Core benefits don't provide enough to budget with, money helpline says

Tuesday, 7 January 2020

Long-term beneficiary John says, after he has paid his bills, he is left with just $140 a week to get by.

John, who does not want to be identified, receives a Supported Living Payment and is in a Housing New Zealand property.

'I most certainly could not afford to run a vehicle of any sort, and the last time I travelled was in 2010, and that was only due to some estate funds paid out to me.'

He said the rising cost of living was felt by beneficiaries more keenly than other parts of society. 'Costs have gone up, and for everyone. it's just some get a lot more than others due to being able to work.'

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That's a sentiment that has been supported by people working for MoneyTalks, a free budgeting helpline run by FinCap, which supports budgeting services around the country.

Financial mentor Adrienne Gallie said the core benefit rates needed to be lifted. She said beneficiaries who called her service did not have enough money to be able to budget.

The Jobseeker Support core rate is $218.98 a week for a single person without children, aged 25 or over, after tax. An accommodation supplement of up to $70 a week is also available depending on the area in which they live.

A sole parent receives $339.69 a week plus up to $305 in accommodation supplement if they have two or more children.

People were often referred to MoneyTalks because they had requested a number of additional hardship payments.

'When people on benefits ring up it's not because they have wasted their money, it's because they don't have enough to begin with,' Gallie said.

'This is a daily occurrence, just this last week a woman called who had been directed to undertake a budgeting activity so she could get an advance on her benefit to buy her kids a bed, and another woman called who needed budgeting advice to get a food grant, these are basic needs that people simply cannot afford for themselves or their families.

Beneficiaries have to jump through too many hoops to get enough money to live on, MoneyTalks says.

'When we put a budget together for people on a benefit and their families it takes as little as six or seven budget lines to put them into a deficit. Those lines are basic items like food, rent, electricity, petrol, and phone, they often include an advance repayment to WINZ.

'Frequently there's not enough to meet even those needs without resorting to more advance payments - debts repaid to WINZ weekly – which further reduces their future benefit payments.'

She said it was not possible to 'budget out' of not having enough income.

There was too much complexity involved in getting enough money to live on, because separate applications were needed for things such as temporary additional support and accommodation supplements.

A higher core benefit would simplify that, she said.

'The Welfare Expert Advisory Group recommended that core benefits are increased by 12 per cent to 47 per cent depending on the specific benefit. That would add only a small amount more per person per week, but budgets are so tight that even $20 is the difference between having a meal every day and being able to pay the electricity bill or getting further into hardship and debt.'