New housing allowances will save more than $200,000

Parliament's new system for ministerial housing allowances is expected to save more than $200,000 a year, documents released today show.

Prime Minister John Key ordered a review of the allowances and announced in September ministers who didn't live in Wellington would get a fixed amount of $37,500 a year.

That followed publication of expenses that were being claimed, a row over Finance Minister Bill English's arrangements and revelations that the old system had evolved into a complicated mess.

Background papers released today by the Department of Internal Affairs say anticipated savings will be $24,800 this financial year and $206,300 in the 2010/11 year.

The papers confirm that the department intends reviewing its options to retain or sell several ministerial houses it owns, but it says ministers currently living in them are expected to stay there until at least the next general election.

They reveal that Transport Minister Steven Joyce, who lives in a cottage in the grounds of the prime minister's official residence, Premier House, intends vacating it next year.

He will move on to the $37,500 allowance and the cottage won't be used as an official residence.

"Appropriate alternative uses are under current consideration," the papers say.