Hardship
The new bill to alleviate hardship for New Zealand Children shows that child poverty is now on the official NZ map and on the government agenda. It is painful to know that this is a political issue, rather than a humanitarian one.
Incase we think the proposal is simply for an extra $25 per week, it is not. The purpose of the Support for Children in Hardship Bill is ‘to raise work requirements for parents on a benefit, raise the level of subvention paid to low income families for childcare, and increase financial support for beneficiary parents and working parents on low incomes’. Work is still the pathway out of poverty. Work is good if there is support for training, fair wages, equity, and child-friendly workplaces
We must do a submission from Public Issues and the Methodist Church, and it needs your contributions.
Lets look at the main features of the proposals. The $25 per week is per family on a benefit. To make a difference it should be $25 per child. The more children in a family, the less the advantage of $25 will be because it will be distributed across all the children. We know that 79% of children in hardship are in families of 2 or children and half have 3 or more children.
The requirement is that parents will be available for work when the youngest child is 3 instead of 5. Furthermore, availability for work increases from 15 to 20 hours per week.
The spouse or partner of a beneficiary may be required to be available for full time work and the obligations of availability. This seems fair enough.
Student allowances for students with children will be adjusted to correspond with the benefit changes of $25 per week.
The In-work Tax credit will also slightly improve incomes for families, by $12.50 - $72.5 per week per family.
The childcare subsidy will rise by $1, to $5 per hour.
The changes are not to be implemented until April 2016. Why not earlier?
There are two important papers which help us to understand the Bill.
One, is a new paper on material hardship for New Zealand Children, on which the policy for the Bill is based. In essence it works with the idea that hardship and deprivation are better indicators of poverty than income levels. This is because some people can have low incomes but has other means of support, via family support or assets. Deprivation gives a good idea of social inclusion and exclusion.
This paper is very interesting, though challenging to understand. It works with two main measures of deprivation: ‘medium’ hardship and ‘severe’ hardship. The kinds of deprivation it uses for the index is whether a child can have friend to a birthday, wearing worn out shoes and clothes, low levels of protein (meat and fish), limited involvement in music, dance, kappa haka and sport, and a warm house. These are graded across enforced lacks , economizing on children’s items, sickness impacts, a ‘lot’ of financial stress and house conditions.
In this paper comparisons are made with European studies of deprivation. There are different levels, or severity measures of deprivation, so this is a simple interpretation. In a comparison across European countries for the population as a whole (not just for children), New Zealand is 10th out of 27 countries, and just below the median profile for severe deprivation. Alarmingly, New Zealand is highest in deprivation rates for children across 20 European countries. This is measured through a risk index of hardship compared to the whole population.
One of the most interesting things in the paper is the comparison of deprivation with people aged over 65. New Zealand has one of the lowest deprivation rates of older people, with 3% deprivation and only 1% in severe deprivation.
This gives us the real benchmark for social inclusion of New Zealand children. I think it is important to make it very clear that the level of support though National Super should be our goal for children.
The analysis of deprivation does not provide a lot of detail on Māori whanau and Pacific children. There are two tables that give this information. Hardship rates from Maori children range from a medium 39% to severe at 11%. For Pacific children 51% medium to 19% very severe. For European children the range is 18% to 3% at a very severe level of deprivation.
A few other comparisons tell a story we know well. ‘Standard’ hardship for Maori children is 25% , and severe hardship at 11%. For people over 65 years, hardship is 2%.
The other paper that is very important for the Public Issues submission does a careful analysis of what might happen to the $25 per week. Michael Fletcher gives a penetrating analysis of what will happen to the $25 when housing costs and adjustments for accommodation supplement is taken into account. He calculates that $4 will be lost on reduced eligibility for the Accommodation Supplement, leaving $7 per week in a sole parent family and $5.25 in a couple with two children family.
The Bill makes provision for financial assistance to anyone who is financially disadvantaged through unintended consequences of the Bill – this might need investigation.
All in all, the government expects that 110,000 families on benefits will receive additional support, and 200,000 families in work.