According to the Dominion Post today a solo mother with two children on the domestic purposes benefit received $23,000 net a year - less than 55 per cent of the average income...
Currently working a 40 hour week on the minimum wage nets $24,960; a 30 hour week $18,720. The effective rate of taxation on earned income is slightly higher than on the benefit sum.
So it is easy to see why moving from a benefit to a low wage job is not "worth it".
Now if the In Work payment was added the net benefit income would rise to $25-26,000 - more than working a 40 hour week on the minimum wage.
People used to work because they had a work ethic. They wanted to pull their weight and be seen to be independent. Poor but proud. Today many will only work if it is financially advantageous. The government has to work with that reality. The CPAG wants to ignore it.
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1 comment:
Lindsay - you very accurately point out two problems:
first of all, the minimum wage is far to high: $25,000 is just ridiculous for semi-skilled work in NZ - let alone unskilled solo mothers!
and second of course, the DBP should just be abolished overnight,
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