Emergency handouts for food soar

Winz says the number of handouts given for requirements such as food are soaring. Photo / Greg Bowker

The amount of emergency cash given out by Work and Income to help pay for essentials such as food is soaring in the economic slowdown - and expected to peak further over the next two years.

One-off "special needs grants" for things such as food, bedding and medical help increased from about $50 million in 2007 to $61 million last year. The Government has budgeted to spend nearly $79 million on the grants over the next year because of predictions of a spike in people facing financial hardship.

It will increase further to $82.4 million the year after before the spending drops off again to about $75 million.

Much of the increase over the past year was in payments for food, which were up by $9.6 million from the year before - a 30 per cent increase - to $35.3 million.

The discretion to give a grant lies with local Work and Income staff - and yesterday Minister for Social Development Paula Bennett said managers in her ministry were now regularly reviewing the use of the hardship grants and what they were provided for to make sure they were being used appropriately.

"This is public money. I want to ensure those in genuine need can access the assistance they need, particularly as times get tougher. However, as I have said, abuseof the system will not be tolerated."

She said the amount spent on food was expected to at least double because of a policy change in August 2008 which doubled the amount available each year. It means a family with two children can be given up to $900 a year. The increase last year was also because of special help offered to those facing hardship because of drought.

Special needs grants are not restricted to those on benefits. Income and cash assets are taken into account and the grants usually do not have to be repaid.

The grants are to cover "essential needs" such as food, bedding, and medical care. Last year, about $10.3 million was given for dental costs - the second largest category of spending. The third largest was $7.4 million for "other" costs - a broad category including firewood, plumbing, moving costs and pest control.

The grants are available for a wide range of things - vasectomies or abortions if user charges apply, laser removal of prominent birthmarks and fixing septic tanks.

One-off grants are also available for the resettlement of refugees and reintegration of ex-prisoners into society.

There are limits on how much one person can claim in a certain time period. The limit on bedding is $200 a year. It will also pay for drivers' licences and renewals if travel is essential.

Work and Income can also advance benefits to cover immediate costs, which must be repaid in instalments of no more than $40 a week. Last year, it advanced grants worth $115.1 million - which was expected to increase to $145 million by 2010.

Those not on benefits can also get one-off assistance payments which must be repaid.