ActionStation & CPAG: Poverty Set To Worsen As COVID Support Ends Tomorrow

Activists and researchers are warning toxic stress, food insecurity and isolation are set to rise for many families in poverty almost immediately, as their weekly incomes reduce by $63 from tomorrow [Thurs 1 Oct].

“The Winter Energy Payment ends this week for those receiving benefits and NZ Superannuation, and because the payment was doubled this year for COVID-19 relief, the income drop is particularly sharp,” says Child Poverty Action Group researcher Janet McAllister. “Yet the financial uncertainty of COVID continues, and incomes for whānau and families on benefits were already too low even before COVID.

“Furthermore, our research shows core entitlements for many families on benefits often fall well below primary poverty lines even when they include the COVID-relief doubled Winter Energy Payment.”

Last month CPAG and Auckland Action Against Poverty urged the government to allow all low-income families with children access to all family support tax credits, and to extend the Winter Energy Payment period until welfare reform. Their call was echoed by organisations such as ActionStation and the Auckland Women’s Centre, whose single mums group has been worried about the end of the Winter Energy Payment period for months.

“We are disappointed that when Minister of Social Development Carmel Sepuloni was asked by Green party co-leader Marama Davidson in the House last month about our recommendation, the Minister refused to lift or even keep current family income levels as a stop-gap measure,” says McAllister. “Reducing incomes for families on benefits will entrench poverty at the deepest end, and this does not bode well for future child wellbeing. “Each day that goes by without bold action makes the poverty problem worse.”

Single parent Sarah Melvin says reducing her income by $63 a week will leave her with “a good chunk of bugger-all… for food and things, after rent, power, gas, water, kindy.”

Incomes for single people without children will reduce by $41 a week. Supported Living Payment recipient and ActionStation volunteer Nick Stoneman has needed income support since 1999. He has launched a petition calling on Minister Sepuloni and Prime Minister Jacinda Ardern to extend the Winter Energy Payment period. “This week’s income reduction will cause a lot of additional hardship for those who rely on welfare payments to survive,” says Stoneman. “Forty dollars a week might not be much for some people, but for us it’s a huge loss.”

CPAG election priorities for transformation include building 5000 state houses a year, and redesigning the welfare system so it treats families and whānau with dignity and guarantees them adequate incomes.

Background:

CPAG and AAAP recommendation to Government on 1 September 2020: “Immediately extend the Working for Families In-Work Tax Credit to all low-income families, and continue the current WEP past 1 Oct 2020 as a stop-gap measure, at least until the welfare system is reformed following Welfare Expert Advisory Group (2019) recommendations and family incomes are increased to adequate levels.”

The CPAG report ” Sheltering our children from COVID-19 fallout: New Zealand must raise incomes for the financially vulnerable instead of cutting their incomes on 1 Oct 2020 as planned” shows core entitlements for families receiving benefits are below primary poverty lines.

Nick Stoneman’s petition: https://our.actionstation.org.nz/petitions/let-those-on-welfare-keep-the-winter-energy-payment-beyond-the-start-of-october-2020