Sunday, June 15, 2014

Lindsay Mitchell: Calls to restore benefits to 1989 level baseless

A new book called Child Poverty by Simon Chapple and Jonathon Boston will be published next week, so the pre-release media activity has begun.

On The Nation today Lisa Owen interviewed Children's Commissioner Russell Wills and author Jonathon Boston:

Children’s Commissioner Russell Wills advocates restoring benefits in real terms to where they were a generation ago.
Wills: “So let’s restore it back to where it was when we were kids. I don’t think that’s unachievable.”
Prof Jonathan Boston agrees benefit system needs restructuring: “..people who are wholly dependent on the benefit now are almost a quarter worse off relative to other citizens who are in work than was the case a generation ago.”
As most of the child poverty problem is generated by single parent children, let's check that. A 'generation' back would be 1989 - before the 1990s benefit cuts.

According to the 1990 NZ Yearbook

Any of the above benefits with dependent children (incl. Family Support)
     Solo parent and one child249.14
     Solo parent with two children280.87
          Each subsequent child16.00
          Couple with one child291.08
          Each subsequent child16.00

('Any of the above benefits' refers to unemployment, sickness etc but it is important to note the rates include Family Support).

 Family support. The maximum amount payable is $36 a week for the first child and $16 a week for each subsequent child. Family support is provided to people with dependent children who meet income eligibility requirements. It is paid to income-earners through taxation (see section 25.2, Taxation), but is delivered to beneficiaries and non-earners through the social welfare system.

 Family benefit. This is a universal benefit paid at the rate of $6 per week to the carer of every dependent child in recognition of the contribution of families to the care of children. Its value has been $6 a week since 1979, and the direction of policy in recent years has been towards supplementing family benefit with additional assistance to low- and middle- income families.

Let's use the sole parent with two children example.

In 2014 dollars $280.87 (which includes Family Support but not Family Benefit) would be $509.14

Accommodation benefit. Accommodation benefit is for people whose income and cash assets are limited and who have high accommodation costs. The maximum rates of assistance at April 1989 were $40 per week for a single person, and $65 per week for a married couple. A supplement of up to $20 per week may be paid for elderly people and people with disabilities who are in residential care.

So at the maximum rate of $40 (or $72 in 2014 dollars) that brings the total to $581.14

Finally adding in Family Benefit - $12 (or $21.76 in 2014 dollars) provides a total of  $602.90

How much is a sole parent with two children getting today?

Straight from the Minister's mouth:

“An average sole parent with two children under thirteen, living in South Auckland would receive around $642 on benefit, including accommodation supplement and a minimal extra allowance for costs.”

For simplicity's sake I'll table a breakdown for a single parent with two children aged under 13. Figures are all in 2014 $. The 1989 total is about half way between the highest and lowest 2014 totals (left click on image to enlarge).


Anonymous said...

Even if the poverty pimps' claim was true, a greater relativity between benefit levels and unskiled work operates as an incentive to get off your chuff, stop living of others, and get a job.

How many of these single mothers brought a child into the world knowing that there was no viable father figure in the picture, and knowing in advance that they had no intention of supporting that child through their own efforts?

We hear a lot of talk about "rights" from the poverty pimps and nothing about "responsibilities."

If you can't feed 'em don't breed 'em.

Unknown said...

Everything for everybody would be less expensive if the inordinate profits of a lot of greedy businessmen were reined in.That is not going to happen on the Smiling Assassins watch now is it.Change that this September. Don`t listen to his bull about how well we are doing. Our country owes $69 billion dollars in private and government dept overseas. Every man woman and child in this country owes about 35,000 each. So much for putting a greedy, speculator,currency trading banker in charge you morons

Anonymous said...

Why do we pay benefits to females who's whole aim in life when they leave "Primary School", [ yup, I know of teachers who teach kids in country schools who have witnessed the very same ] is to breed children and receive a benefit. May sound draconian, but I don't believe they should be allowed to keep their kids [ I don't bring my kids up with that in mind so why should I or any other like minded tax payer have to bear the cost. As for accommodation supplements, I have rental properties and have made a decision not to let dole bludgers into my houses ever again. They lie, and they cheat the system [ ie receive benefits and spend it all on piss or gambling, and not forward it onto the property owner.]. The tenacy Tribunal also rules in favour or is too lenient of the bad tenants as well. Don't know how the adjudicators can sleep at night with the decisions they are expected to make.

Anonymous said...

This is how the figures truly work out when Temporary Additional Support is bought into the picture.
Single mother/father 2 children under 13 in area 2 paying $320 per week rent as of 2013.
unabated benefit $295.37
Family tax credits $157
Accommodation Supplement $157
Temporary Additional Support $3.02
Total $611.39

Standard living costs set at 70% of unabated benefit and tax credits $316.78 and this is the amount regulated for families to live on weekly for day to day costs but not accommodation.

$611.39-$320 rent= $291.39

$291- 5% of benefit $24.60(used for repayments of loans, advances) =$266.79

$316.78 - $266.39 = $50.02
Looking at this a person is paying the shortfall of $50.02 from their living costs for their accommodation costs when that is not what the 70% is for.

The reason for this is that the computer program has been set up wrong therefore creating financial shortfalls and this in turn causes poverty.
If this was fixed families with low incomes would have $50 a week extra for food and bills.