Monday, April 19, 2021

Benefit increases we don't hear about

MSD has just released a report into how Labour's Families Package has affected incomes of parents with infants in the first six months post-birth. The first table compares mothers with children born in 2017 with mothers with children born in 2018. It uses data from a 3 month cohort pre July 1. The reason for this is that the Best Start payment didn't kick in till July 1, 2018.

Those recieving the largest increase in absolute terms were beneficiary, and by ethnicity, Maori.

Then the study examines the effect of the Best Start payment post July 1 which is "in addition to income gains from other parts of the Families Package":

The Best Start payment is $60 weekly in the first year but it may be offset by adjustments to other assistance. For instance:
...some families receiving a benefit or with a low income lost Temporary Additional Support – this is a payment of last resort that is withdrawn dollar-for-dollar as income from other sources, including Best Start and other Working for Families tax credits, increases
• some families appear to have also lost Accommodation Supplement income

Nevertheless the net increase in incomes for all mothers, but especially mothers on a benefit, is considerable.

The  study also examined whether the 4 week extension to Paid Parental Leave had the intended effect of allowing mothers a longer bonding period.

"The size of the effect on months with no wages and salaries appears small [0.21 of a month] relative to the four-week extension in paid parental leave made available to parents in 2018. One possible explanation is that recent inflation in house prices and rents worked in opposition to the policy reform."

Pretty much a policy fail there. 

The next report will be of great interest when the effect of increased incomes on the health and well-being of the children is assessed.

Another policy fail is entirely possible.

Also, look out for the Child Poverty Action Group and other anti-poverty advocates kicking up a stink when the first recipients of Best Start (3 year entitlement) lose the income from July 1 this year. That's what they did when the Winter Energy payment stopped last year.

With friends like that Labour doesn't need enemies.

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