Wednesday, July 16, 2014

Adding children to an existing benefit - numbers rise

Not such good news for National.

In October 2012 a policy to discourage beneficiaries from adding children to an existing benefit was introduced. When a new child turns one, the parent may have work expectations based on the next oldest child's age. The policy was specifically aimed at discouraging the addition of children to an existing benefit to avoid employment.

Data released to me  under the Official Information Act shows that the policy has made no difference.

In fact the number of children under 1 year-old added to an existing benefit has actually increased.

In the six months ending March 31, 2006, 5854 children aged under one were added to a benefit. In the same period prior to March 2014 the number increased to 6634 - a 13% rise.

Half of the caregivers adding children under the age of one were Maori: 26 percent NZ European and 12 percent Pacific Island.

Seventy two percent of the caregivers were 29 years or younger.

Over a quarter of those receiving the Youth Payment/Young Parent Payment added a baby. The majority of newborns were added to Sole Parent Support.

While the policy was well-intentioned it will not work in communities where there are no jobs or where a parent has significant barriers to work eg a criminal history. In these cases children continue to present an opportunity to increase income by an additional $3,328 annually.

This is a really thorny issue.

On one side there's those crying, what will happen to the children if we stop paying?

On the other is the grim reality that meal-ticket children are at-risk children.

When the policy was implemented it was accompanied by free access to long-acting reversible contraception, especially to women on a benefit and their "adult female dependent children".  MSD estimated just under 15,000  in the first group (according to Cabinet papers) and  1,000 in the second "may choose to utilise a long-acting reversible contraceptive."

In 2013 only 215  Special Needs Grants were paid for LARC.

So while the number of teen births is dropping significantly, there is a group of beneficiaries who either don't know about the new policy or are ignoring it.

Ironically these are the very parents hands are wrung over because their children are 'living in poverty'.

I don't have to come up with solutions because I'm not a politician. But capping the benefit (before the reforms) has been tried in the US and it didn't work.

Stopping welfare isn't acceptable with the electorate.

So my best alternative is time-limits. People need to know they have X amount of entitlement and when it's gone, it's gone. They have to make the right choices for their circumstances, and if they don't, they have to live with the consequences.


thor42 said...

"Stopping welfare isn't acceptable with the electorate."

Hmm.... I'm not so sure about that..... :)

The voters of today are quite different from even 10 years ago. I have detected quite a hardening in attitudes towards welfare.
Heck, the "welfare reforms" package was *very* strongly supported by the public.

Paula bennet has the "X factor" - voters genuinely like her and her down-to-earth style.

If she announced that as of date "x" there would be no new applications accepted for Sole Parent Support (and at the same date there would be no benefits paid for more than 2 children),
I'm sure there would be wide support for that move.

Beneficiaries are people and they have *GOT* to take responsibility for their actions.
"You breed it, you feed it".
Oh, beneficiaries would grumble big-time about that move but it WOULD work. They *would* change their habits.

Anonymous said...

"Stopping welfare isn't acceptable with the electorate."

Stopping all welfare overnight is not just acceptable but its the only sensible welfare policy. Anyone who argues against this just isn't serious.

I'm absolutely sure stopping all welfare immediately would be popular enough to get 5% of the list vote. Indeed, it was essential ACT policy when they were polling at 10%. Nowadays, of course, ACT's policy is to spend every sent of welfare that National wants to spend --- more than has ever been spent by any government ever in NZ's history --- and surprisingly ACT is polling at 1%.

Stopping all welfare immediately is also, I surmise, the position of a majority of nett taxpayers. Certainly given the choice of continuing welfare as is or stopping it all, stopping would win.

The biggest tragedy of NZ's "democracy" is that the rights of the few nett-taxpaying Kiwis are utterly and completely ignored by every political party.

Anonymous said...

What I want to know is how all these children get conceived when these mothers are not in a relationship?

Because if they were in a relationship, I thought they wouldn't qualify for the benefit. Am I wrong about that??

Lindsay Mitchell said...

Anon, Defining a relationship:


What is a relationship?

How we decide what a relationship is has not changed.

For a full description of what a relationship is see our brochure “Relationships and income assistance”.

The two main factors MSD look at to decide if you’re in a relationship are:

- financial interdependence
- emotional commitment."

Children conceived in loveless, non-committed relationships qualify the parent for more money than those born in opposite circumstances.

Susan St John said...

The WFF payment for the second and subsequent chidlren under 13 is only $3328-or $64 a week hardly an incentive to have an extra child?

Anonymous said...

People need to know they have X amount of entitlement and when it's gone, it's gone.

Yep. And it's pretty damn clear the optimal solution of this equation is X = 0

Lindsay Mitchell said...


You are correct. I used $92 a week thinking about a newborn. But as you point out, not a 'subsequent' newborn.

To be honest, I don't think the sum is of paramount importance.

The point is, having another child has no seeming negative consequences. There is no reason to avoid or delay a birth in those circumstances.

Anonymous said...

no party will go near stopping welfare, not if they want to get into power. It's just a no-goer, and even National are only tweaking welfare around the edges.

None of them have courage at all.


Anonymous said...

no party will go near stopping welfare, not if they want to get into power

but when a party is in power, and don't care about getting re-elected, they can do whatever they like.

more to the point: the could do what's right

Ruth did in 1991.

History will show just how badly English & Key did in not following her example in given greatest opportunity to end welfare in NZ - the earthquake and the GFC.

Instead, they borrowed 60 billion and flushed all 60 billion on welfare.