Benefit increases will still leave families 'locked in poverty'

Kendall Hutt
Source: 1News

April benefit increases will still leave families "locked in poverty", the Fairer Future collaboration says.

The collaboration of largely anti-poverty campaigners compared Welfare Expert Advisory Group (WEAG) family cost estimates - inflation-adjusted for 2022 – to Government estimates of benefit increases in April.

Main benefits will increase by more than 3% on April 1, according to the Government.

However, research released by Fairer Future today found some families will still face shortfalls of up to $300 a week.

The peer-reviewed research considered "core expenditure" – items such as rent, food and transport costs – and "core plus participation" allowances – other items such as sports/fitness, presents and activities for children.

It looked at the original 11 WEAG benefit recipient model households, plus two additions.

Incomes 'particularly inadequate' for private rentals

Fairer Future's research said nine of the 13 households modelled would not be able to meet their core costs in 2022, while incomes look to be "particularly inadequate" for those renting privately.

A couple with three children would require an additional $307 per week to meet their total costs, while a sole parent with three children would require an additional $239 a week.

A single adult living alone receiving Jobseeker due to a health condition or disability, meanwhile, would require an additional $146 a week.

The research also found a couple with three children receiving Jobseeker will need around $300 extra a week to meet their total costs, including children's sport and contingency for unexpected bills.

Fairer Future said this means they are missing well over a quarter of the income they need to be able to live with dignity and participate in their communities.

For them to meet just their core costs, including everyday necessities such as rent, food and power, this household will still need an additional $165 a week.

Child (file photo).

Meanwhile, a sole parent with three children will require about $240 more a week to meet total costs or an additional $111 a week solely to meet core costs.

A single person receiving Jobseeker and sharing a house will need about $90 more every week to cover all costs, and an additional $50 a week to cover core costs.

Without average debt repayments included in the calculations, the research found only one of the 13 households can cover their total costs – the one-parent, one-child family receiving Best Start and sharing a house.

Best Start is additional support for children under the age of three.

Fairer Future's research also said if low repayments of debt were included in the modelling, none of the 13 model households would be able to meet their total costs.

The research has left advocates continuing to call on the Government to make changes to income support.

This includes increasing core benefit levels to the standard of liveable incomes, raising the minimum wage to the level of the living wage, increasing the disability allowance, and wiping debt owed to the Ministry of Social Development.

'So little buffer' for unexpected payments – Citizens Advice Bureau

Andrew Hubbard, deputy chief executive of Citizens Advice Bureau, told Breakfast ahead of the research being released it would show a "really big gap between liveable income and what income support provides".

He said the April benefit increases were "simply not enough".

Hubbard told Breakfast Citizens Advice Bureau sees the impact of income inadequacy on people who are reliant on income supports every day.

He recalled how a mother had approached the organisation for emergency food support after using her food money – her only discretionary income – to buy her children stationery.

"There's so little buffer for the circumstances that happen in life that they then are forced to give up the little discretionary income they have, which is often paying for food, in order to pay for other things."

Hubbard said another "perverse impact" of this income inadequacy was people finding themselves in a "worse spiral" due to unexpected payments, such as their vehicle breaking down and having to turn to a loan shark to cover the cost.

An empty wallet.

Time for Govt to 'level up' income support

Max Harris, a spokesman for Fairer Future, said it is imperative the Government levels up income support to catch up with the rising cost of living.

"These shocking shortfalls are stopping people from living a decent life - but they are not inevitable and most people in New Zealand recognise we have a responsibility to lift families out of poverty."

Fairer Future spokeswoman Brooke Stanley Pao said: "The much-vaunted income support increases will be too little, too late for most people.

"This was predicted, and it's our most vulnerable families and communities who will continue to suffer, at high risk of harm and exploitation, because of this inadequacy."

'Small lifts' won't cover steep rise in living costs - Save the Children

Save the Children's Jacqui Southey said while it is supportive of the upcoming lift in core benefits this week, the "small lifts" won't cover the steep rise in the current cost of living.

Southey said the organisation is "gravely concerned" Kiwi children are not having their basic rights met in the wake of Fairer Future's modelling.

"The grim reality is many families are continuing to try to make do without life's essentials such as healthy food, warm homes or access to health care," she said.

"These necessities are the right of every child under the UN Convention on the Rights of the Child and we urge the Government to commit to further income support for individuals and whānau reliant on welfare support."

'Small, tinkering' changes to income being eroded by living costs - Green Party

Meanwhile, the Green Party has called on the Government to "stop tinkering" and immediately increase benefits to liveable levels.

"As this research from Fairer Future shows, the Government's support system is keeping people locked in poverty - it is a political decision to keep incomes too low to live on," Ricardo Menéndez March, the party's spokesperson for social development and employment, said.

"The Government's April 1 increases to welfare support do not even come close to the transformational reform families need to just survive. Small, tinkering changes are being eroded as the cost of food, rent, power and transport rises out of reach for far too many," he said.

"The Government has a choice: either ensure everyone has what they need or continue locking families in poverty.

"Anything short of a guaranteed liveable income is condemning families to hardship."

The Government responds

Finance Minister Grant Robertson said he was keeping an eye on what was being done in other countries to help people with the increased cost of living.

Overseas, these included the likes of tax breaks and one-off payments.

"With the big boost on April 1, that's similar to some of the things other countries are doing," he said.

"We've got payments that are coming through already, in terms of the Winter Energy Payment, the Family Tax Credit."

When 1News asked what else the Government was considering to help Kiwis, Robertson said he didn't "have a specific thing on the table".

"But, we always keep in mind that we need to support New Zealanders."