Kainga Ora says it tries to strike a careful balance around rental debt. File photo. Photo: RNZ / Nate McKinnon
Dozens of Kainga Ora tenants have been taken to the Tenancy Tribunal over rent arrears in recent months - and advocates say they are part of a growing number facing housing-related debt.
But the department says it is trying to get on top of the situation.
In one case, a Wellington woman owed $34,440 in rent arrears, which she was told to pay off through an additional $60 a week on top of her rent.
In another, Auckland tenants were told to clear $18,021 in rent arrears via an extra $50 payment per week.
In other cases, tenancies were terminated and tenants told to pay arrears immediately.
Kainga Ora general manager of national services Nick Maling said it tried to strike a careful balance around rental debt.
"Many of our customers live on very low incomes and have little or no money in reserve, which means even small, unexpected life events can push them into debt that can be difficult to recover from.
"When a customer falls behind on their rent, we contact them early and work closely with them to develop a plan that will support them as they work through rent-related issues. About three-quarters of customers with rent debt are actively making payments to reduce their debt.
"When customers refuse to engage with us about their debt and continue to not pay their rent, we take action under the Residential Tenancies Act. This has led to us terminating the tenancies of 15 customers in the past financial year."
Maling said reducing the level of customer rent debt was a priority for Kāinga Ora. "We are reviewing our rent debt policy to prevent customers from building-up large debts in future."
Jake Lilley - a spokesperson for Fincap, the network of financial mentors - said debts to Kainga Ora were common.
"We saw a jump in the median Kainga Ora debt presenting to financial mentors in 2023. It went from $340.50 to $1,416 when compared to 2022.
"While there are several ways these debts can arise we did know of issues filling out paperwork meant some who were entitled to lower charges weren't getting them. This is a bit of a classic 'debt to government' issue, it being a debt that shouldn't really be created which ends up being charged to someone who can't pay it without hardship.
"We're happy with how officials worked with us last year to escalate and resolve such issues whenever financial mentors spotted them. We'd like to see more actions like this across all the departments."
Action Station spokesperson Vanessa Cole said an increase in rent arrears could be expected given the cost-of-living crisis the country has been going through and its impact on lower-income people.
"Even with income-related rents being 25 percent of income, the cost of power bills, the cost of food, means families are having to make tough decisions each week between food, heating and keeping up with rent.
"The government's decision to remove the Sustaining Tenancies framework, which was essentially a homeless prevention strategy, has already seen a ramping up of evictions of Kāinga Ora tenants. Instead of getting to the root cause of why people are in rent arrears - that the cost of living is high, and incomes are not enough to keep up with these costs - the approach of this government has been to get more punitive."
