Social housing changes a tax on the poor that will create further hardship and homelessness
The Salvation Army says proposed changes to New Zealand’s social housing system risk placing additional strain on people already facing significant hardship.
Announced ahead of Budget 2026, the reforms include increasing income-related rent for social housing tenants from 25 percent to 30 percent of household income from April 2027, alongside wider changes to how housing need is assessed and how people move through the system.
“These increases in rent are effectively a tax on people who are already struggling. The proposal shifts money from one group of low-income vulnerable people to another. This doesn’t improve levels of poverty and hardship – it just shifts them around,” says Bonnie Robinson, Director of The Salvation Army’s Social Policy and Parliamentary Unit.
“We are extremely concerned about what this will mean for people on the ground. These are households already living on very tight budgets,” adds Bonnie. “For many, even a small increase in rent can mean going without basics like food, heating, or transport.”
Modelling indicates around 84,000 social housing households will be worse off under the changes.
“For the people we support, this isn’t just a policy shift, it affects day-to-day survival. It can mean increased debt, greater stress, and harder choices about how to get through the week in terms of the basics such as food and heating.”
The government has also signalled changes to needs assessments to prioritise those with the most complex barriers to housing, as well as exploring tenancy reviews and potential duration expectations.
The Salvation Army supports prioritising those in greatest need, but says the proposed shift away from low income alone being a criteria for accessing housing shows a misunderstanding of the purposes of social housing – which has always been to provide people on low incomes with safe, warm, and affordable housing that allows children to remain in stable schooling, for example.
“Private rental housing is often very unstable,” says Bonnie. “It is highly concerning for the welfare of many low-income families if only being poor is no longer sufficient grounds to get a social house.”
The Salvation Army acknowledges the complex needs of many people seeking social housing, but the solution is increasing wraparound support, not reducing assistance for less complex vulnerable households.
“Many tenants do need more than a roof. Stable housing often depends on access to mental health support, addiction services, and budgeting advice. Without these, the risk of tenancy breakdown increases.
“As a significant provider of housing and other social services, we are always open to suggestions of how to improve the housing system. But it’s critical these changes strengthen the support available to our clients and don’t destabilise it,” says Bonnie. “Given the potential serious impact of these proposals, we urge engagement with the sector immediately if this is to go ahead.”
The Salvation Army Territorial Media Officer, 021 945 337, email: media@salvationarmy.org.nz (The Media Officer responds to enquiries from media outlets and journalists. If you would like to donate, are in need of help, or have some other non-media-related enquiry, please call 0800 53 00 00.)