Baffling benefit system makes families worse off

Child Poverty Action Group (CPAG) says Auckland Action Against Poverty’s (AAAP) recent Benefit Impact shows the welfare system is not meeting the needs of those who need it most. The system is marred by convolution, combined with a baffling system of tax credits called Working for Families which supports only some and leaves beneficiary families worse off. For some unfortunate families, the system is even punitive.

AAAP ran their annual benefit impact over three days last week in Mangere. Despite having more than 100 volunteers to help people get their correct payments, many who queued to be assisted had to be turned away. Around 650 low-income, struggling families were helped, but AAAP were overwhelmed by the level of need.

It is time to reject the common assumption that anyone on a benefit must be lazy or wastes money. On Waatea TV Darryl Evans, CEO of Mangere Budgeting Trust said, "There is no empathy for the poor in New Zealand," and "ninety-five per cent of the families [they] help are good honest people" who want to be good parents, pay the rent and "put good healthy kai on the table."

Since the 1991 benefit cuts, benefits have fallen conspicuously behind wages. As core benefits have been squeezed, extra supplementary payments from Work and Income have become more necessary. The criteria for these extra payments are complex, and the systems in place fail to explain these clearly, making it very difficult for people to understand their entitlements. Consequently, every year for the past four years AAAP have helped a growing number of families, and the number of food parcels distributed continues to escalate.

Child Poverty Action Group (CPAG) believes families shouldn’t have to rely on charity for basics such as food for their children.

AAAP’s Sue Bradford described how the current system saves money by imposing its complexities on welfare recipients by making the system too hard to understand. Furthermore Work and Income pays people less when they are in relationships, and may prosecute them when they are deemed to have been 'overpaid'.

CPAG Economics spokesperson Susan St John says, "The use of relationship definitions to punish people must end,and people be enabled to gain much more from earning extra money. CPAG is campaigning for the Government to Fix Working for Families (FWFF). Merging the In-Work Tax Credit with the Family Tax Credit would give the worst-off families an additional $72.50 of income each week."

This change would go a long way towards simplifying the system, Overnight it would make a powerful and positive difference to the lives of thousands of the children and their families.

For more information on Fix Working for Families visit our campaign page.