The NSW Government is taking a tough stance on the "churn'' of people from social housing to homelessness and is driving reform for an automatic rent deduction scheme from Centrelink payments.

Ahead of today's meeting of State, Territory and Commonwealth ministers, NSW Minister for Social Housing Brad Hazzard said it was time for governments to take steps to stop thousands of vulnerable households ending up homeless because they repeatedly failed to pay their rent in social housing.

"There are thousands of people who churn every year through social housing, rent arrears, eviction and homelessness and then the whole cycle starts again as State Governments and charities pick up the pieces, spending hundreds of millions of dollars a year on homelessness services," Mr Hazzard said.

The proposal before housing ministers is for rent to be deducted automatically by the Commonwealth for the more than 90 per cent of tenants in social housing who receive Centrelink benefits as their main income. An automatic rent deduction scheme is backed by the Commonwealth.

Rent in social housing is set at between 25-30 per cent of income. Nationally, the social housing system loses $30 million a year in rent arrears. In 2013-14, across Australia 7,900 people in 3800 households were directly impacted by failed tenancies due to rent arrears; some 44,000 people in 21,000 households experienced significant housing instability in the past five years due to rent arrears.

Existing voluntary rent deduction schemes have failed to stop the churn . In NSW, 80 per cent of evicted tenants in 2013-14 had previously participated in a voluntary scheme, but had then withdrawn and fallen into significant rent arrears.

Mr Hazzard said it was time to stop the churn and put a secure roof ahead of concerns about personal choice.

"I see too many children who have had their lives upended, their schooling disrupted and their health compromised by their family's inability to pay rent and maintain a secure home," Mr Hazzard said.

"There are times when Governments have to make decisions for the common good and that is why we are driving this across-the-board reform."

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