Friday, November 06, 2020

Are beneficiary incomes too low?

 The new government is going to come under a great deal of pressure to lift beneficiary incomes from many quarters: CPAG, AAAP, Salvation Army, The Christian Council of Social Services, to name a few advocacy groups. Their parliamentary partners, the Greens, will also be exerting pressure.

Are beneficiary incomes too low?

One way of looking at it is, how do they compare internationally?

Below I have charted the assistance available to a single parent in Australia versus a single parent in New Zealand. I've only included the major income components: basic benefit rate, family tax credits for children and accommodation assistance. Certainly in NZ there is extra assistance available via special grants for additional accommodation needs, food etc. As well in Australia anyone currently on a benefit is receiving a Corona Virus $125 weekly supplement until December 31, 2020. That is not included. I modelled a parent with young children as that is when they are most likely to be on income support.

Although NZ's basic benefit rate is lower, family tax credits are slightly higher and maximum accommodation supplements are a lot higher resulting in a substantial difference between total incomes. Yes, its slightly cheaper to rent in Brisbane than Auckland but the government is only going to pick up a small portion of the cost.


1 comment:

workingman said...

So $964 a week is $50,128 per year. With no tax to pay I think.

On the IRD website the tax calculator shows you need an annual wage of $61,641 to match that payment. That is an hourly rate of $31.60.

If you are on $61k with 2 kids it looks like you receive an additional $9500 in WFFTC.

Not sure how many beneficaries have student loans, but it looks like they do not have to repay, where as my daughter has to pay her student loan.

I know my daugher and son-in-law do not claim the WFFTC as their work hours vary so much that they do not want to risk over claiming.