Budget 2026: Social housing overhaul will require tenants to pay more, do more

Thursday, 21 May 2026

Social housing tenants will pay higher rents from April 2027 as Cabinet mulls tougher rules relating to tenancy durations and responsibilities.

Housing Minister Chris Bishop set out a major overhaul of the social housing system in a pre-Budget announcement in his Beehive office, arguing the status quo was unfair and unsustainable.

It’s a significant reset that will leave 129,000 households worse off by an average of $24 per week, though Bishop has made the case that people who can afford to rent privately are incentivised to stay in the public system while those who need help the most are missing out.

“I don’t pretend for a moment that it is easy and I don’t pretend that it won't potentially … alarm some people” Bishop told reporters on Thursday morning.

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“I accept that, but the current system is not sustainable or defensible. It is unfair and wrong, and doesn't help those who need it the most.”

Cabinet signed off on the multi-year reform programme on April 28. It can be split into three key shifts, some of which are yet to be decided on.

The first is a new social housing needs assessment that puts greater emphasis on factors over and above affordability issues.

Bishop said social housing should go to those who face “severe and persistent barriers to accessing private housing” like disabled people or large families who struggle to find suitably sized or accessible homes.

He said the new assessment would prioritise social housing for those repeatedly rejected from private rentals due to racism, those who have a history of rent arrears and those with mental health issues, intellectual disabilities, addiction issues and ex-prisoners.

“Affordability still matters, but where affordability is the main issue, the right answer is usually a subsidy, like the Accommodation Supplement, not a social house.

“Social housing is one of the most expensive and intensive forms of support the Government provides. It should be focused on those with the greatest need,” Bishop said.

The second shift - yet to be decided by Cabinet - is tougher rules for social housing tenants to move them out of the system including defined tenancy durations with some exemptions, a “responsibilities framework” and reviews to assess changing needs and eligibility.

“This is not about pushing people out with nowhere to go. It's about helping people move forward when they can so social housing is available for the next person who genuinely needs it.”

The third change is increasing the minimum Income-Related Rent (IRR) contribution from 25% to 30% of a social housing tenant’s income (the Government pays the rest) ‒ meaning around 84,000 households will pay an extra $31 per week.

“For social housing tenants, that change will be phased in over 12 months at each tenant's annual review, or their next change in circumstances,” Bishop said.

The change is expected to save $387.5 million that will be re-invested into higher Accommodation Supplement (AS) rates - lifting them by between $10 and $30 per week.

“So we're asking social housing tenants who can contribute a little bit more to do so, while increasing support for people in private rentals, many of whom are also doing it tough. That is fair.”

The Government is also reducing the maximum rate of Temporary Additional Support (TAS) so people aren’t dis-incentivised to work and earn more, Bishop said.

Officials will hold targeted discussions in the second half of 2026 with iwi, community housing providers, Kāinga Ora and social service providers as the next stage of the reforms are developed.