Wednesday, July 09, 2014

Growing gap between income from welfare and work?



 The NZ Herald reports

"There is evidence that there is a growing gap between the incomes of those heavily reliant on the safety net provided by main working-age benefits, and the rest," the report said. 
Kiwiblog has picked up a similar line line.
However, beneficiaries slipped further behind average incomes because benefits are adjusted in line with prices, not incomes, so inequality worsened at the bottom of the income scale.
Here is the relevant section from the report:


While there is no evidence of growing inequality in the population overall or between high income households and the rest in the last two decades or so, there is evidence here that there is a growing gap between the incomes of those heavily reliant on the safety net provided by main working-age benefits, and the rest.


% change from base year
(CPI adjusted – ie ‘real’ changes)

1983 to 2014
1994 to 2014
2007 to 2014
Median household income
+25
+45
+5
Net average ordinary time earnings
+32
+32
+12
NZS
+9
+21
+12
DPB plus family assistance (with one child)
-17
+6
-2
Invalids Benefit – single aged 25+
-8
-1
-1
Note:    The change in median household income is to calendar 2012 only (HES 2013). Assuming modest household income growth from 2012 to 2014, a further 3 to 4 percentage points needs to be added to the changes for household income for proper comparisons.


The DPB and Invalid Benefit calculations do not include accommodation supplement (which around 80% of those on DPB receive.)



Source: Working Age[Non-NZS] Welfare, Treasury, Figure 8

This shows that accommodation supplement and income related rents increased at a rate much higher than CPI or average wages.

Without those components accounted for we can't know if the statement is accurate.

1 comment:

Anonymous said...

there is evidence here that there is a growing gap between the incomes of those heavily reliant on the safety net provided by main working-age benefits

good.

This shows that accommodation supplement and income related rents increased at a rate much higher than CPI or average wages.

which once again gives the lie to the "Richardson's cuts have never been undone".