Beneficiaries sanctioned with money management cards will often be unable to pay rent, government data shows, putting them at risk of homelessness.

The sanction for non-complying Jobseekers would lock half their benefit into payment cards that cannot be spent on rent - but official statistics from MSD show the average beneficiary is already spending more than 53 percent of their income on housing costs.

MSD confirmed to RNZ the cards - being introduced from 26 May - would see beneficiaries’ Jobseeker payments split, with half going onto a payment card unable to be used on rent.

“The Money Management card will be able to be used at grocery, transport, healthcare (including prescriptions) and education suppliers … [it] cannot be used on other expenses such as rent or utilities,” general manager income Shannon Soughtton said.