29 Mar 2022

Upcoming benefit increases 'too little, too late' amid high inflation

7:16 pm on 29 March 2022

Government benefit increases will still leave families trapped in poverty as the cost of living skyrockets, anti-poverty campaigners say.

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Photo: RNZ / Rebekah Parsons-King

The second of two benefit increases will be introduced on Friday, which are meant to leave some households better off by up to $55 a week

But the Fairer Future collaboration said some of the country's poorest families would still face budget shortfalls of up to $300 a week.

Spokesman Max Harris said families were under far more financial strain than in 2019, when the government's Welfare Expert Advisory Group recommended lifting benefits.

"Prices have gone up, petrol has gone up, food has gone up, rents have gone up," he said.

"When you have such a significant shortfall you're putting people into impossible positions, to make choices like to pay rent versus putting food on the table, or to pay rent versus going into significant debt."

The advocacy group's analysis compared Welfare Expert Advisory Group family cost estimates, adjusted for inflation, to government estimates of April benefit increases.

It found a couple with three children receiving Jobseeker would need about $300 extra a week to meet their total costs, including children's sport and contingency for unexpected bills.

They would need an additional $165 a week to meet their core costs, including everyday necessities such as rent, food and power.

A sole parent with three children would require around $240 more a week to meet total costs, or an additional $111 a week for core costs.

Auckland Action Against Poverty coordinator Brooke Stanley Pao said the Covid-19 pandemic and inflation had made the situation worse.

"The rising cost of living, it's unbearable for people and families on the ground," she said.

"Even people who are working are finding it hard, so we can only imagine what it's like for people who are having to survive on a benefit. It's extremely unjust and unfair.

"The much-vaunted income support increases will be too little, too late for most people."

Disability Advisory Trust volunteer chief executive Nick Stoneman said a weekly $3.93 increase in the Disability Allowance from 1 April was a "joke".

"It's not even going to cover the price of a bottle of milk," he said.

"By the time I've paid my rent, I've got very little money for food. I guess I'm very lucky in that I'm able to cope, but it's really, really hard to do."

Lifewise youth worker Aaron Hendry said rangatahi were constantly jumping through hoops just to survive.

"We're not providing enough support for vulnerable young people who are living in really precarious situations, who are getting barely enough to survive and are living lives of subsistence," he said.

Hendry knew young people who were still waiting for a benefit after applying in January.

"That means they're living in poverty right now, just trying to survive and living in desperation because they haven't got their support yet," he said.

The collaboration wants the government to increase core benefit levels to standard liveable incomes and raise the minimum wage to the living wage.

The group is also calling for an increase to the disability allowance, an overhaul of relationship rules, the removal of sanctions for people who do not meet their job-seeking obligations and Ministry of Social Development debts wiped.

The collaboration's analysis has been peer reviewed by economist Dr Michael Fletcher, who worked with the Welfare Expert Advisory Group.

Social Development Minister Carmel Sepuloni said the government's main benefit increases represented the biggest boost to income support in decades.

"These changes are in line with what the Welfare Expert Advisory Group recommended and will lift up to 33,000 children out of poverty," she said in a statement.

"A couple with children receiving a main benefit will be better off on average $237 per week when compared to 2017. This increase includes the Families Package, main benefit increases and increases to Working for Families."

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