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

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.  

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


Related Posts