www.cpag.org.nz

Media Release 3 August 2009

Children’s advocates have expressed concern about media reports suggesting that sole parents are better off now than they were in 1993 when the Minister of Social Development, Paula Bennett, was receiving a benefit. The figures in the Ministry of Social Development’s 2009 household incomes report show that there has been a deterioration in the economic position of sole parents. The child poverty figures show there are no grounds to be complacent about the support New Zealand provides for children in its most vulnerable families.

Child Poverty Action Group’s Dr Susan St John says that while the real value of the Family Tax Credit has increased slightly since 1993, many sole parents had their benefits cut in 2005 and have less access to supplementary assistance. She is also concerned that figures showing sole parents can get $165 in accommodation supplement and $181 per week in childcare are highly misleading.

“This is not income for them,” she notes. “Rents have risen markedly and the accommodation supplement funds only part of that, and very few sole parents get the maximum. Similarly, childcare subsidies go direct to the childcare facility. Parents have to make up the rest of the costs, and in some cases end up being out of pocket. For sole parents on a benefit, the maximum they can claim is $33, not the $181 being quoted. To be eligible for more they must be working, in which case their benefit is likely to be reduced. Let’s be clear – sole parents are not getting rich on the accommodation supplement or childcare subsidies.”

Dr St John says that while benefits are indexed to inflation, many costs that beneficiaries face have risen much faster than the consumer price index.

“The CPI rose 43% between 1993 and 2009, but petrol went up 76%, food increased 56% and housing increased by much more again. Beneficiaries’ incomes have remained largely static in real terms, but the costs they face have increased significantly. And unlike workers, they did not benefit from tax cuts.

In fact, far from supporting the assertion that beneficiaries are better off now than they have been in the past, the figures suggest a more realistic price index should be used to adjust benefits every year.

Using the stringent OECD poverty line of 50% median household income, before housing costs, New Zealand’s child poverty rate was 15% in 2004. In 2008 this had worsened to 16%. Too many children in sole parent households have been allowed to fall far below acceptable income levels. Society will pay a heavy price for many years to come.

ENDS

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