Grant Robertson says the Government is reviewing how it helps low-income people meet the cost of growing rents, fearing most of the current assistance just ends up in landlords' back pockets.
The Accommodation Supplement is being looked at closely as part of a wider review of the Working for Families scheme, the Finance Minister has revealed.
"What we do know about the Working for Families system is it's been in place now for the best part of 15 years - well, 16 years," he told Newshub Nation.
"It's actually a system that's served New Zealand well, but within it, there are components that I think everybody would question, the Accommodation Supplement being a really obvious one - very important for supporting people's needs, but a real question mark about whether it's the best way to deliver accommodation support, given that it tends to end up going towards landlords ultimately."
Rents have consistently gone up over the past decade, regardless of what house prices have been doing. The nationwide median is now at $500, up from $300 a decade ago.
Robertson said as rents rise, so does the Accommodation Supplement on offer.
"Is that really benefiting all of those people? So another example of how you approach that is something like progressive home ownership where you think, 'Well, is there another way of this money coming through that actually might have a better long-term outcome for people?' So they're the kinds of ideas we're looking at."
More than $31 million a week is spent on the Accommodation Supplement, going to 360,000 people - up more than 40,000 in the past year, Stuff reports. Five years ago it cost just $17 million a week.
Around one-in-seven recipients own their own home.
In 2017, a Ministry of Social Development document said nearly 20 percent of all children live in homes that receive the Accommodation Supplement - likely to have gone up since then. Households that receive it typically pay about half their income in rent, that same document showed.
It costs taxpayers more than $1.5 billion a year.
Infometrics chief economist Gareth Kiernan told Stuff the supplement made it possible for landlords to hike rents further, but would be "very complex to unravel".
Robertson said the outcome of the review should be out sometime this term of Government.
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