Karen Pattie: Work vs benefit - living wage needs to be adopted

Karen Pattie says there is a large percentage of people who ask about the viability of returning to work. Photo / iStock

Opinion

There is a large percentage of my clients who approach our service and ask us to look at the viability of returning to work -- single parents who are committed to getting off benefit and excited about the prospect of returning to work.

When we break down the in-work tax credit, the childcare subsidy, accommodation supplement and temporary additional support, it is not uncommon that the working single parent ends up with under $50 a week more in their hand.

We then look at transport, parking, appropriate clothing etc. for work. Work and Income will assist with a percentage of this cost, however, not the total cost, which then gets taken off the $50.

Then, school holiday programmes need to be paid for along with childcare, which is subsidised, and the $50 in hand is reduced further.

Given this, most of our clients still opt to return to paid work because we can see the benefits of work experience which may lead to better work opportunities. However, this does not provide a living wage and the extra expense of working does not often make this a sound financial choice.

What can be done? The in-work tax credit for low-income earners needs to be increased, childcare needs to be free for low-income earners, including after-school care and holiday programmes, the living wage needs to be adopted by employers and the Government.

The benefit is not a lifestyle choice, but when the income paid to working families is equivalent, we need to have a close look at incomes, rather than increasing subsidies.

•Karen Pattie manages the Beneficiaries Advocacy and Information Services at www.bais.org.nz