"They will also receive a formal apology from Housing NZ."
HNZ is also considering establishing a fund that affected tenants and their families to pay for addiction and rehabilitation services or other support.
HNZ admitted that its previous zero tolerance approach was wrong and ignored many of the issues that put people into state houses in the first place.
"Housing New Zealand failed, in some individual cases, to follow the principles of natural justice, by applying its suspension policy without providing sufficient detail to allow tenants to respond meaningfully tto a notification that they were being considered for suspension.
"Housing New Zealand failed, in some individual cases, to take sufficient care in examining methamphetamine test results before seeking to end a tenancy," the report, produced by HNZ, said.
HNZ estimated each tenancy would receive between $2500 and $3000.
McKenzie said the report showed HNZ's previous approach had poor outcomes for tenants and their families.
"I apologised in June and we do so again to those tenants and their families who had their lives disrupted.
"We plan to put things right and that means not just looking to rehouse those tenants who had their tenancies ended but to provide other forms of assistance."
HNZ would establish a team dedicated to implementing its assistance programme.
McKenzie said it was time to put the heart back into social housing, and called for tenants to get in touch with HNZ.
"Housing New Zealand wants to be a compassionate landlord."
He estimated that about 2400 people, from 800 tenancies, had been kicked out of their state houses because of the policy.
He acknowledged that was a "shameful" number.
Twyford said he held the former government responsible for the "fiasco".
No one at HNZ would lose their jobs.
"This was an organisational failure. It recognises that its zero tolerance approach was wrong," Twyford told reporters.
If he felt the agency was shirking its responsibility, he would have fired people.
Twyford said it was clear that HNZ had been told by the previous government that it should operate with a zero tolerance approach.
"It's not about punishing individuals."
HNZ had adopted a new approach which put tenants at the heart of its work, Twyford said.
The minister said it was not clear whether anything could be done for other tenants who were dealt with through the Tenancy Tribunal, because the tribunal was part of the judiciary and the Government couldn't step in there.
Gosche, who was appearing because chairwoman Adrienne Young-Cooper was overseas, said the board offered a heartfelt apology.
She had not offered to resign, Twyford said.
In May, the Prime Minister's then Chief Science Advisor Professor Sir Peter Gluckman produced a report which said there was no evidence that third-hand exposure from methamphetamine smoking caused adverse health effects.
The report found remediation in most cases was needed only in homes that had been former clan labs producing the drugs and where meth had been heavily used.
The report said levels that exceeded the current standard of 1.5mcg/100cm2 should not signal a health risk and exposure 10 times higher (15mcg/100cm2) would also be unlikely to have any adverse effects.
Because the risk was so low, testing was not warranted in most cases.
Hundreds of tenants in private rentals and social housing were penalised for the cost of remediation following positive meth tests.
Twyford said at the time that the new regime would make 200 previously unsafe Housing New Zealand houses available and save HNZ around $30 million a year in testing and remediation.
In June, McKenzie also said tenants who incurred costs should be paid back, and apologised to tenants whose lives were disrupted by evictions based on bogus methamphetamine levels.
HNZ's blacklist of tenants banned from going into state houses because of meth contamination issues was also wiped.
He estimated at the time that about 300 HNZ tenants in three years had been evicted where meth had been a factor. Some had been rehoused but others were not.
Following the release of the Gluckman report, the Drug Foundation called for compensation for tenants unfairly penalised by an eviction or remedial costs.
