Aucklanders being put up in motels on the taxpayer dollar because of housing shortages are ripping the system off - pocketing the money and not staying in the accommodation provided.

Those claiming emergency housing help get granted money to spend a week in a designated motel - which is usually paid directly by Work and Income.

But the Ministry of Social Development said it was dealing with moteliers who were paid then found the person did not use the room but turned up and demanded the motelier give a refund - cash in the hand, instead of paid back to WINZ.



If the motelier paid up that could be a more than $2000 windfall to the person, courtesy of the Ministry of Social Development.

GOOGLE EARTH West Auckland's New Haven Motel stopped accepting emergency housing seekers.

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The Ministry's Auckland commissioner Blair McKenzie said the practice was "fraudulent behaviour and completely unacceptable".

He said the "small number" of moteliers the Ministry knew had been defrauded had been advised against making further refunds.



"We would encourage any other provider to contact their local Work and Income office should they have any concerns," he added.

Manager of the Manukau Motor Lodge, Tony Kim, said he had been asked for a cash refund "several times" this year.

But he had not handed over the money.

"We got a kind of funny feeling about those people, they were very indirect," he said.

After checking their bookings, Kim said their nights' accommodation had been paid for directly by Work and Income.

"It's our policy to only refund money into the account it came out of," he said.

All other motel managers spoken to that accepted emergency housing bookings said they had also experienced the same practice.

The owner of Avondale's New Haven Motel, who did not want to be named, said fraudulent behaviour was "just one of the reasons" he stopped letting emergency housing seekers stay at his place.

"When we still accepted them, 80 per cent would cause headaches," he said, citing theft, fights, and room damage as the main problems he had experienced as a result of sheltering the desperate.

He said that people would also come to the motel asking for business cards "to give to WINZ as proof they slept here" and justify getting paid an emergency housing grant.

"They tell us that we - the motel - don't lose anything by telling WINZ they slept here. Nevertheless we don't do it," he said.

"I don't know what they spend the money on instead but it's certainly not what the tax payer or government thinks it is - and that is fraud."

In some instances, those claiming the emergency housing funding slept in their cars in the carpark of motels - indicating they did have genuine housing issues, but the lure of getting cash in the hand over rode the desire for a warm bed.

Mckenzie said where the Ministry became aware money was refunded directly to the client, "the client will need to repay this to the Ministry".

Auckland sees around 280 emergency housing requests granted each week, for seven days at a time.

The grant is "last resort assistance" for people who cannot access accommodation in the short-term, according to Work and Income's website, and in some circumstances it must be paid back.