The Wellington family home of Finance Minister Bill English has been deemed an official ministerial residence by Internal Affairs and the Crown is leasing the house back from the English family trust that owns it.
The new designation after the election in November has enabled Mr English to maximise the taxpayers' ministerial housing subsidy, and get more than the $24,000 he would otherwise have been limited to - likely to be over $47,000 this year.
The previous practice of Internal Affairs was to limit out-of-town ministers living in their own Wellington properties to the $24,000 maximum of an ordinary MP.
A day after the May 28 Budget, a new rule on ministerial housing was gazetted stipulating that an out-of-town minister who did not take up an official residence was effectively limited to $24,000.
Mr English's spokesman said yesterday that because the house had already been designated an official residence, the new rule did not apply to him.
The treatment given to Mr English is special; other ministers are allocated houses from a diminishing pool of Crown stock, such as historic houses in Bolton St or Pipitea St, or are offered free accommodation in privately owned apartments in blocks such as the plush Kate Sheppard apartments across the road from Parliament.
On the basis of figures released last week, Mr English can expect more than $47,000 a year for the house.
The value of the lease was based on an independent valuation.
The house in Karori was bought by an English family trust in 2007 and the rating valuation is $1.2 million.
Mr English, MP for Clutha Southland, and his wife Mary, a Wellington GP, have lived there for two years with their six children and have lived in Wellington for many years.
Mr English showed signs of frustration yesterday.
"After four days of discussing this issue there are bigger things going on in the country like a recession, like thousands of people joining the dole and I think it is time that ministers like myself were focused on those issues."
Despite Prime Minister John Key on Monday ordering a review of the rules around ministerial housing, the controversy gained momentum yesterday over ministers renting out their flats to backbenchers.
For example, Housing Minister Phil Heatley receives rent from Taupo MP Louise Upston and Defence Minister Wayne Mapp receives rent from Kanwaljit Singh Bakshi.
The rents are paid from the MPs' taxpayer subsidy.
Many MPs rent apartments in Kelvin Chambers, about 50m from Parliament, from ministers or other landlords.
Having a minister as a landlord does not increase the amount of taxpayer funding. It just means two reliable sources of taxpayer funding for ministers - for their own ministerial homes and from rental income.
Mr Key said on Monday that there was a strong argument for reducing the ministerial housing allowance if the minister already had accommodation in Wellington.
That did not find favour with Police Minister Judith Collins, who said offsetting the cost of her ministerial residence meant she would lose out on the "pretty large" mortgage on her private residence.
Dr Mapp said he could see why the public would expect him to use the rent from his privately owned Wellington apartment to offset the cost of his taxpayer-funded official ministerial residences.
Asked why he did not do this voluntarily, he said there were "legal issues" that prevented him from doing so, because the apartment was owned by his Superannuation trust that did not pay out until he was 65.
The money-go-round of ministers renting to fellow MPs is not new, with Labour MP Chris Carter, a former Housing Minister, saying he did it for a few months while in Cabinet until he sold the private property.
Labour leader Phil Goff also said that when he was a minister he lived in a ministerial residence and rented out his flat, though not to an MP.