It comes after Corrections Minister Kelvin Davis said in 2019 the agency wouldn't be reviving a tattoo removal scheme in prisons which was scrapped in 2006.
That scheme was scrapped after it was revealed that mobster John Gillies - who stabbed a Gisborne constable in the neck, chest and thigh in 1993, and bashed two more police officers in 2004, had his "Mongrel Mob Forever" and bulldog tattoo removed from his face, at a cost of $4500 to the taxpayer.
Also, from 2001 to 2004, taxpayers spent almost $250,000 on removing tattoos from 400 inmates, despite studies suggesting it has had virtually no impact on re-offending and in some cases may have made it easier for people to commit crime.
Since then, instead of the Government funding tattoo removals Davis said laser technicians would be able to volunteer their services to give prisoners a significant discount to have their tattoos removed.
And they could do it in-house, and pay from the wages they earned from work they did in prison.
Some businesses charge inmates as little as one-sixth of the market rate for a session - bringing the price down from $300 per session to around $50.
"For a prisoner to come up with $50 a session is a lot of money for them, and it just means — excuse the pun — they've got skin in the game," Davis told Newstalk ZB at the time.
However, this new set of funding is to support tattoo removal on the face and hands for individuals facing financial hardship and when the tattoos are hindering their access to employment.
"This is a youth-focused initiative and any person who wants to access the funding must meet certain criteria with regard to age, their recent behaviour, their placement in a prison within the region and proof that their financial position is at a level where funding will be considered," a Corrections spokesperson said.
"Each application is considered on a case by case basis. Other prisoners can still access the tattoo removal programme and pay a discounted rate from a local or regional provider. Payment for this service is arranged between the provider and their client."
The spokesperson said while Corrections hadn't made any public announcements about the fund, prisoners in the lower North Island were well aware of its availability.
"This youth initiative is supported from the region's base funding and while it is currently on hold due to Covid-19, it is regularly assessed for its benefits and usefulness."
Waikato Mongrel Mob member Mula Mohmand has been a member of the gang for 15 years and has just started a tattoo removal business in Tauranga.
He told Open Justice he had a few clients who were still in the Mob, but were wanting to have some of their gang tattoos removed.
"A few of them have got them done really young, but times have changed and a lot of the members are trying to integrate more into society these days," he said.
"I had a guy who's patched, he's got two daughters and there was a family day event at school and he was too embarrassed to go."
Mohmand said a decade ago having the gang's insignia removed from your skin might have been frowned upon. But it was becoming less of an issue.
He has Mongrel Mob tattoos on his back and calf.
"There's a sense of belonging you have from getting it done," he said.
"Some chapters will make you wait at least 13 years before you're allowed to get anything on your face, but other chapters you can get it whenever."
While he's just getting his own business set up and isn't working inside prisons yet, he's open to the idea and says the funding is a really good start.
"I know a lot of people who want to get rid of their tattoos, gang and other foul-looking tattoos. They want to change their ways."
