Income support isn't providing enough to live on

Tuesday, 29 March 2022

Christians Against Poverty calls on the Government to force 'buy now, pay later' lenders to be responsible, and do credit and affordability checks before lending.

Max Harris is a campaigner, writer and legal researcher. He is the author of The New Zealand Project and has a PhD in law from the University of Oxford.

OPINION: Rising rents, food prices and petrol costs in recent weeks have highlighted how hard it is to get by in New Zealand at the moment, especially for those on low incomes or without work.

But this isn’t anything new. For some years now our public services have neglected those in need of income support.

Research commissioned by Fairer Future, a coalition of anti-poverty groups, unions and service providerspublished today confirms what frontline providers and advocates have known for some time: income support levels are far below what people need to live on, even after the Government’s benefit increases are introduced on April 1.

The report What are Liveable Incomes in 2022?, updates the approach of the Welfare Expert Advisory Group, which calculated what “core” spending is done by households, on things like rent and food, as well as “core + participation” spending (which included activities like fitness and cultural events).

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“Government could allow households to make a fresh start by wiping the debt owed to the Ministry of Social Development,” writes Max Harris.

Fairer Future’s work looks at what 13 types of household get under current income support, and how much that falls short of “core” and “core + participation” spending, when we take into account rising costs between 2018 and 2022. The results are stark. 12 out of 13 household types are getting far less than what they need.

A couple with two children on Jobseeker Support is getting at least $307 less than their core and participation costs. A sole parent with three children on Sole Parent Support would need at least $239 more to meet rent, food, and basic bills as well as other ‘participation’ costs. A single person on the Supported Living Payment (the payment you get if you, or someone you’re caring for, has a significant health condition or disability) is getting at least $115 less than what is needed for a liveable income.

These new calculations make clear what a “liveable income” means in our economy, and the gaping chasm between income support levels and what people need to lead a life of dignity. The calculations may even underestimate the shortfall. They don’t include items like debt repayments, which have been a more significant cost for households in recent years.

The calculations also provide a general update of costs between 2018 and 2022, and likely underestimate rent increases, which have been particularly sharp over that period.

So what should be done about this?

The Government has recognised the cost of living pressures faced by families and individuals by halving public transport fares and cutting fuel tax. These are welcome moves.

An even more direct channel for supporting families in need would be to increase core benefits to the levels of liveable incomes. This would give households enough money to meet basic costs (like rent, food, and bills) and to live a life where they can fully participate in society. Our community as a whole is better off when we support households in this way, rather than leaving people in debt and destitution.

The Government can afford this: public debt is far lower than similarly situated countries, and the investment would pay for itself in lower downstream costs in the health and justice systems. And it would be a mark of us as a society, as we come through Covid, that we are willing to provide a decent standard of living for everyone.

The Government is rightly focusing on improving the health system as it comes through Covid. Boosting income support is part of good health policy: it gives people the resources they require to meet basic needs, so that they are not putting off going to the GP or keeping themselves healthy.

Max Harris: “We don’t have a dependency crisis, as some political parties have said. We have a crisis of poverty and inequality.”

Increasing income support is just one part of a package of reforms that are needed. We need to lift the minimum wage, remove sanctions, and overhaul relationship rules.

It’s also time to increase the Disability Allowance and levels of supplementary assistance. And the Government could allow households to make a fresh start by wiping the debt owed to the Ministry of Social Development.

The Government has set up “clusters” to focus on cross-cutting work needed to address justice and natural resources and could even consider a “standard of living”` cluster to accelerate this work.

We don’t have a dependency crisis, as some political parties have said. We have a crisis of poverty and inequality.

National Party leader Christopher Luxon has referred in the last week to “bottom feeders” in our society.

The Government should reject this dehumanising talk, and take it on directly – with courage and integrity – by being proud of seeking to provide a decent standard of living for everyone through the welfare system.

Fairer Future’s research shows there’s a gap between a decent standard of living and current benefit levels. Now’s the chance for the Government to consign beneficiary-bashing to the dustbin of history once-and-for-all – and to plug that gap.