ZB

Benefits need to be up to $165 higher a week, advocacy group says

Author
Isaac Davison, NZ Herald,
Publish Date
Tue, 29 Mar 2022, 10:24am
(Photo / Getty Images)
(Photo / Getty Images)

Benefits need to be up to $165 higher a week, advocacy group says

Author
Isaac Davison, NZ Herald,
Publish Date
Tue, 29 Mar 2022, 10:24am

A New Zealand family on a benefit needs an estimated $165 more a week just to get by - even after increases kick in this week. 

And once the cost of participating in society was taken into account, they were up to $300 short each week. 

The second of two benefit increases worth up to $55 a week will be introduced on Friday. 

But analysis by advocacy group Fairer Futures said most beneficiaries would still not be able to cover basic costs, let alone live with dignity. 

In the worst case, they faced shortfalls in the hundreds of dollars which left them going without food or other basics. 

"The much-vaunted income support increases will be too little, too late for most people," said Brooke Stanley Pao, co-ordinator for Auckland Action Against Poverty and a spokeswoman for Fairer Futures. 

The organisation calculated a typical family budget for 13 different types of households receiving a benefit and compared it to their income support. 

In 12 out of the 13 model families, the household was unable to cover its costs. 

Even after the benefit increase tomorrow, a couple with three children on a Jobseeker benefit would need an extra $165 to cover their core costs like rent, food, and power. Once the costs of participating in society were included, like sports or an unexpected bill, the gap grew to $307. 

A single person on Jobseeker and sharing a house needed an extra $50 a week to cover their core costs and $90 more to cover all of their costs. 

The only model family which received enough support in the analysis was a sole parent with one child who was eligible for Best Start payments and was sharing their accommodation. And that was only if they were not paying back any debt. 

"These shocking shortfalls are stopping people from living a decent life," said Fairer Futures spokesman Max Harris. "But they are not inevitable and most people in New Zealand recognise we have a responsibility to lift families out of poverty." 

Harris said the Best Start payment showed that welfare could be lifted to adequate levels. 

Fairer Futures wants benefit levels to be lifted to liveable rates, the minimum wage ($21.20 from April 1) to be indexed to the living wage ($22.75), increased disability allowance, an overhaul of relationship rules, removal of sanctions, wiping of debt owed to MSD, and better access and levels of supplementary support for basic needs. 

Benefit increases by successive governments have not kept pace with rising costs. 

The previous National Government raised core benefits by $25 a week in 2015, the first increase since the "Mother of All Budgets" welfare cuts in 1991. Labour made another $25 a week increase in 2020, followed by another $20 a week in July and further increases taking the total to $55 more a week on April 1. 

This week's increases will bring some benefit rates roughly in line with those recommended by the Welfare Expert Advisory Group in 2019. 

However, the advisory group said at the time those rates should be introduced urgently because families were facing shortfalls in the hundreds of dollars. In the three years since the recommendation was made, costs have risen again significantly. 

Fairer Futures is made up of anti-poverty groups, housing organisations, trade unions and others. 

DOES INCOME SUPPORT COVER THE BASICS? 

  • Single parent with 2-year-old child, sharing a house
    Core costs (rent, food, power): $636/week
    Total costs (including activities, one-off bills): $706/week 
    Benefit entitlements: $714 
    $8 left after costs 
  • Couple with 2 children, on Jobseeker benefit
    Core costs: $1306/week
    Total costs: $1448/week 
    Benefit entitlements: $1141 
    Shortfall of $307