A Newshub investigation has revealed that Work and Income has been referring tenants to a property manager who is charging hundreds of dollars for illegal garage rentals in south Auckland.
The garages are rented for between $250 and more than $550.
Auckland Council has confirmed that several of the garages rented out by so-called property manager Debbie Iskandar do not have the necessary building consents or permits for people to live in and are, therefore, illegal conversions.
Tenants have told Newshub that Work and Income recommended Ms Iskandar for rental accommodation, and in some cases staff even gave them her business card.
One tenant said that Work and Income paid her $2000 bond for the illegal garage conversion she rented off Ms Iskandar and she paid more than $400 a week for it.
Ngareta, a former tenant of Ms Iskandar’s, said she went to Work and Income to ask how to get on the waiting list for a state house.
"They told me if it was really urgent to ring that number and they gave me her card."
She ended up renting two different garages from Ms Iskandar. Auckland Council has confirmed neither have any consents or permits for people to live in.
Ngareta said her benefit was $324.10 a week, including her accommodation supplement, and she paid $280 of that each week to Ms Iskandar for her half-share of the garage rent.
She believes Work and Income should not be recommending the property manager saying "she is just ripping people off".
Another former tenant, Jacine Greaves, who rented an illegal garage conversion from Ms Iskandar, says she also had part of her benefit and accommodation supplement paid directly to Ms Iskandar by Work and Income at her own request.
It means Ms Iskandar is receiving thousands of dollars of taxpayer money for illegal and dubious rentals.
One Manurewa property that Ms Iskandar is renting out for $280 a room is allegedly not hers to let. It is managed by Barfoot and Thompson, and neither the company nor the house owner knew Ms Iskandar was subletting it to multiple tenants until Newshub approached them.
The Ministry of Social Development's deputy chief executive Ruth Bound says the ministry is taking the concerns raised by the Newshub investigation "seriously".
"And we are looking into this further, as well as contacting our clients to see how we can help."
Ms Bound maintains that Work and Income stopped directing clients to Ms Iskandar six months ago, but Newshub has spoken to a tenant who was referred to Ms Iskandar as recently as April.
The ministry won't say why it stopped directing clients to Ms Iskandar or disclose how much taxpayer money she has received in rent or for bonds, citing privacy reasons.
Newshub understands Ms Iskandar is a registered supplier with Work and Income. That allows her to receive direct payments from Work and Income made on behalf of its clients.
But Work and Income says registered supplier status is not about vetting the accommodation. It says: "individuals need to make their own informed decisions before entering into a tenancy agreement."