Tuesday, May 28, 2013

CPAG return to court - again

The Child Poverty Action Group (CPAG) is about to return to court for the third time arguing that the In Work Tax Credit should go to beneficiary families. The group has an opinion piece in today's DomPost:
OPINION: New Zealand continues to grapple with a poor track record for child poverty and particularly the rising inequality affecting our poorest children.

My response:

Dear Editor

An opinion piece from the Child Poverty Action Group (Dominion Post, May 28) is prefaced with a statement that the group is back in court this week trying to get Working for Families extended to those getting benefits. Children in beneficiary families do receive Family Tax Credits, part of the WFF package. What they don't get is the In Work Tax Credit (IWTC) specifically for parents who work.

The IWTC was created by the last Labour government which believed the best way out of poverty, including for children, was paid work. It reflected the extra costs of going to work and the often negligible gap between income from low-paid work and income from a benefit.

Research from the OECD (whose experts assisted the government at the last defence of this policy) has shown that reducing child poverty simply by lifting benefit payments increases the number of workless homes. In short, paying the IWTC to children in benefit homes will lift their income in the immediate future but won't eliminate the ongoing source of their poverty - parental unemployment - in the long run. That's why the Human Rights Tribunal ruled,"...the discrimination caused by the exclusion of beneficiaries from the In Work Tax Credit is demonstrably justified."

CPAG refuse to accept this and continue to throw good money after bad fighting the decision. It could probably be better spent on practical measures to reduce hardship amongst poor children.

1 comment:

S. Beast said...

I can't agree with you on this because the IWTC can never be achieved by part of our population who happen to be parents but are medically unable to work more than 15 hours a week - 20 hours or above are required to meet the threshold for IWTC.

If on the other hand the legislation were altered to have separate criteria for those medically unable to meet the 20 hour minimum this would be much fairer and not discriminatory against severely disabled parents and their children some of whom can NEVER meet the criteria as it is written.

So...you may be thinking that the welfare system allows those on SB and IB a certain threshold before their benefit is abated. This is correct but it also only applies to the main benefit rate and some supplementary assistance.

Often severely disabled people have higher costs above the threshold of their Disability Allowance which will be picked up by TAS (or possibly Special Benefit if still under that system).

These two additional supports which are only approved to those who are considered in "hardship" are abated by deducting the gross $ amount earned and kick in as soon as any money is earned. So Work and Income deduct the gross amount but the beneficiary only receives the net amount (effectively a "loss").

For those in receipt of TAS or Special + on IB and unable to achieve the IWTC this is a nasty piece of discriminatory legislation that creates a permanent financial suppression between other families who can access the credit and their own family.