One simple change for our poorest children

Tuesday 8 August 2017

Immediate release

Maddy*, a beneficiary with a 10-month old child, says she hasn’t heated her cold, damp house all winter – except for the one tiny room where her baby sleeps. Surviving on just $100 a week after paying rent and power, the single mother is trying to find a healthier home with lower rent but says she is stuck trapped in a vicious cycle.

“Trying to find somewhere to live is a horrible catch 22. I can’t go and look for a place because my car is broken, I can’t get help with the car from WINZ because I’m on my Learner license, I can’t get help getting my Restricted because my car doesn’t have a warrant, I can’t get a loan to fix my car because I can’t get a loan from the Salvation Army until my rent is lower. I’m trying! I’m trying to move out. I did go and have a look at a few local houses but there’s 50 to 100 other people looking – and of course real estate agents aren’t going  to pick anyone who is on the benefit because real estate agents don’t like renting to people on the benefit.”

Because Maddy is on the benefit, she does not get access to the $72.50 In-Work Tax Credit for low income families. In order to receive the In-Work Tax Credit, solo parents must work a minimum of 20 hours a week, and couples must work a minimum of 30 hours between them.  She says the extra money would help her live in a healthy, warm house.

“I can’t afford to heat my house. There’s a heater in my baby’s room, but that’s the only room that gets heated. I haven’t ever heated my room. Luckily I haven’t gotten sick yet, but my house is freezing. It’s uninsulated. It’s warmer outside than inside, and it’s so big there’s really not much point in heating it –  it will be too expensive.  When I go to bed I wear a lot of layers. I basically live in my dressing gown.”

The members of the Equality Network, a network of 37 organisations uniting to create a more equal Aotearoa New Zealand, are calling on political parties to commit to make radical changes to the way it supports families – especially those on benefits that have children.

Our poorest children are missing out on the extra $72.50, which could be the difference between “a child that prospers and a child that doesn’t”, says Paul Barber from the Equality Network member NZ Council of Christian Social Services.

Barber says we need urgent action to help the 290,000 children and young people living in poverty, and more support for beneficiaries with children is top of the list. Nearly 200,000 of children in poverty are in families where no-one is in paid work, meaning families lose out on the extra  support of the $72.50 per week In-Work Tax Credit.

“This is a simple and really powerful way to make a difference and reduce poverty and inequality and it could be done tomorrow – if the politicians decide to,” says Barber.  “We want people around the country to ask election candidates to make the commitment to lift incomes for the poorest children and families in this country. We know that people are really concerned about what is happening to children living in hardship and this is the easiest, fairest and affordable first step.”

Nathan* is a single father based in Palmerston North who studies full time and works around 16 hours every weekend. Following a redundancy and a divorce, Nathan decided to go to university to further his education after consistently being unsuccessful at securing employment that would meet his family’s needs.

“If I were to work another shift somewhere to get the 20 hours necessary for the In-Work Tax Credit, I’d get penalised and my student allowance would get reduced. I’m no better off doing the extra work.” He currently lives off around $100 a week for food for him and his two children, which often isn’t enough. “If the kids school shoes fall apart – which literally happened last week – I have to sacrifice food money to put shoes on my daughter’s feet. $72.50 means I can buy shoes or pay my energy bill.”

“I’d like to see students and solo parents be given more of an opportunity to be parents, and students more of an opportunity to be students. Needing to work because the benefit or student allowance is low takes away from studying and it takes time away from my family. Not having enough puts huge stresses on parents.”

Nathan says even small, everyday things become very stressful when you don’t have enough. “Can you imagine being stressed about your kid getting invited to a birthday party? There is an underlying expectation that you send your kid with a gift. A gift that has to be bought with your own grocery money. Or should I just embarrass my kid and send them with nothing and tell them to say, ‘My dad’s too broke to buy you a gift?’ Or, maybe I should just lie and say I’m too busy to come – because I have no petrol to drive across town.”

Child Poverty Action Group spokesperson, and Associate Professor Economics at University of Auckland, Susan St. John, says the way the In-Work Tax Credit is given out is “grossly unfair and discriminatory”.

“Children of beneficiary parents do not qualify for this support, nor do those who do not meet the hours of work required. Where is the recognition for the valuable work that parents do for society, in raising their children well, or the acknowledgment that sole parents may be doing it under the hardest of circumstances? Fixing this by paying all low income families the $72.50 a week is important but so is restoring the rest of working for families that has been deliberately run down since 2010.”

Benefits for those with children were raised by $25 last year but St. John says that rising housing prices and food prices means this is a “totally inadequate response.”

Maddy says the extra $72.50 would be “amazing”, meaning that her son could have access to nutritious food, that she would always have enough money for nappies, and that she could afford to go to the doctor.

“I’ve got a lot of health issues and I need to go to the doctor but it’s $46 and that’s just too expensive sometimes. I also need to go to get the jab so that I don’t get pregnant, but I just can’t afford to go. I’ve got a problem with my hip and it’s been really painful for the last month, but I just had to put up with the pain until I could afford to go to the doctor last week.”

According to research from CPAG, children growing up in poverty are more likely to live in poor quality housing that is cold and damp in winter. These children are also less likely to be able to visit doctors and pay for prescriptions, and thus more likely to suffer long-term health issues. Their education is also affected through stress, anxiety and poor nutrition.

* name changed to protect identity.


Some helpful facts

  • Child poverty affects ALL ethnic groups: 38% of children living in poverty are Pākēha 34% are Māori 13% are Pasifika 14% are from other ethnic groups
  • 37% of children living in poverty are in households which receive their income from at least one adult in full time paid work 63% of children living in poverty are in households which receive their income from a benefit.
  • Parents living in poverty do not waste their money on things like gambling, drugs, and alcohol any more than anyone else, and often they do so far less: New Zealand expenditure data shows that low income and beneficiary households spend less proportionately on alcohol, drugs, tobacco and gambling and a greater percentage of their income on food than high income households. There is no evidence that living in poverty equates to reckless spending. The media portrays extreme cases.
  • Poverty is not always because there are too many children: 55% of children living in poverty are in households with one or two children.
  • Children in poverty are from both sole parent household and two parent households: 47% of children living in poverty are in two parent households 45% are in sole parent households 8% are in multi adult family households.