27 Jul 2021

Covid-19 may have pushed thousands more children into poverty

5:50 am on 27 July 2021

New research from the Child Poverty Action Group shows that, in the year since the nationwide lockdown, many more whānau have been doing it tough, with Māori and Pacific the hardest hit.

Food parcels at  BBM HQ in Manukau.

Parcels being made up at a food bank in Auckland. Photo: RNZ / Simon Rogers

CPAG's modelling shows 18,000 more children have likely ended up in poverty in the 12 months to March 2021, even without taking into account the rising cost of housing.

Tamariki Māori and Pacific children were up to three times more likely than Pākehā children to be tipped into poverty.

Report co-author and CPAG researcher Janet McAllister, said the government did not give children and their families the prioritisation they needed as it developed policy responses to the pandemic.

"It is thanks to the collective efforts of iwi, hapū, community organisations, schools, whānau and families - and low-income children themselves - that the crisis of poverty was not even worse," McAllister said.

"Income loss due to job loss was probably inevitable due to Covid-19, but income loss to the point of inadequacy is due to our inadequate welfare system."

As result, struggling whānau turned to foodbanks in higher numbers than ever, more ended up in emergency housing and on the public housing waitlist, and some went into greater debt to cover the basics.

Auckland City Missioner Helen Robinson said, in the year to June, they handed out 48,000 food parcels - double the number in the year before Covid-19 hit.

"We are supporting people who have either lost their jobs completely; have had work go from full time, permanent work to casualised labour.

"We have had people who have gone from full time work to part time work; we have had people who have had to enter industries where they weren't paid as much as they were previously."

Robinson said, before the pandemic, the Mission was handing out about 500 food parcels a week.

During alert level 4 it peaked at about 1500 a week and, while demand has dropped back, it is still double what it was pre-Covid-19.

"Some people entered Covid already economically vulnerable, and those people particularly have suffered deeply. Many of those people are struggling to recover post-Covid.

"I think there were also some people going into Covid who were on the edge of that economic vulnerability and Covid has tipped them in."

About half of the people who went to the Mission for help in the last year were doing so for the first time, Robinson said.

Ngā Tāngata Microfinance provides interest-free loans to people on low incomes.

General manager Natalie Vincent said in the year to June, applications more than doubled - most of them for debt relief loans.

Vincent said people were getting into trouble with finance companies and credit cards, which often come with high interest rates.

"What we see is that those people have been using that high interest debt for day-to-day household expenses, day-to-day living, simply because they actually can't live on the benefit income that they have.

"They are in poverty, they are struggling," she said.

Because CPAG's report covers the year to March, it does not take into account the benefit increases announced in this year's budget.

But McAllister said struggling whānau need more help now and those increases do not go far enough to lift their incomes to adequate levels.

Meanwhile, McAllister said while there were differences between CPAG's child poverty modelling and that done by Treasury, it did not point to disagreement about whether or not things were bad for children.

"Instead, we have different predictions on what happened to median incomes for the country as a whole," McAllister said.

"From the data overall, it is clear that there was an increase in the number of children and their families suffering from financial distress in the first Covid-19 year, and the effects of financial distress - such as food insecurity and homelessness - worsened also."

CPAG looked at official statistics about the employment status of households with children, as well changes to the number of children in benefit-dependent households.

The most recent official child poverty statistics only cover the pre-Covid-19 period and the next figures will not be released until February next year.

Get the RNZ app

for ad-free news and current affairs