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Severe deprivation - the harsh reality for 140,000 children

Elyse* lives with her little brothers Samuel and Aron, and her mum, Heather. She’s 12 years old now, and she’s in year 8 at school. She is a really good student, and she is proud of her achievements. Mum is really proud too, and she always says to Elyse that if she works hard at school she will go to university and get a really good education, and have a career that pays lots of money. For Elyse that sounds like a dream, the idea of having lots of money. She thinks of all the things she would do and all the things she would buy. Most of all she thinks that she should get Mum a new car so that she can always make sure her little brothers get to school, and that Mum can always make it to her appointments. She would buy her petrol so that the car is always able to go. She knows these things to be really important because the time that Mum couldn’t go to an appointment they had no money for food the next week, and she couldn’t afford any bus money for school. She would buy shoes for her little brothers because it’s embarrassing to have to get free shoes from school. She would buy her mum some nice clothes, because Mum worries a lot about how she looks in her old clothes when she goes to job interviews. Elyse worries a lot too. She worries that she might not do well on her next test if she has to take time off school, and she worries that Mum might get sick again because she has bad asthma, and might need Elyse’s help looking after the little boys. At least they have this house to live in, but Mum says it costs a fortune. It’s pretty cold too, but it’s better than living in a motel or a car. Elyse has lived in both. She thinks about how she wishes she could go to senior camp with her friends.

Elyse’s mum Heather was a sole parent of two working part-time, when she found out she had became pregnant with baby Aron, who is now 15 months old. She had ended a new relationship that had become dangerous. When the child was born, Work and Income informed her that if she did not name the little boy’s father on the birth certificate they would reduce her benefit. Out of fear for her life, and the lives of her children, Heather was unable to do so, and had no idea where to turn to for advice. So she accepted her consequences, which turned out to be consequences that affected her children’s lives. Unable to work and reliant entirely on her welfare entitlements, Heather has had her benefit docked by $28 every week since he was born, and sometimes she has to go to food parcel charities for support. Her car is on its last legs, but she’s got no savings to buy another. The idea of taking out a loan lurks, but she’s only just paid back the last one and she owes money to Work and Income. Though the family is on the waiting list for social housing, she has not been offered a house yet, and is paying $542 a week for the three-bedroom house she rents in Auckland. She’s been trying to find a job, but she lacks both skills and confidence, and nothing will accommodate the needs of her young family. She also has a responsibility to help out her elderly aunt during the week, within school hours. The family has moved house three times in the last year, and now Elyse, who is the eldest, has to bus to school because it’s too far away to drive when she has to be conservative on gas, and because Heather didn’t want to put her child through yet another change in schools. But sometimes even scraping together bus money is hard.

Heather’s weekly income looks like this:

  • Sole Parent Support benefit $334.05
  • Working for Families - $221
  • Accommodation Supplement $276
  • Deduction by Work and Income $28 (Benefit 'sanction' for not naming Aron's father)

Total: $804.05

After housing costs disposable income: $262.05

This winter, Heather’s weekly budget looks like this:

  • $80 - power (conservative for winter)
  • $20 - phone and internet
  • $45 - petrol
  • $20 - insurance
  • $10 - loan to pay back to Work and Income

She has just around $87 left to pay for food for the four of them, to cover additional expenses such as doctors appointments, school needs. The family all desperately needs new clothes and shoes for winter, but they are a luxury Heather cannot afford.

The Child Poverty Reduction Bill that is currently in Parliament awaiting a second reading, will use a range of measures to determine the number of children affected by different levels of poverty. The Bill requires reporting on the numbers of children living in households with income below percentages (60% and 50%) of the current national median disposable income (equivalised), after housing costs (AHC)**. These levels are referred to as “income poverty lines”. The Bill also recommends (but doesn’t require) reporting on numbers below the 40% income poverty line - children living in families whose income falls below this line would be experiencing very severe poverty. According to CPAG’s poverty analysis paper (St John & So, 2018)  Heather’s family income falls far below any of the income poverty lines drawn by the draft Child Poverty Reduction Bill. Her weekly after housing costs income is about 27% of the national median, and the additional income needed to get her to the 50% line is significant.

After the Government’s new Families Package of welfare and tax credit changes that come in on July 1 this year, Heather’s family will be approximately $74 better off, pushing their remaining disposable income for food and other needs around $160 - that would make the family’s living circumstances slightly more bearable, but it’s not enough to cover an adequate diet - nor any of the other basic necessities this family needs. The Otago Food Costs Survey 2018* estimates that a basic diet - one that’s very conservative -  would cost this family $184 per week. A moderate diet - one that likely contains more healthy fresh foods - would cost $239.

To reach the 50% AHC line this family needs approximately $317 in addition to their current income - plus the 1 July top-up. (based on 2018 income median). But to reach the 60% line - the one that better indicates the level of income required for an adequate standard of living - the family would need approximately $438.

After the Families Package comes in, babies in low-income families will be eligible for the new Best Start payment of $60 per week until they turn three, Heather’s baby won’t be, because he was born before July 1, 2018.

An elephant in the room is the missing $28 from this family’s budget. Why are we deducting money that is intended for children’s basic needs, from such a meagre income, just to claw back potential child support losses that are not their fault? Why does the Government count the cost of removing this ‘sanction’ as a fiscal loss?

Does a working couple on a benefit have their benefit reduced because someone somewhere is not contributing towards the Government’s costs of their benefit? So why are we allowing policies that are harmful to children to continue?

We are waiting to hear the recommendations of the Welfare Expert Advisory Group in February next year. But while children like Elyse, Samuel and Aron are experiencing severe hardship, for their sake we cannot wait that long for the abolition of such unjust policy.

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* The story of Elyse and her family is based on a conglomerate of situations and not one in particular. The income figures are based on approximate entitlements. Housing costs are based on the area averages. Food costs are based on the Food Costs Survey report by the University of Otago Department of Human Nutrition and does not account for any of the following: travel costs, special dietary needs, access to cooking and kitchen equipment, spices and condiments.

** 40% line = 40% of the national equivalised median income after housing costs (AHC)

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