The NZ Herald asked for a brief op-ed (200 words) responding to the suggestion that going off welfare isn't providing better incomes. I abridged and added to yesterday's post:
A Blenheim single mother of three finds she is only $34 better off working. She says, "When you weigh it up, is it worth going to work? The Government is trying to get everyone off the benefit but there is no incentive to work."
The incentive lies in being self-supporting, in joining the workforce that creates the productivity and taxes to pay for, among other things, benefits for those who genuinely can't support themselves.
"There is that stigma attached to being on the benefit and many believe that you are just a bludger," she adds. Only if you can work and refuse to.
In any case, she goes on to answer her own question: "I love my job. It makes me feel rewarded."
Time for a reality check. Because of the accommodation supplement and family tax credits, the gap between benefit income and income from work is very small (and will get smaller from April this year when parents with dependent children get a $25 benefit rise).
Moving into work may provide little financial gain initially. But the individual's sense of well-being and future prospects are improved.
In this instance the ex-beneficiary has already identified that. Good for her.
Here is the opposing view from a beneficiary advocate :
There is a large percentage of my clients who approach our service and ask us to look at the viability of returning to work -- single parents who are committed to getting off benefit and excited about the prospect of returning to work.
When we break down the in-work tax credit, the childcare subsidy, accommodation supplement and temporary additional support, it is not uncommon that the working single parent ends up with under $50 a week more in their hand.
We then look at transport, parking, appropriate clothing etc. for work. Work and Income will assist with a percentage of this cost, however, not the total cost, which then gets taken off the $50.
Then, school holiday programmes need to be paid for along with childcare, which is subsidised, and the $50 in hand is reduced further.
Given this, most of our clients still opt to return to paid work because we can see the benefits of work experience which may lead to better work opportunities. However, this does not provide a living wage and the extra expense of working does not often make this a sound financial choice.
What can be done? The in-work tax credit for low-income earners needs to be increased, childcare needs to be free for low-income earners, including after-school care and holiday programmes, the living wage needs to be adopted by employers and the Government.
The benefit is not a lifestyle choice, but when the income paid to working families is equivalent, we need to have a close look at incomes, rather than increasing subsidies.
I notice the second op-ed well exceeds 200 words.There is something symbolic about that but I can't quite put my finger on what it is.
21 minutes ago