Sunday, June 15, 2014

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 even 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).


Matthew Galt said...

Given the range of outcomes, do you know how many families get the low, and how many the higher rate of accommodation supplement?

i.e. are most of the families on less or most of them on more than the inflation adjusted level.

Lindsay Mitchell said...

The 2014 range of accommodation supplement ($75 - 225) occurs because there are 4 different areas defined here:

I don't know what the range of sole parent recipients is though. Would need to OIA it. At a guess (out of the 4 areas) a majority would fall in area 2.

S. Beast said...

SNGs - In the eighties there were different policies for Special Needs Grants. Today many of the grants are recoverable, whereas in the past they were not.

Tertiary benefits - TAS replaced Special Benefit. Special Benefit was discretionary, TAS is not. The criteria is laid out and ridgedly applied. Special Benefit was more generous to those with higher than usual costs for whatever reason. [Early on Special Benefit was calculated by first deducting chunk of money, but this was later stopped allowing more money to be paid). Both SB and TAS are temporary benefits.

Accommodation costs - In the eighties there was no such thing as AS due to the need being met by HNZ. It should be noted that the AS tops out, meaning that in the current environment of ever increasing rents that the brunt of rent increases will need to be covered by boarders/flatmates, or if this is unsuitable due to prior (esp. sexual) abuse of children/caregiver in the home clearly it must come from the remaining benefit or income source.

Anonymous said...

Benefits are the PROBLEM.

They are NOT the "solution".

For **goodness sake** - a reasonably intelligent 12-year-old could tell you that one of the main reasons that many children are living in less-than-ideal conditions is that beneficiaries are encouraged (by the welfare system) to have more children than they can afford to support.

Until the government actually MANS UP and admits this then *nothing will change*.

I can tell you now that nothing will change as a result of the useless Owen Glenn report (with its usual touchy-feely useless left-wing "solutions").