Let’s Not Divide NZers With an ‘Unfair’ Two-Tier Benefit System

Child Poverty Action Group is calling on the Coalition Government not to let COVID-19 divide our country into those who deserve support and those who don’t - whilst also ignoring the needs of our most vulnerable children.

The recently announced COVID-19 Income Relief Payment is creating two tiers of welfare, marginalising those already struggling under the current benefit rates. And the design of this new programme essentially acknowledges the failures of the existing system by creating a separate benefit for those newly unemployed due to COVID-19.

But just as New Zealanders were united in stopping the spread of COVID-19, CPAG is calling on the Coalition Government to ensure the recovery is also a team effort, not marked by unfair distinctions that only deem some to be deserving of help.

The COVID-19 Income Relief Payment also shows the Coalition Government’s acknowledgement that a partner’s income should not penalise a person receiving a benefit, by allowing partners to earn up to $2000 a week before tax, without it affecting their claim.

CPAG believes healthy relationships should be promoted, and this policy announcement acknowledges how punitive the current benefit rules are.

Susan St John, CPAG’s economic spokesperson, says this new policy makes it light years better than the Jobseeker benefit for which many do not currently qualify because they have an earning partner.

"Modern relationships are complex and the current rules regarding benefits are based on archaic notions of the relationship and assumes what is expected from partners. But these assumptions are based on old ideas that do not apply today, if they ever did, and which have forced many into unacceptable poverty."

St John notes that the COVID-19 Income Relief Payment is costed at $570 million, but the actual cost is $1.2 billion as the ‘saved benefits’ of $670m have been subtracted.

"This is a large programme, providing a rate twice the Jobseeker’s benefit on an individual basis and will act to further entrench the growing poverty problem among welfare recipients who do not qualify.

"There will be many disputes over who qualifies. The COVID-19 Income Relief Payment is only for those who have lost their job due to the impact of COVID-19 since March 1, so what about those who lost work before that, or who become sick?" asks St John.

CPAG is also deeply concerned that there has been no attempt to fix the glaring inconsistencies in policies for the support of all children.

"The policy around the In-Work Tax Credit - a payment for children - will be very difficult to administer and unfair especially when people come to the end of their wage subsidies and access this new ‘benefit’. So far the government has not said how it will treat such families but logically it would seem that Work and Income would have to deny them this important payment for their children."

CPAG calls on the Coalition Government to immediately remove the off-benefit rule for this important part of Working for Families.

"An extra $72.50 per beneficiary family per week would go some of the way towards alleviating rising child poverty and hardship. At a cost of $0.5 billion this would be money very well spent," says St John.

"Once again the problems of the wider welfare system have been ignored. Yet it is clear that the numbers on benefits will continue to climb and our child poverty problem will deepen."

As Grant Robertson said during yesterday’s announcement: "As we move from the respond and recover phases of our COVID-19 response, and towards rebuilding the economy, we have an opportunity to reset some of the foundations of the safety net for working New Zealanders."

CPAG implores the Coalition Government to focus on creating a safety net that is inclusive of all in Aotearoa, not just a select group.