Housing New Zealand tenants who were wrongly penalised for meth contamination in their state homes will be reimbursed and receive a formal apology from the agency.

Housing Minister Phil Twyford, acting HNZ chairman Vui Mark Gosche and HNZ chief executive Andrew McKenzie today released a report into the response of HNZ to methamphetamine contamination in their state homes.

Twyford said HNZ had acknowledged around 800 tenants suffered by either losing their tenancies, their possessions, being suspended from the waiting list, negative effects on their credit ratings, and even being made homeless as a result of the testing regime used by HNZ.

"Housing New Zealand is committed to redressing the hardship these tenants faced. This will be done on a case by case basis and the organisation will look to reimburse costs tenants incurred, and make discretionary grants to cover expenses such as moving costs and furniture replacement," Twyford said.

"They will also receive a formal apology from Housing NZ."

HNZ is also considering establishing a fund that affected tenants and their families to pay for addiction and rehabilitation services or other support.

HNZ admitted that its previous zero tolerance approach was wrong and ignored many of the issues that put people into state houses in the first place.

"Housing New Zealand failed, in some individual cases, to follow the principles of natural justice, by applying its suspension policy without providing sufficient detail to allow tenants to respond meaningfully tto a notification that they were being considered for suspension.

"Housing New Zealand failed, in some individual cases, to take sufficient care in examining methamphetamine test results before seeking to end a tenancy," the report, produced by HNZ, said.

HNZ estimated each tenancy would receive between $2500 and $3000.

McKenzie said the report showed HNZ's previous approach had poor outcomes for tenants and their families.

"I apologised in June and we do so again to those tenants and their families who had their lives disrupted.

"We plan to put things right and that means not just looking to rehouse those tenants who had their tenancies ended but to provide other forms of assistance."

HNZ would establish a team dedicated to implementing its assistance programme.

In May, the Prime Minister's then Chief Science Adviser Professor Sir Peter Gluckman produced a report which said there was no evidence that third-hand exposure from methamphetamine smoking caused adverse health effects.

The report found remediation in most cases was needed only in homes that had been former clan labs producing the drugs and where meth had been heavily used.

The report said levels that exceeded the current standard of 1.5mcg/100cm2 should not signal a health risk and exposure 10 times higher (15mcg/100cm2) would also be unlikely to have any adverse effects.

Because the risk was so low, testing was not warranted in most cases.

Hundreds of tenants in private rentals and social housing were penalised for the cost of remediation following positive meth tests.

Twyford said at the time that the new regime would make 200 previously unsafe Housing New Zealand houses available and save HNZ around $30 million a year in testing and remediation.

In June, McKenzie also said tenants who incurred costs should be paid back, and apologised to tenants whose lives were disrupted by evictions based on bogus methamphetamine levels.

HNZ's blacklist of tenants banned from going into state houses because of meth contamination issues was also wiped.

He estimated at the time that about 300 HNZ tenants in three years had been evicted where meth had been a factor. Some had been rehoused but others were not.

Following the release of the Gluckman report, the Drug Foundation called for compensation for tenants unfairly penalised by an eviction or remedial costs.