The Government has handed out millions of dollars in hardship assistant grants. Photo / Mark Mitchell
The Government has handed out millions of dollars in hardship assistant grants. Photo / Mark Mitchell
Dentures, vasectomies, glasses, wigs, hairpieces, laser therapy, tenancy tribunal fees, water tank refills and effluent treatment system maintenance and repairs.
These are just some of the examples that fall under hardship assistance grants that the Government will cover on an interest-free loan to beneficiaries and other Kiwis who meet thecriteria.
Food was also on the tab and did not have to be paid back while any payments for fire loss or burglary would be expected to be paid back.
In the nine months to September, the Ministry of Social Development (MSD) spent more than $52 million on hardship assistance grants for beneficiaries and low-income earners in the Bay of Plenty - a jump of just over $8.1m over the same timeframe last year. Nationally, it was $704.8m compared to $627.2m for the same period.
Budget advice services told NZME the grants provided a necessary safety net due to the spiralling cost of living because benefits were only designed to cover bare necessities. One says that being on a benefit ‘’is not a luxury’' and some parents were going without food so their children could eat.
MSD figures show that in the year to September, $52.34m was paid in hardship assistance grants compared to $44.22m in the year to September 2021.
The largest grants in the three months to September 2022 were $13.9m for ‘other’ which could include some of the items listed above as well as items such as clothing, bedding, fridges, freezers and washing machines.
Accommodation grants were $1.47m, medical and associated costs $697,744, food $505,816 and $186,254 was paid for electricity and gas. Grants were also paid to people affected by benefit stand-downs, school education costs, re-establishment grants, driver licences, and health-related costs.
Graham Allpress, MSD client service delivery group general manager, said hardship assistance was for people with insufficient income and assets.
The grants were for people who had immediate and specific needs that could not be met by their own resources, that could put them further into hardship.
Bay Financial Mentors general manager Shirley McCombe. Photo / Supplied
Bay Mentors Bay Financial Mentors manager Shirley McCombe said it was vital people could get support.
Clients on low incomes were often faced with expenses such as dental bills and car repairs that they were unable to meet.
There needed to be options that did not create further hardship, especially when children were involved, she said.
“Poverty has so many flow-on effects for children including lack of food security, inadequate housing, poor learning outcomes, poor health and disconnection from friends and family (especially for those in emergency housing).”
She said there were all sorts of reasons clients had MSD debt.
“Some are recoverable advances, some are overpayments and some are the result of undeclared income. It is not unusual to see clients with several thousands of debt, some up to $20,000.
“Everyone is struggling this year and those on low fixed incomes even more.”
The biggest challenges were accommodation costs, food and petrol.
Rotorua Budget Advisory Services manager Pakanui Tuhura. Photo / Andrew Warner
Rotorua Budget Advisory Service manager Pakanui Tuhura said the rising living costs had outstripped benefit and wage increases.
People needed to cover accommodation, food and power and the MSD provided a safety net when those costs could not be met.
“In many cases, our clients have already cut back on nearly all non-essential costs. Some are now having to start cutting back on essential costs while they look at ways to increase their household income. They are doing multiple jobs and taking in boarders.”
Tuhura said a benefit “is not a luxury” and was designed to only cover bare necessities.
“Long-term benefits are usually for people who are mentally or physically incapable of work and I can assure you they aren’t able to live a life of luxury off those either. The main sacrifice for beneficiaries is having to bear the stigma of being a beneficiary so the first sacrifice is around self-pride or mana.”
“The next sacrifice in urban areas tends to be food as this is the only one of the three necessities (accommodation, food or power) that they have the greatest control over. We have parents who are going without food so their children are able to eat.”
There may also be social issues in the household caused by the lack of money.
“So the largest impact in my own personal opinion is on the children’s relationships and social standing. In terms of physical disadvantages, the accommodation they are able to afford to live in and being able to keep warm in winter as well as the quality and quantity of food.
“They have will impact on them mentally and physically and even though there may be no school fees, they are limited in taking part in extra-curricular activities such as sports and arts where there are fees required.”
Salvation Army national financial mentoring co-ordinator Paul Forster said the best part about MSD loans was that they were interest-free.
“In some instances, people are only paying them back at $2 a week so it’s not draining too much out of their weekly benefit.”
What comes under Hardship Assistant Grants
A Recoverable Assistance Payment is a one-off payment to help pay an essential or emergency cost if you can’t pay it another way. It is available to all those who meet the criteria, not just those receiving a benefit.
An Advance Payment of Benefit is for people on a main benefit with an emergency cost they cannot pay.
A Special Needs Grant is a one-off payment to help pay an essential or emergency cost if you can’t pay it another way. Special Needs Grant for food do not have to be paid back.
