Benefit increases go to 330,000 families - more than half in New Zealand

Green Party social development and employment spokesman Ricardo Menéndez-March. Photo / Supplied

More than half of families with children received a benefit in the first year of the Government's Families Package, according to the latest data.

The research, compiled by Motu policy institute, also concluded increases to accommodation support did not lead to corresponding rent increases.

And while the Government says it is on track to meet child poverty reduction targets, critics say rising housing costs are continuing to cripple families and systemic changes are needed to ensure any gains are lasting.

The National Party also says the Government has engineered a "benefit dependency crisis" with benefit numbers increasing under their watch.

The Families Package was introduced in 2017 shortly after the Labour-led Government rose to power, replacing the previous National government's proposed tax cuts.

The package aimed to support 385,000 families with children with an average of $75 extra a week by 2020/21.

It included a range of benefit increases and tax credits, along with the doubling of the Winter Energy Payment in 2020 and increases to the Accommodation Supplement.

Monitoring published today showed in its first year about 330,000 families were supported in the 2018/19 year with an average increase of $55 per week compared with 2017/18.

More than two-thirds of Māori and Pacific whānau with children received such supports and winter Energy Payments also went to about 1.2 million adults.

As of July 2021, around 78,000 parents and caregivers with children under 3 years old were receiving a regular Best Start payment.

About 1.2 million adults received the Winter Energy Payment in 2020 and 2021.

The report also found child poverty measures were trending down between 2017/18 and 2019/20.

However, the report also noted that rising housing costs and disruption to families' income caused by the Covid-19 pandemic had since eroded some of the gains from when the Families Package was first introduced.

Minister for Social Development and Employment Carmel Sepuloni said the report showed the package had been successful.

The Motu report also looked at whether increases to the Accommodation Supplement in 2018 went to landlords through increases in rent, rather than giving the extra support to individuals and families.

After two years it found about 90 per cent of the increase in accommodation support went directly to the intended recipients as after-rent income.

"Long-term trends show no evidence of rents for Accommodation Supplement recipients increasing faster than overall rents for new tenancies following the Families Package changes," Sepuloni said.

Green Party social development and employment spokesman Ricardo Menéndez-March said while it was good to see no link between rent increases and accommodation support, the truth was rents were still rising and taking a "substantial" proportion of incomes.

Since 2010 median rents have risen by 50 per cent while incomes have risen 20 per cent and inflation 17 per cent, leading the Greens to call for a range of rent controls.

"Rather than racing to meet landlords by topping up accommodation supports we need more systemic intervention, such as exploring rent controls," Menéndez-March said.

The downward trend in poverty levels was also positive, Menéndez-March said, but the focus should be on elimination.

National Party social development spokeswoman Louise Upston said more needed to be done to support people off benefits and into jobs.

"Supporting people off benefit and into jobs is the only path out of hardship for families however Labour have engineered a benefit dependency crisis with the number of long-term jobseekers increasing by 50 per cent under their watch.

"Much more effort is required to provide tailored employment assistance to support the over 185,000 New Zealanders on the Jobseeker benefit into work."