Social housing organisations which help to get their tenants off welfare or keep their children in school could be rewarded with greater funding for housing developments, Social Housing Minister Paula Bennett says.

The Government has a long-term plan of introducing "milestone payments" for non-government providers which improved the social outcomes of their tenants.

Speaking to the Herald today, Ms Bennett said her immediate priority was increasing the supply of social housing.

She yesterday attended a dedication ceremony for 50 pensioner flats in Royal Oak, which are among 508 Government-subsidised social units being built in Auckland. The Government was now tendering for 1000 more social housing units.

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Ms Bennett said the next step would be looking at rewards for social housing providers' performance.

"We will be looking at certain outcomes for people and that's where they might see milestone payments," she said.

"We haven't started those negotiations yet, we have been more concentrated on the building."

She said the milestones could include keeping a child in school, eliminating violence in a household, or keeping a person from a welfare-dependent household off the benefit.

"We would be looking at community housing providers who are able to turn people's lives around over a long period of time because we can see what's good for them but also what's good for the government's books."

This approach was already used in youth services, where organisations were rewarded if a child remained in school for six months.

"I do see us being able to do that sort of thing via housing in the future," Mrs Bennett said.

Organisations which received the payments would be able to reinvest that money in housing.

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Community House Aotearoa director Scott Figenshow said he was sceptical about the proposed policy.

He said the costs of improving tenants' social outcomes should be recognised "up front" in contracts with providers, not as an incentive payment.

"On one hand while you would want to see providers with an incentive to do things that ... are legitimately good for tenants and families, you don't want to create some perverse outcomes.

"One of the worries is that providers have been telling Government what they think their true cost is. Government is still saying in some cases that's too expensive. It doesn't work when Government holds all the cards."

He said simply keeping a vulnerable or difficult tenant in stable accommodation was often a strong outcome in itself, but it would not attract any incentives under the scheme proposed by Ms Bennett.