Tenant has subsequent change but notice already issued
If a housing provider has issued a notice to a tenant that they are going to change the rent charged, and that tenant has a subsequent permanent change in circumstances (during a notice period) which means the rate of Income Related Rent will change further, you need to activate the new rate of Income Related Rent.
Kāinga Ora (Housing New Zealand)
Where the provider is Kāinga Ora and the subsequent change is an increase in Income Related Rent, the initial change will not be applied to the rent charged. Kāinga Ora will advise the tenant of the new rent amount and the effective date of the change. Kāinga Ora should also advise the tenant that the earlier notice of rent change no longer applies.
If the subsequent change is a decrease to the rate of Income Related Rent, the reduction will be applied from the next rent effective date.
Community housing providers
When there is an increase to the Income Related Rent, community housing providers will apply the initial change in rent charged from the first rent effective date after the initial notice period.
The Community housing providers will advise that tenant of the subsequent change to the rent amount and this amount will be charged from the end of the second notice period.
If the subsequent change is a decrease to the rate of Income Related Rent, the reduction will be applied from the end of the second notice period.
Example 1: Kāinga Ora tenancy - subsequent change before notice period ends (increase)
A tenant in a Kāinga Ora property has an increase in income before the notice period for a previous increase has ended. As a result of this overlap, the tenant is not charged the Income Related Rent calculated at the first review.
The tenant continues to pay their current rate of Income Related Rent until the first rent effective date (Thursday) after the 61-day period from the second review.
6 March 2023 | 3 May 2023 | 7 May 2023 | 11 May 2023 | 4 July 2023 | 6 July 2023 |
Review 1: MSD determines that the increase in income seen over the previous 8 weeks is a permanent change and reviews the client's Income Related Rent. Income Related Rent reviewed to $124 (effective no earlier than 11 May 2023 - first rent effective date after the end of the 61-day period on 7 May 2023). | Review 2: MSD reassesses the client's Income Related Rent after a further 8 weeks as there has been a subsequent increase in the client's income. Review 2 is activated by MSD (provider and client notified). Income Related Rent reviewed to $135 (effective no earlier than 6 July 2023 first rent effective date after the end of the 61 day period on 4 July 2023). | End of 61-day period for Review 1 calculated by CMS (+ 1 system day) | The earliest rent effective date for Review 1 is the Thursday following the 61-day period. The Income Related Rent from Review 1 is not charged by the provider. The provider advises the client that the earlier notice of rent change no longer applies. | End of 61-day period for Review 2 calculated by CMS (+ 1 system day) | The earliest rent effective date for Review 2 is the Thursday following the 61-day period. The provider charges Income Related Rent from Review 2 from this date. |
CMS will calculate the 61 day period + 1 system day for Review 1 as 6 March 2023 to 7 May 2023 | |||||
CMS will calculate the 61-day period + 1 system day for Review 2 as 3 May 2023 to 4 July 2023 | |||||
Rent charged | |||||
Current Income Related Rent = | Current Income Related Rent = $115 | Current Income Related Rent = $115 | Current Income Related Rent = $115 | Current Income Related Rent = $115 | New Income Related Rent = $135 |
Example 2: Community housing provider tenancy - subsequent change before notice period ends (increase)
A tenant in a community housing provider property has an increase in their income before the notice period for a previous increase has ended.
The first increase in rent is charged end of the initial 61-day period.
Community housing providers will advise that tenant of the new rent amount and the effective date of the change. They will apply the subsequent change at the end of the second notice period.
6 March 2023 | 3 May 2023 | 7 May 2023 | 4 July 2023 |
Review 1: MSD determines that the increase in income seen over the previous 8 weeks is a permanent change and reviews the client's Income Related Rent Income Related Rent reviewed to $124 (effective 7 May 2023) | Review 2: MSD reassesses the client's Income Related Rent after a further 8 weeks as there has been a subsequent increase in the client's income. Review 2 is activated by MSD (provider and client notified) Income Related Rent reviewed to $135 (effective 4 July 2023) | End of 61-day period for Review 1 calculated by CMS (+ 1 system day) The Income Related Rent from Review 1 is charged by the provider from this date | End of 61-day period for Review 2 calculated by CMS (+ 1 system day) The provider charges Income Related Rent from Review 2 from this date |
CMS will calculate the 61-day period + 1 system day for Review 1, as 6 March 2023 to 7 May 2023 | |||
CMS will calculate the 61-day period + 1 system day for Review 2, as 3 May 2023 to 4 July 2023 | |||
Rent charged | |||
Current Income Related Rent = $115 | Current Income Related Rent = $115 | Current Income Related Rent = $124 | New Income Related Rent = $135 |
Example 3: Kāinga Ora or community housing provider - tenancy subsequent change before notice period ends (decrease)
In this example, the tenant has a decrease in income before the notice period for a previous increase has ended. As a result of this overlap, the decrease in Income Related Rent is not able to be applied from the next rent effective date, which is a Thursday.
The tenant continues to pay their current rate of Income Related Rent until the 61-day period from the second review has ended. At this point, the Income Related Rent calculated at the second review is charged.
The tenant is issued a refund for the period between the date of change in circumstances for the second review and the date the reduced Income related rent takes effect.
2 January 2023 | 6 Feb 2023 | 9 Feb 2023 | 5 March 2023 |
Review 1: MSD determines that the increase in income seen over the previous 8 weeks is a permanent change and reviews the client's Income Related Rent. Income Related Rent reviewed to $250 (effective from 5 March 2023) | Review 2: MSD reassesses the client's Income Related Rent immediate due to a subsequent decrease in the client's income Review 2 is activated by MSD (provider and client notified) Income Related Rent reviewed to $54 (effective from the next rent effective date) | Rent effective date for Review 2 - Income Related Rent from Review 2 is charged by the provider Review 1 is ceased | End of 61-day period for Review 1 calculated by CMS (+ 1 system day) No action taken |
CMS will calculate the 61-day period + 1 system day for Review 1, as 2 January 2023 to 5 March 2023 | |||
Rent charged | |||
Current Income Related Rent = $200 | Current Income Related Rent = $200 | New Income Related Rent = $54 | Current Income Related Rent = $54 |
