Children’s Income Needs Should Be Addressed Urgently

Child Poverty Action Group (CPAG) applauds the Government’s recent announcements to ease student hardship by a $50 increase in allowances on 1 January, 2018, and urges Parliament to address children’s needs with similar urgency.

Christmas is fast approaching, and charities are gearing up to support families in need, with the expectation that the numbers of people requiring financial assistance and food bank help will soar. The Salvation Army foresees 17,000 families in crisis will seek help from the charity for food support, budgeting, counselling, education and accommodation assistance.

CPAG is calling for the Government to extend the In-Work Tax Credit (IWTC), a portion of Working for Families (WFF) worth at least $72.50 per week, to all low-income families.

The Human Rights Review Tribunal found that the IWTC, by only being paid to children in low-income families who meet paid work criteria, discriminates against the worst-off children in New Zealand.

 "Removal of the paid work criteria and the ‘off-benefit’ rule would have a very significant impact for the very worst-off families," says Associate Professor Susan St John, CPAG's economics spokesperson.

"It would enhance equity and simplicity and be a cost-effective step in the overall reform of WFF that is desperately needed.

"The best Christmas present many children could have this year is this extra $72.50 in their families bank accounts each week, especially during a time where for many parents, casual work can be precarious," says St John.

"Moreover it could be achieved immediately.

"It is too long to wait for any changes to come in until next April, when many families will accumulate debt over the holiday period just to survive."

CPAG says that other policies to ensure that this lift from poverty would be long-lasting include well overdue upgrades to other parts of Working for Families, improved social welfare benefits, the proper indexation of benefits and tax credits to wages, as well as to living costs when wages are flat but costs are still rising. Full reform of the welfare system requires, among other changes, individual entitlement to benefits, alignment of single and married rates, and much improved thresholds for earning extra income.