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Safety net whipped away when families need it most

Low income workers made redundant in recent manufacturing sector lay-offs also lose eligibility to claim vital government support for their families until they are employed again, says Child Poverty Action Group.

Low income workers made redundant in recent manufacturing sector lay-offs also lose eligibility to claim vital government support for their families until they are employed again, says Child Poverty Action Group.

The In Work Tax Credit (IWTC) is a child-related family assistance payment, introduced as part of Working for Families to reduce child poverty and incentivise parents.  It is worth at least $60 per week, but children miss out if their caregivers receive a benefit or are studying. 

“Absurdly, they are also not entitled to this part of assistance for their children when their hours of work are cut and they don’t meet the 30 hours for a couple or 20 hours for sole parent. This is even if they do not go on a benefit!” says CPAG spokesperson, Associate Professor Susan St John.  The IRD can be very aggressive in recovering any overpayments from the caregiver.

 “Low income families are hit particularly hard by job losses, as they experience the double jeopardy of losing vital government support for their children at the time they need it most.   Mum or dad has lost their job through no fault of their own in a struggling economy. The children’s needs have certainly not changed.   Yet the family loses a further $60 at least each week from the family budget, money which would cushion the children from the worst impacts of a bad situation.”

 St John says the government’s argument that the IWTC is needed to create a work incentive is nonsensical in the current economic climate, with high unemployment and child poverty.

“All the evidence shows that people will move into employment when their family situation permits and when suitable jobs are available.  We are whipping the safety net away at the very time families need it most. “

CPAG continues to challenge successive governments in the courts over the discriminatory In Work Tax Credit which is denied to 230,000 children living in some of the poorest families in New Zealand.   We argue that this policy discriminates against children on the basis of their parents’ work status, which is prohibited under the Human Rights Act.   Our case has reached the Court of Appeal and we are committed to fighting for the rights of these 230,000 New Zealand children.