Gareth Lawrence Smither (now 51) used knives and a spade to murder Karen Jacobs in July 1997, while her 2-year-old daughter Georgina was nearby.
Last year he was transferred to Waikeria Prison in the Waikato because the family of the victim strongly objected to him being released in Otago, Southland or Christchurch.
Smither was previously denied parole because the board was concerned with the level of support he would receive in the community and the six-month accommodation which had been organised.
The situation now was no different.
"Mr Smither is left in the position where he does not have adequate release accommodation identified, nor do we understand precisely what any community forensic support would be. And so those two pillars, which we thought were essential to a serious consideration of release, are simply not present," board chairman Sir Ron Young said.
"We remain of the view ... that Mr Smither needs long-term supported accommodation. It may well be that the ‘long-term’ is supported accommodation for the rest of Mr Smither’s life," Sir Ron said.
"We would not wish to limit such accommodation need to one or even two years."
The Parole Board heard the inmate had been working for up to four hours a day as a cleaner at Waikeria Prison and his behaviour was "positive".
Smither will see the board again in March next year, but could make an application to bring that date forward.
Ms Jacobs’ body was found by her mother, Maureen Watson, who previously told the Otago Daily Times she had spent the years since the murder caring for her granddaughter, who was haunted by the murder.
