Borrowing while receiving Accommodation Supplement in New Zealand

What Accommodation Supplement is

It is a weekly payment from Work and Income towards the cost of rent, board, or owning your home. It is not taxed, and it does not have to be paid back.

Because it is aimed at housing costs, a lender will usually treat it differently from wages. Some count it when judging your regular income, others do not, so ask any lender how it is assessed.

Who can receive it

The Work and Income page says you need to be at least 16, a New Zealand citizen or permanent resident, and living in New Zealand with the intention to stay. You also have to pay at least a minimum amount towards accommodation each week.

You cannot get it if you pay rent for a public housing property from Kāinga Ora or an approved community housing provider. Your income, assets, costs, household and location all affect the result.

• Single people can hold no more than NZ$8,100 in cash assets, and couples or sole parents no more than NZ$16,200, according to the page at the time it was read.
• The weekly maximum on the page ranges from NZ$70 to NZ$305 depending on situation and area.
• Your partner's income counts towards the assessment.

How to apply

New clients can apply online through MyMSD or complete the Extra Help application form with proof of costs, and can also phone Work and Income. People already on a benefit or Disability Allowance use the Accommodation Supplement application form instead, and students apply through StudyLink.

If you apply within 20 working days of first contacting Work and Income, payments can be backdated to that first contact date. Keep your tenancy agreement or rent receipts to hand.

The page does not set out in full which other payments can be received alongside the supplement. Work and Income says it will check this for new applicants, and existing clients should confirm it with the agency, so ask rather than assume.

Why the amount matters before you borrow

Think of the payment as already committed to rent. A loan repayment that depends on it can push you into arrears if your tenancy, household or earnings change, because the supplement is reassessed when circumstances change.

Before applying for credit, list your weekly income, subtract rent and essential bills, and see what is left. If the remainder is small, a loan is likely to make things harder, not easier.

Also consider the timing. A lender will usually want to see recent bank statements, and a change in your rent or household can alter the supplement before a loan is paid off. Ask yourself whether you could still meet the repayment if the weekly amount fell.

Help from Work and Income when the problem is short term

If the need is a one-off essential or emergency cost, Work and Income can sometimes pay an advance of a benefit, which must be repaid. Ask about it when you phone, and also ask whether any grant could cover the cost without repayment.

Work and Income assesses each case, and conditions change, so rely on its own pages and staff for the latest rules.

An illustration

Take a renter on Jobseeker Support whose Accommodation Supplement arrives each week and whose heater has broken before winter. A high-cost lender offers cash within the day.

A better first step is to ask Work and Income about help for the heater and to book a free call with a financial mentor. If borrowing is still needed, a no-interest or credit union option is worth comparing against the quick offer. This scenario is only an example.

Free support and warning signs

MoneyTalks, reached on 0800 345 123 or by text to 4029, connects people with free financial mentors who can look at your budget and housing costs. Use it before signing anything.

Be wary of anyone who wants your benefit payment redirected to them, asks for fees before a loan is approved, or promises approval without checking your income.