Here is what must happen in child poverty before the end of this year

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The Salvation Army wonders whatever happened to the Accommodation Supplement review. What is up with the policy process in Wellington?

We were also promised a much-needed review of the Purpose and Principles of the Social Security Act.  In February, the few groups consulted on this important issue went to a lot of trouble to give feedback. A deafening silence ensued. The great Wellington one-way sucking machine ticked the box of required consultation while NGOs and concerned individuals are left feeling their time given in good faith has been devalued.  

It should not take more than 5 months to give feedback and a progress report on this vital issue. We are left with the impression that minds are made up and it is a fait accompli.  The direction is set for the next decade and worryingly, may pave the way as the 2007 amendment to the Act did, for an incoming National government to do what they usually do well- to undermine welfare.

Worse still, given the  enormity of the child poverty crisis , the lack of meaningful assistance for the coming recession and inflationary pressures for the worst-off families, the long overdue review of Working for Families has lost momentum if it ever had any.

Promised in 2018, delayed because of Covid, a half-baked attempt of a WFF review was made in 2020/21 behind closed doors and entirely without consultation.  The results were the changes enacted 1st April 2022.  There was no agreed proper principles behind these changes and they have created a raft of problems. The long-over-due inflation adjustment after five years was touted as a great boost to incomes of families with children but was no more than a catch up. Worse was the misguided attempt to make low income working families pay for these adjustments by leaving the household income threshold for abatement unchanged at the fixed $42,700. Worse still, all income above that threshold became subject to an increased clawback of 27% putting low income working families struggling to earn more in inflationary times in a vice-like poverty trap.  

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Come 2022, views were sought on the issues for the promised WFF review. There were just 50 written submissions made in May based on a flimsy consultative document.  The promised summary is still nowhere to be seen.  We have finally extracted some information by OIA on what has happened to this review.

“As outlined in the consultation document, written submissions and the online survey were open from 20 April – 31 May 2022. Targeted engagement with stakeholders was undertaken between 10 May and 14 June 2022. Final advice is due to Ministers later in 2023.”

Is 2023 a misprint?  No hint of consultation on the advice to be given? No date for feedback to those who went to so much trouble to participate in the so-called consultation. Options for the Minister later in 2023 mean that no reforms are possible unless Labour wins the election. So much for the mandate for and promise of transformative change.

Here what needs to happen before the end of this year

  • Rename WFF and redefine goals to be about the needs of children, not paid work.
  • Make WFF child-centric and decouple from all paid work requirements and the source of parental income. This entails extending the equivalent of the indexed In-Work Tax Credit to all low-income children, whether their parents are on-benefit or not and acknowledges the valuable unpaid work of parenting and volunteering. 
  • Index all WFF payments to wages annually (and to inflation when it exceeds wage growth) as is the case for NZ Super.
  • Increase WFF thresholds from which WFF starts to reduce to restore the real value last set in 2018, and index annually. In 2022, it should be at least $50,000. 
  • Decrease the WFF abatement rate to 20% to lower the effective marginal tax rates on low income ‘working’ families and improve the returns from work. 
  • Increase the threshold for abatement of benefits to 10 hours at the minimum wage—would be $212 in 2022

 

26 COMMENTS

  1. What is WFF? Could most ministers even define that acronym? Answer, its a taxpayer subsidy to enable our government to run a low wage economy.

    It works in nicely with the accommodation supplement as both allow housing to continue to be traded as a commodity to enrich banks , investors and the rentier class.

    Without either a sizeable chunk of our population will end up reliant on the third pillar of the government’s welfare trilogy, a motel or a car. Destitute.

    Of course the reports are buried. It’s the way the Ardern government roll. 1000% political. Its all they know. May be of some use come election time though, to Labour that is.

    Transformational? Kindness? No. Not really. Actually, not at all! Shame on this useless uncaring and frankly, fraudulent government and everyone of its culpable MP’s.

    • you forgot working for families a tax credit is a subsidy to low paying NZ business

      and you’re right about culpability being a member of any govt tars you with the same brush,,,and we need to emphisise that when voting for MPs ‘stay silent lose the lollies’

      • No one says that NZ Super is a subsidy to employers– but the same argument applies. If workers were paid enough surely they could save for their own retirement. Does NZS allow wages to be low? Working for Families (WFF) recognizes that low income families need help with the costs of their children. It only applies to those with children. Interesting I have not heard the argument in Australia that their equivalent of WFF called Family Tax Benefits are a subsidy to employers. Over there since July 2022 the threshold for abatement is $58,108 and the rate of abatement is only 20%. In New Zealand our threshold is not automatically adjusted and is far too low and a 27% clawback is absurd. It interacts with other abatements in an extremely damaging way and we wonder why productivity is so low

  2. COVID gave an opportunity of a lifetime to fix all NZ’s disparities. If the money printers were going Brrrr all that free money could have been thrown towards building houses, lifting poor kids out of poverty and getting people out of those horrendous Rotorua B&B’s but no, our empathetic government pushed all that money to enrich the rich further and they sort of hoped that they may trickle down some excess waste on us. They trickled down on us alright but it wasn’t money. The problem is National and 7 houses scumbag are going to be even worse and we can thank Jacinda for this too because if she had done what she should have Labour would be in for a further decade. Why on earth did she decide to only look after the people who do not vote for her?

    • “Why on earth did she decide to only look after the people who do not vote for her?”
      Easy! Ardern is a Blairite.
      That is government by spin.( Bullshit condescend and lie and divide)
      Closest authoritarian neoliberal capitalism.

      • MickeyBoyle – How about : Because capitalism has always needed an exploitable underclass and sadly neoliberalism functions best on divide and rule.

  3. ‘Rename WFF’….working group needed, lots of Hui involved (as it will HAVE to have a maori rebranding name)
    Now 6mths later and a few million spent the new name is revealed….now what was the problem again?

  4. Well said, Susan, and thank goodness that they cannot silence you as they are determined to do to the Commissioner for Children. Shame on Sepuloni,MP, and her shabby ilk.

  5. Whatever it is, I think what is being suggested here should be done if it will make a big dent in child poverty. Bring November 5th forward to 5th August and start the fireworks going then so good things get accomplished.

    Try investing in Love And Money And Real Caring for PARENTS and Children and Leading as part of the ‘social investment’ plan that Bill English apparently started. What cold-minded separatists from the human race think is an appropriate way to treat other people they consider lesser – leads right to Oranga Tamariki, a terrible use for the Maori language.

    And I put up again a link to an interesting window to the new proceedings and why there is no Childrens Commissioner.
    https://www.pressreader.com/new-zealand/manawatu-standard/20220707/281754158025812
    ‘We don’t need a Commissioner to tell us what is just child’s play that any sensible human being can do, look after children and socialise them. Those who can’t manage it are therefore not human beings with sense and anyone could see force intervention on their unfortunate behaviour’! /sarc (This is an example of what passes for thinking in the minds of the patronising, superficially acceptable, anti-people in charge of NZ children, our future.)

    Here is a piece on cold-minded thinking which might throw light on the people involved in this Oranga Tamariki:
    Cold-minded thinking? The role of emotional intelligence and emotional stability in Machiavellian decision-making. https://pubmed.ncbi.nlm.nih.gov/24142289/
    Previous studies clearly show that Machiavellians’ thinking and behavior are characterized by some kind of cold attitude, a tendency to be detached from the emotional features of a particular situation. However, very little is known what this cold-minded attitude means, and the presence or the absence of what abilities can lead to emotional detachment.
    Surprisingly, our study has shown that Machiavellians – contrary to what others believe – happen to exhibit more emotional instability than others. They experience more negative emotions, lose their peace of mind faster, and have a hard time tolerating psychological distress. However, they try to conceal their emotional worries in two different ways. On the one hand, they cannot express their emotions as subtly and precisely as others, and on the other, they are much worse at identifying and differentiating their own emotional states.

    Maybe it is just the deficit in evaluating and expressing emotions that enables them to implement the strategy to enforce their self-interest successfully. The weak ability to identify and comprehend their own emotions may help them stay detached from the emotional temperature of a situation, while the difficulties in expressing their emotions enable them to disguise their true intentions from their partners.

  6. This from the post: Promised in 2018, delayed because of Covid, a half-baked attempt of a WFF review was made in 2020/21 behind closed doors and entirely without consultation. The results were the changes enacted 1st April 2022. There was no agreed proper principles behind these changes and they have created a raft of problems.
    Isn’t this what happened with Ruth Richardson and National; they arbitrarily cut welfare payments back in 1991?
    https://teara.govt.nz/en/video/26094/1991-benefit-cuts

    I understand there was no attempt to factually tie the new welfare payments to actual costs and models of need. It was said to be a simple decision to slash say 20% off welfare payments to some and perhaps less to others, perhaps that sort of targeting, but overall just to cut, cut and devil take the hindmost.

    So again we have the notional idea of what should be paid according to mental gymnastics about ‘deplorables’ the name in mind for all welfare beneficiaries except, for the moment, old people. Don’t hold your breath about care for this very expensive phalanx advancing in numbers and needs and cost! Except
    that they feed the business of providing retirement accommodation housing in estates belonging to the new aristocracy of lords of the land, property speculators.

  7. This morning on National radio was a story of promised action this government was going to take to stop the unwanted excess of tourists to Fiordland .When asked Minister Poto Williams said a paper was being worked on and results would be published 2024 . This is a government that says a lot but does nothing . Fixing Child poverty is just another of the long line of promises broken .

    • The only way we will ever get even the smallest bit of success is for Labour to be flanked by the Greens and the Maori Party.

  8. I am shocked at the low level for clawback. I have a daughter on DPB and provide her one day’s work a week @ $25 an hour. She is not allowed to earn one day’s income without a clawback coming into play.

    • Go to a beneficiary advocacy service. If in Auckland try Auckland Action Against Poverty. Income over $160 but under $250 a week takes 30 cents off every dollar. Accommodation supplement is not affected by income at all provided the person remains entitled to receive at least $1 of main benefit. Temporary additional support is reduced dollar-for-dollar from the first dollar received.

      Remember, too, that the DPB is income-tested on an annual basis, so weekly income, for example, if it fluctuates, can be averaged across a 52 week period. Often averaging will bring the weekly figure down to below the $160 threshold so there’s no abatement at all. MSD is very sneaky in this respect and likes whacking people weekly, so when a weekly income is over the $160 – it’s whammo for for that week, when the proper way is to assess an average. Just one of the many ways MSD like doing to rip people off.

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