soonest rent review, or change of circumstance, after April 2027.

The IRR threshold is the amount of money that tenants are expected to pay. Currently, they are required to contribute 25% of their income to housing costs - whatever their income is. The Government subsidises the rest of their rent directly to the landlord.

From next year, those tenants will be expected to contribute 30% of their income. That is expected to save the Government $387.5 million over four years.

Most of that saving will then be reinvested into increasing the maximum weekly accommodation supplement by between $10 to $30 per week, the minister said.

This supplement was available to households in the private rental market who had total assets worth less then $8100 (or $16,200 for a couple). They have to contribute at least 30% of their income to housing costs before they are eligible.

Asked how he could justify the increase for tenants amid a cost of living crisis, Bishop said he would not pretend that these changes will be easy to make.

“I’m not pretending for a moment that this is an easy decision, but the current system is not fair and not right and we want to make sure that we’re creating more fairness in the system,” he said.

Bishop said that 29% of social housing households currently have sufficient income to manage private rental costs in the lower quartile of the rental market. With this change, he hopes to disincentivise people from staying in social housing and make it easier to enter the private market.

Wider review will bring fairness back into the system, Bishop says

A large part of Thursday’s announcement outlined a “multi-year reform” of the system.

“We have made good progress to fix the social housing system by turning around Kāinga Ora, funding Community Housing Providers to deliver over 2000 additional social housing, supporting lower-cost borrowing, and creating a Flexible Fund to get the right homes in the right places for the people most in need,” Bishop said.

“But there is more to do to ensure the system is fair, delivers value for taxpayer money, supports upward mobility and gets help to those who need it.”

Bishop said his planned reform had three main goals: refocusing on those with the highest needs, improving flows out of the social housing system, and improving fairness by removing the “cliff” between social and private housing.

The changes in Budget 2026 were designed to address the third goal, Bishop said.

For the first, the Government planned to update the social housing needs assessment to focus on barriers to housing, he said.

“The needs assessment will be redesigned so it better identifies people facing severe and persistent barrier to housing. That includes people dealing with issues like mental health, addiction, family violence, discrimination or a lack of suitable housing supply,” Bishop said.

“Affordability still matters, but where affordability is the main issue, the right answer is usually a subsidy, like the accommodation supplement.”

In terms of improving flows out of the social housing system, Bishop said too many social housing tenants stayed in the system for too long. About 30% of tenants had lived in social housing for more than 10 years.

While this part of the reform was yet to be developed, Bishop said the Government was exploring options including duration limits, a responsibilities framework that placed obligations on tenants to move towards housing independence, and more regular check-ins with tenants.

“I don’t want to get ahead of where our policy work leads, but we’re just saying a duration limit as a concept… you know so it's not like a house for life, it's a house for a certain period of time. After that, your need gets reassessed,” Bishop said.

Labour, Greens label changes ‘cruel’

Labour housing spokesperson Kieran McAnulty said the changes were “nothing more than a plan to remove support from struggling New Zealanders to save money”.

“Christopher Luxon and Chris Bishop are trying to dress up rent hikes and benefit cuts as ‘independence’. The Government is trying to balance the books on the backs of people already doing it tough,” he said.

“They’re increasing rents for 84,000 households by an average of $31 a week during a cost-of-living crisis, and pretending it’s about fairness. You do not help families into independence by making them poorer.”

When asked about the impacts for struggling families, Bishop said his policy changes were designed to help people get ahead.

“People will get ahead more by moving into the private market more than they otherwise would be,” he said.

According to the Green Party’s housing spokesperson Tamatha Paul, “increasing rents by 20% on top of unaffordable food costs, power bills and medical bills is simply cruel”.