$8m emergency cash for beneficiaries

By Lydia Anderson

1 comment
Carol Peters
Carol Peters

Cash-strapped Northland beneficiaries are receiving millions of dollars in advance welfare payments, mostly to cover bond, rent or outstanding power bills.

Beneficiaries can request multiple advance payments to cover emergency expenses each year. But they must pay the money back from their weekly welfare payments, unlike hardship grants offered by Work and Income.

Ministry of Social Development figures released under the Official Information Act show Work and Income processed 21,506 advance payment applications for Northland in the 2012-13 financial year. This was down from 23,288 in 2011-12 and 25,644 in 2010-11.

Most applications were to cover rent and bond, followed by car repairs, electricity or gas, and accommodation.

Although the number of applications has dropped, 20,440 were approved and 1066 declined last year.

The average amount advanced was $412, while the largest advance payment was $3707 for mortgage arrears.

In total, $8,426,315 was paid out in advance payments to Northland beneficiaries last year, down from $8,950,674 in 2011-12 and $8,810,505 in 2010-11.

Whangarei's One Double Five Community House co-ordinator Carol Peters said clients had often requested advance payments for basic necessities, but the payments were becoming more difficult to get.

A client recently had no money left for food after making all his necessary repayments out of his weekly benefit.

"Basically, he was left with nothing to eat."

In situations like that, Community House had to find food for clients, she said.

Anecdotal evidence showed clients were less likely to get their full entitlement of advance payments without a beneficiary advocate, she said.

Nationwide, Work and Income gave out 306,528 advance payments last year totalling more than $113 million, down from 403,828 payments in 2010-11 totalling nearly $129 million.

The money was mostly needed to cover bond or rent, followed by accommodation and electricity or gas.

Other expenses included whiteware, car repairs and school uniforms.

Federation of Family Budgeting Services chief executive Raewyn Fox said the drop in applications was partly due to the corresponding drop in unemployment.

But it also reflected that many beneficiaries had already had several advances during the global financial crisis.

"If you get any more advances, you can't afford to live."

Ms Fox was not surprised tenancy costs were the most commonly cited advance expenses.

"It's a big lump of money that you have to try and save up to get yourself into a house."

Some beneficiaries had to forfeit a bond if they fell behind in rent and had to leave a property, which meant they needed help to raise a new bond.

"If somebody's on the benefit or really low income it's quite likely that they struggle with their rent anyway, particularly in areas where the rent's high."

After rent, power was the most expensive essential household item, she said.

Power companies were becoming "more strict" about timely bill payments.

"If you're on a limited income per week and you get a bill of $300 or $400, you just don't have enough money to pay for it.

"Sometimes [beneficiaries] choose to feed their families instead of paying their bills. They don't have easy choices."

- Northern Advocate

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