New CPAG paper - Will children get the help they need?  

The Government’s Families Package due on 1 July will give some relief for children in poverty, but Child Poverty Action Group (CPAG) says there is not much light at the end of the tunnel for children who are worst-off.

‘Pockets of hardship’ were identified by the Ministry of Social Development in 2007 when they found there were families with children living far below the very low 40% (after housing costs) poverty measure.

Since then the problem has grown.

“In 2018, there are more than 140,000 children living in households below this line with incomes that are impossibly low,” says Associate Professor Susan St John, CPAG economics spokesperson.

“The Families Package delivers an extra $8 a week in benefit increase, through a Winter Fuel Payment. It gives an extra $20 of Working for Families for the first child and an extra $27 a week for additional children under 13, and less for older children. A single child family on the benefit stands to be only $28 a week better off.

“Much of this is a catch-up for no increases to their WFF tax credits for the past six years, and will likely contribute to their debt repayments,” says St John.

A new background paper from CPAG, Will children get the help they need: An analysis of effectiveness of policies for children in the worst poverty in 2018, compares these increases to what the worst-off families will actually need.

A sole parent with one child in Auckland, receiving the sole parent support benefit and the maximum Accommodation Supplement needs another $185 a week to reach the 50% AHC line.  The 60% AHC line may better reflect an adequate standard of living, but to reach that this family needs another $266 a week.

Larger families need more, and couples with children on benefits need even more. A couple on a standard benefit with 2 children needs $334 to reach the 50% line and $459 to reach the 60% line.

“Couples are the worst-off of all families with incomes falling below the 40% line,” says St John.

“To contain fiscal costs the Government needs to do some concentrated spending on just the worst-off families.”

This is hard to achieve using the only the tools in the Families Package.

While it has been indicated that the 1 July changes are just the start, families are desperate now, and cannot wait for the working group reports to determine the direction of tax and welfare.

“CPAG suggests that there are a range of actions that can and should be taken immediately,” says St John.

The full report by Susan St John and Yun So is available online here.