What happens for children when the Winter Energy Payment runs out?

Low-income families on benefits have had the Winter Energy Payment (WEP) added to their weekly income since 1 July. But while some New Zealand Superannuation recipients are finding the WEP makes a significant difference in their lives, some low-income families with children say it barely makes a difference.

One mother said that at the same time as she received her WEP she lost her Temporary Additional Support, and is still struggling to meet winter costs. Another parent said that the WEP barely made up for the rent increase at the beginning of winter.

Child Poverty Action Group (CPAG) is concerned that once winter has ended many families will simply have their incomes reduced again, and may even be worse off than before the start of winter - especially if they've experienced increases in other costs of living. Rising fuel prices, especially in Auckland, have also had an impact on families’ weekly budgets, and will be felt more keenly when their WEP runs out.

Many low-income families experiencing material hardship have missed out entirely. Low-income families who aren’t on benefits will have had increases in their Working for Families (WFF) tax credits, but that might be as little as $20 more each week, for the one-child family, if their incomes are below $36,350.

"On the other hand the Winter Energy Payment was given to all New Zealand Super recipients indiscriminately, despite whether or not they were already well off, or in paid work," says Associate Professor Susan St John, CPAG's economics spokesperson.

"This seems to be an expensive way to help the superannuitants who actually need it. It would have been much better to ask older people to opt in if they needed the WEP and the money saved given to the low-income working families who have missed out."

"Furthermore, all parents on benefits or who work less than the minimum hours of paid work, should have access to the full WFF tax credits for their children, which would help them much more than the WEP. An extra $72.50 of the In-Work tax credit would also go towards providing vital recognition of the unpaid work of the caregiver."

CPAG would like to see a shift in thinking around paid work as the central focus of support for parents. Instead the welfare system should be working more with the individual needs of each family.

This year we are calling on policy-makers and politicians reform the welfare system so that it is fit for families in the 21st century. That reform should be based on principles of compassion and caring, and the real needs of families, without stressful over-emphasis on paid work, and punitive, corrective methodologies.

ENDS

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