Benefit incomes up 40pc on 2018 - Ministry of Social Development report

Beneficiary incomes have increased 43 per cent since 2018, according to a Ministry of Social Development report. Photo / NZME

Benefit income levels have risen more than 40 per cent since 2018 after inflation and housing costs, according to a report the Government says shows it is "lifting living standards" for the most vulnerable.

Yet the Green Party says with record levels of need currently, it highlights just how low benefits were to begin with.

The Ministry of Social Development report takes into account inflation data from up to March 2022 and reports a 43 per cent rise in incomes after deducting housing costs.

When adjusted for the most recent changes to inflation, the increase comes to 40 per cent.

Total incomes for families who receive a main benefit have increased by an average of $60 a week in the last year.

While average incomes have increased across all family types in the past year, the largest increases have generally been for families with children, reflecting policy changes particularly to main benefit rates.

"These income increases are a result of the policy decisions we have made while in Government to improve the living standards of New Zealanders on benefit," Social Development Minister Carmel Sepuloni said.

"Total incomes have increased at a faster rate than inflation and we will continue to work with our families to make sure they are aware of the services available to them."

Green Party social development spokesman Ricardo Menéndez March said it was clear from this data just how low incomes were pre-2018, given there have been "fairly substantial real increases but there's still a shortfall to meeting basic needs".

A major report released in March by advocacy group Fairer Futures found a New Zealand family on a benefit needed an estimated $165 more a week just to get by - even after April increases kicked in.

And once the cost of participating in society was taken into account, they were up to $300 short each week.

"We urge the Government to take urgent action to ensure people's core incomes allow people to fully participate in their communities," Menéndez March said.

"Families should not be needing to rely on hardship grants or complex top-ups to be able to make ends meet."

The report also highlighted how much of a difference social housing support made to those on benefits.

Those living in emergency/transitional housing were generally required to
pay a contribution of 25 per cent of their income, while those in the provider market receiving the accommodation supplement typically spent half their income on housing.

About 2 per cent of those supported by a main benefit were in emergency/transitional housing, 13 per cent were in public housing and 64 per cent were receiving the accommodation supplement.

Menéndez March said this showed the need for better housing solutions, including more public housing.

"There's a clear gap in incomes after housing cost for people in private housing versus public housing, and so the Government needs to put in more resources to build enough public housing so renters do not pay more than 25 per cent of their weekly income on rent."

There was also a skew in favour of supporting families over single people on main benefits, the majority of whom had a health condition or disability that affected their ability to work.

For those on these benefits who are single, their after-housing total income is $201.

"They're being left behind by baseline benefits which aren't enough to make ends meet and a severe lack of affordable and accessible housing," Menéndez March said.

As of the end of April 2022, about 378,000 adults were receiving an income-tested main benefit, representing about 12 per cent of the overall working-age population.

Many people receiving a main benefit have dependent children – with 214,000 children (at the end of April), or about 19 per cent of all children, living in families supported by a benefit.