How to tell which Kiwi children are living in poverty
Tuesday, 13 December 2016
The latest version of the Child Poverty Monitor is out and, as with the three previous reports, it makes disturbing reading.
The monitor contains a bewildering array of data, but highlights two measures.
One of those measures is Material Hardship, which is based on a list of 17 'everyday essentials and services'.
According to the monitor:
- 14 per cent of Kiwis aged 0-17 years - 155,00 - live in households in which seven or more of the 17 items on the list are factors
- 9 per cent of those aged 0-17 - 85,000 - are in households affected by nine or more.
- Households with nine or more of the items are considered to have 'unacceptably low living standards'.
The list of 17 items used to determine households in material hardship is broken down into four subsections:
Enforced Lack of Essentials
1. Meal with meat, fish or chicken (or vegetarian equivalent) at least each second day
2. Two pairs of shoes in good repair and suitable for everyday use
3. Suitable clothes for important or special occasions
4. Presents for family and friends on special occasions
5. Home contents insurance
Financial Stress and Vulnerability
6. Borrowed money from family or friends more than once in the past 12 months to cover everyday living costs
7. Feel 'very limited' by the money available when thinking about purchase of clothes or shoes for self
8. Could not pay an unexpected and unavoidable bill of $500 within a month without borrowing
Economised, Cut Back or Delayed Purchases 'a lot' Because Money was Needed for Other Essentials
9. Went without or cut back on fresh fruit and vegetables
10. Bought cheaper cuts of meat or bought less than wanted
11. Put up with feeling cold to save on heating costs
12. Postponed visits to the doctor
13. Postponed visits to the dentist
14. Did without or cut back on trips to the shops or other local places
15. Delayed repairing or replacing broken or damaged appliances
In Arrears More Than Once in Past 12 Months
16. Rates, electricity, water
17. Vehicle registration, insurance or warrant of fitness
The second main factor in the monitor is Income Poverty. It compares a household's income to the median household income.
Household income measures come from data gathered in the Statistics New Zealand Household Economic Survey (HES), which are then included in a Ministry of Social Development (MSD) report. The measures are based on a family's disposable income that has been equivalised (adjusted for family size and composition).
Household income is defined as total after-tax income from all sources for all members of the household. It includes not only wages and salaries but also government transfers such as NZ Superannuation, income-tested benefits, and tax credits.
Incomes before deducting housing costs (BHC) and those for incomes after deducting housing costs (AHC) can be quite different.
According to MSD, median household income (BHC and not adjusted for household size and composition) was $73,500 in the 2014-15 HES.
The Child Poverty Monitor has two main measures of income poverty.
- A contemporary median threshold (comparing income in any year to the median of the same year) of below 60 per cent of median income AHC
- A fixed-line threshold (comparing income in any year to a reference year) of below 60 per cent of the median income AHC
A 2012 report from the Children's Commissioner said 50 and 60 per cent thresholds for equivalised disposable household income were used internationally.
'These thresholds have been chosen partly because they broadly equate to the level of income below which many households experience significant hardship,' the report said.
According to the 2016 monitor, 28 per cent - 295,000 - of dependents aged 0-17 were living in households with an income 60 per cent below the contemporary median AHC.
Using the fixed-line measure, 21 per cent - 230,000 - were living in income poverty AHC.
The number of those aged from 0-17 years who are both living in low income households and in material hardship is put at 90,000 - or more than 8 per cent of Kiwis in that age group. Those children and young people are classified as being in Severe Poverty.
Another indicator in the monitor is housing.
'Addressing quality and affordability of housing is arguably the most important action to mitigate the effects of child poverty in New Zealand and there is an urgent need to increase the housing stock, particularly for low-income families,' the monitor said.
Household crowding was clearly linked with poorer health outcomes, particularly for children, and there was also some evidence for poorer mental health, educational and social outcomes.
At the 2013 Census 85,578 (10.7 per cent) children lived in households requiring one additional bedroom and 44,613 (5.1 per cent) in households requiring two or more additional bedrooms.
The Canadian National Occupancy Standard was used to work out whether households needed more bedrooms.
The standard requires: no more than two people per bedroom; parents or couples share a bedroom; children aged under 5 years, either of the same or of the opposite sex, may reasonably share a bedroom; children aged under 18 years of the same sex may reasonably share a bedroom; a child aged 5–17 years should not share a bedroom with a child aged under 5 years of the opposite sex; single adults 18 years and over and any unpaired children require a separate bedroom.