Rent increases have made all low-income groups in Auckland except superannuitants worse off in real terms than they were five years ago, according to the Salvation Army.
A report by the army's social policy analyst Alan Johnson shows rents for the cheapest quarter of rented homes in the former Auckland City have risen faster than average since 2008 - by 21.6 per cent for three bedrooms and 25 per cent for two bedrooms in the lower quartile, in a period when median rents across Auckland rose by 17 per cent and consumer prices by only 12.5 per cent.
But benefits have been adjusted only in line with consumer prices, and the maximum rates of accommodation supplement have not changed since 2005.
The result is that five out of six low-income groups examined in the report are now worse off in real terms than they were five years ago by amounts ranging from $1.33 a week for a single sickness beneficiary renting a one-bedroom flat to $33.64 a week for an unemployed couple with three children renting a three-bedroom house, both at lower-quartile rents.
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The only group that is better off, by $20.67 a week, is single superannuitants renting a one-bedroom flat, also at the lower-quartile rent. Super is linked to average wages, which rose 17 per cent in the past five years in line with median rents.
The report, Give Me Shelter, calls for a fundamental rethink of housing policies "to ensure that all New Zealanders have access to secure housing of an acceptable standard which they can reasonably afford".
The report says New Zealand spends a high amount by world standards on housing subsidies - $1.1 billion on the accommodation supplement, which is paid to 35 per cent of all private-sector renters including 54,000 working households, and almost $700 million on subsidising income-related rents for state tenants.
But it says successive governments have failed to spend this most effectively.
Social Development Minister Paula Bennett said any review of the accommodation supplement "would require careful consideration because the fiscal impacts of any changes are considerable and one impact could be to drive up rents".
"Next year Work and Income will take over the needs assessments from Housing NZ," she said.