A $5000 grant to help lure state housing tenants out of Auckland will not be suitable for everyone, Social Housing Minister Paula Bennett says.

Mrs Bennett said the grant might suit some people but told Checkpoint with John Campbell others who had "wrap-around support" should stay put.

The one-off grant for state housing tenants or people eligible for social housing, announced last month by Mrs Bennett, is available from today. The money for relocation costs will not need to be paid back unless a recipient moves back to Auckland within a year.

The Ministry of Social Development said an additional lump sum payment of $2000 or $3000 might also be paid to help clients establish themselves in their new community.

Auckland community and budgeting groups contacted by RNZ News yesterday and earlier today had not yet been approached by their clients about the scheme.

Monte Cecilia Housing Trust, two Auckland budgeting services, Te Puea Marae and a Mangere community advocate said they had not heard from anyone who wanted to apply.

Monte Cecilia Housing Trust chief executive Bernie Smith told Morning Report he thought people should "absolutely turn down the offer".

Mrs Bennett's office said there had so far been about 130 inquiries regarding the $5000 grant, and $750,000 had been allocated to the scheme.

Photo: RNZ / Claire Eastham-Farrelly

Each application would be assessed individually before a decision was made, she said.

"We want to do, of course, individual assessments, to go through a process with them to make sure wherever they are going it's got the support they may need."

Some people might want to move back to their home towns or retirees might want to leave the "rat race" of Auckland, she said.

'We wouldn't recommend it'

Mr Smith, however, said the $5000 wouldn't go far enough for those leaving Auckland.

"As a trust we wouldn't recommend it to families because we believe it is setting them up to fail.

"Once you're in your new location you get a maximum of $2000, which is barely enough to establish yourself in a new community with school uniforms and all the other incidental costs that are involved."

The only situation in which people should take up the offer was if they had a job lined up and a support network to go to, Mr Smith said.

Mrs Bennett said she hoped the incentive would mean some houses in Auckland would become available, which might mean they would then be free for the trust's clients.

"I quite accept this might not actually be good for the people that Monte Cecilia Trust works with.

"I've been there a couple of times, I've met those people and I agree they need a whole lot of wrap-around support and if they're getting that in Auckland we should make sure they keep it."

Mr Smith said he had heard the houses available had already been turned down by others, so they were hard-to-let properties, of questionable quality.

Plan could be extended - PM

Prime Minister John Key said the plan could be extended if there was demand, and he told Morning Report the amount of money allocated to it was only an initial estimate.

"In reality, it's not big money," he said. "The point is yes, if more people wanted to take it, and there were more houses for them to go to, we would just move them."

In a statement, Ministry of Social Development deputy chief executive of social housing Carl Crafar said the grant was a voluntary scheme and people needed to be willing, able and suitable to move.

"As each individual or family's situation is different, how long it will take to make the move will vary. While for some the move may be straightforward, families needing to change schools and move a household will obviously take longer."

Mr Crafar said the value of the additional lump sum payments would depend on whether the client was moving into private accommodation ($3000) or social housing ($2000).

The funding would allow for about 150 people and families to shift out of Auckland, Mr Crafar said.

Location of available state houses unclear

Despite the scheme being launched today, the Ministry of Social Development could not tell RNZ News how many Housing New Zealand houses were available outside of Auckland, and where they were.

"It is too soon to answer this question. The grant is available for any vacant housing, including private rentals, or social housing," the department said in a statement.

At the time she announced the grant, Mrs Bennett said there were dozens of empty houses in other parts of New Zealand, such as Lower Hutt where there were 18 state houses ready to let, Palmerston North where there were 15, and Gisborne with four.

Mr Smith criticised the amount of information that had been made available about the grant.

"There's been very little information at all. And no information that's substantial enough for us to encourage anyone to take up the offer."

Vulnerable people relocated under previous schemes had had very mixed results, Mr Smith said.

"When they're actually in a new location, if there are health issues of mental health, they fall into further despair and often, as has occurred in previous occasions, they drift back to Auckland anyway."

Mr Smith said the most important thing if people relocated was that there were services available to support them, not just houses to move into.

Community Housing Aotearoa spokesman David Zussman, meanwhile, said other solutions were needed for the bulk of the people who needed emergency housing.

"This is not targeted at the people that emergency housing providers and community groups are working with. They're the people we are seeing every day that are in desperate housing circumstances."

He said fundamentally there needed to be many more houses available to offer permanent, affordable housing choices, and there was not enough urgency in dealing with the issue.