Bold changes and combined efforts could work for families

Child Poverty Action Group (CPAG) applauds the Green Party’s "Mending the Safety Net" policy announcement of Sunday, which is the boldest step yet in family income policy taken by New Zealand’s political parties.

It is the kind of boldness required to put a stop to the poverty experienced by families with young children, families who may earn low wages or are receiving a welfare benefit.

By raising core benefits and the earned income threshold at which benefits begin to abate, there is a better chance for all families on benefits to begin to get ahead and to work their way toward financial independence. This is a far greater incentive to work than the current system of paying meagre benefits that lead to a devastating poverty trap, including insurmountable debt as basic living costs are unable to be met.

Changes to Working for Families (WFF) are by far the boldest yet and align with the core asks of CPAG’s Fix Working for Families campaign.

"The Greens have recognised that forcing stringent work criteria to be met in order to obtain a payment tied to the cost of raising children is a very poor work incentive, and one that leaves a devastating number of the worst-off children behind," says Associate Professor Susan St John, CPAG economic spokesperson.

"Furthermore under the new Inland Revenue system of real time adjustments, the In-Work Tax Credit will be paid inconsistently to many families on casual work hours, effectively punishing them for having their hours of work reduced through no fault of their own."

Scrapping the In-Work Tax Credit and replacing it with a $72 Children’s Tax Credit will be the lift needed to alleviate the worst of child poverty. In conjunction with other policies, such as the higher Family Tax Credits set out by National and Labour’s focus on newborns and the working poor there could be some real improvement to the lives of many children.

"It is heartening to hear that Labour are open to adopting parts of the Green policy, including scrapping the sanctions. CPAG urges Labour to also consider the remodelling of the IWTC into a Children’s Tax Credit available to all low-income families," says St John.

In recognising the changing face of modern relationships and the fluidity of the family model, Greens will implement a policy that allows a sole parent to continue to receive the Sole Parent Support benefit upon entering a new relationship. The policy would require a sole parent to be transparent about their relationship to Work and Income, but allow them to retain financial independence over their children until such time as they are considered to be part of a household of joint property and finance.

"This is a remarkable and commendable policy by the Greens, that would mean sole parents are able to retain control over their own family finances without having to rely on a new partner to do so," says Associate Professor Mike O’Brien, CPAG social security spokesperson.

"Under current policy, if a sole parent enters into a new relationship with a beneficiary, they are required to receive a joint benefit which reduces the per adult amount dramatically, placing further financial strain where there are children. Children are left far worse off because of this unfair policy."

"Beneficiary sole parents do not receive child support, as this is swallowed up by the IRD as a contribution toward their main benefit, so their is no extra for them to survive on."

Currently sole mothers are punished by harsh sanctions that reduce their benefit if they do not name the father on their benefit application. Greens say they will abolish these sanctions and others that make life for beneficiaries much harder.

CPAG is releasing a series of policy priority papers outlining recommendations to improve New Zealand’s healthcare, education, welfare and housing systems. CPAG says that implementing these recommendations will reduce child poverty substantially and improve the lives of all low-income families with children, as well as contribute to a reduction in hospital admissions of children with poverty-related illnesses, paving the way for a New Zealand where all children can flourish. If implemented, combined, the latest policies from Greens and Labour will go a long way to achieving this.