Lindsay Mitchell: 3,000 more children on benefits in just one year

The March benefit data was released yesterday. I track children on benefits. The trend is bad.

In the last year the number of children reliant on a benefit (their caregiver's) has risen by over 3,000.

In the last 6 years the increase is just a smidgen under 40,000.

This is a 24 percent increase against a population aged 0-17 years-old which grew by just 1.7 percent. 

The upward trend was accelerated by covid but began prior and has not reversed since.

I believe the increase is primarily the result of all the extra cash assistance that has gone into families with children who depend on a benefit. 

For instance, since early 2018 a sole parent with two or more children has experienced a 58 percent increase in after-housing-costs-income. 

Trends in average total income by family type (after housing costs) over time

Source: Total incomes of MSD main benefit clients as at April 2022

In addition to monetary policies a number of other changes sent new messages to parents or potential parents. Abolishing the requirement to name the father of a child(ren) included in a sole parent benefit; the removal of work obligations intended to discourage the addition of a child to an existing benefit; the non-enforcement of sanctions for beneficiaries with child-caring responsibilities; and the pass-on of child support to beneficiary parents (instead of state retention to offset the sole parent support bill) all convey a lessened emphasis on individual responsibility. 

Staying on benefits for longer

Despite a very favourable employment environment, beneficiaries are staying dependent for longer as evidenced by the ageing of their children. Usually single parents move into work as their children get older but there are significant increases in the number of older children dependent:

Source: OIA January 2023

This development is reinforced by MSD's own 'expected future years on a benefit' calculations which show:

More children being born onto a benefit

At December 2018 10,863 children aged 0 years (meaning they must have been born in the same year) were dependent on a benefit. This increased to 11,361 children at December 2022. At some point during their first year of life they were included in their caregiver’s benefit which may have been new or existing. (Cabinet papers released by a National government showed in 2010 4,800 babies were added to an existing single parent benefit but there has been no update on this statistic.)

These numbers represent 18.7 percent of all children born in 2018, rising to 19.3 percent of all children born in 2022. Almost one in five.

Children born onto a benefit stay longest. According to MSD research:

“…the age of the child at first entry into the benefit system, is an important factor associated with having long-term contact with the benefit system.”  

The longer children stay on benefits the worse their outcomes are.

For instance, the incidence of maltreatment finding was 11.3 percent in a 2010 birth cohort who had spent more than 80 percent of the previous five years on welfare. For those children who had spent no time dependent on a benefit the incidence dropped to just 0.3 percent. 

In 2016 one of Treasury’s four indicators for high risk of experiencing poor outcomes later in life was “Being mostly supported by benefits since birth.” Poor outcomes included being, “more likely to leave school with no qualifications, spend time on a benefit, and to receive a prison or community sentence.” 

Are these children to be regarded as merely collateral damage in Jacinda Ardern's ill-conceived plan for reducing child poverty which I predicted would only draw more children into welfare dependency which is intergenerational with poor outcomes?

Childrens' potential is being stolen.

Don't expect to hear about this unfortunate trend from Carmel Sepuloni or the media though.

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Children on benefits in March years. (Due to seasonal variation trends can only be established by comparing data year-on-year - not quarter to quarter):

2018 168,276

2019 172,587

2020 182,787

2021 205,872

2022 205,182

2023 208,242

Lindsay Mitchell is a welfare commentator who blogs HERE.