Over the past three years, 397 state house tenancies have been ended because the tenants were being dishonest about their circumstances.
Housing Minister Phil Heatley says investigations found the former tenants had obtained a state house or taxpayer-subsidised rent by lying about their circumstances.
The investigations found people had failed to advise Housing New Zealand about income from employment, business interests, assets and sub-letting their tenancy.
Mr Heatley says the state housing system is designed to help people in their time of need and it is unfair and unacceptable for people to abuse the system and commit fraud to get benefits they are not entitled to.
People who deliberately rip off the system deprive families in real need, he says.
Housing New Zealand has approximately 70,000 state homes and has overpaid $13.7 million in rent subsidies over the past three years.
Since July 2010, it successfully prosecuted 119 tenants for fraud, three of whom were jailed and 22 received home detention. Another 21 are awaiting sentence.
One tenant was found to own two properties including a holiday home; in another case, two tenants lived together as a couple in one tenancy while sub-letting the other.
