Government tightens payout criteria for on-sold Christchurch quake homes

A digger demolishing an earthquake-damaged house on Dallington Terrace, Christchurch. Photo / NZME

By RNZ

The Government is tightening up criteria and timeframes for the On-sold Support Package, a scheme aimed at helping people get back into quake-damaged homes.

The scheme was set up to help homeowners who had bought a home repaired after the Canterbury earthquakes, where those repairs were later found to be inadequate.

The payment - managed by the Natural Hazards Commission (NHC, formerly Earthquake Commission EQC) - was “ex-gratia”, meaning it did not imply the acceptance of liability, and covered the portion of repair costs above the statutory cap of $100,000 plus GST.

It aimed to bring the homes back up to EQC standards.

Applications closed in October 2020 and more than 800 homeowners have had their repairs completed, but hundreds more were still in the process of getting that done, and a further 250 had not yet signed a settlement.

Associate Minister of Finance David Seymour announced changes to ensure “a full stop on the programme in a way that allows applicants fair settlement”.

Act leader David Seymour. Photo / Ben Dickens

“The programme was never intended to continue indefinitely,” he said in a statement. “The Government is making changes to simplify it, encourage timely settlement for these remaining homeowners, and avoid delays that add to programme costs.”

Costs to the Government for the scheme have risen from the initial 2019 estimate of $250m, to $717.9m as of June this year.

The changes include:

• Limiting settlement amounts to 1.5 times the current rateable capital value of the property
• New deadlines: settlement deeds must be signed within 30 business days of the offer being made, and construction must start within six months of agreement
• Project management costs before construction starts are limited to 4% of the total payment
• From December 23, a further limit will be applied if the homeowner has bought another new home

“The amount of the repair grant that can be repurposed will be limited to the market value of the buildings at the on-sold property - assuming the damage eligible for remediation through this programme did not exist - plus the costs of demolishing the damaged on-sold property.

“The other existing parameters for, and limits to, these alternative settlement payments will continue to apply and NHC will continue to verify the appropriateness of proposed costs on behalf of the Crown.

“I’m happy that we’re delivering an outcome that benefits everyone - with remaining applications on track without creating more costs for taxpayers,” Seymour said.

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