Ministry for Women report says mothers on welfare should be able to earn more without being penalised

Minister for Women Julie Anne Genter says New Zealand's welfare system needs to better support solo mothers. Photo / Mark Mitchell

Mothers on a benefit should be allowed to earn more before their welfare is cut, says a new report commissioned by the Ministry for Women.

The report, titled "Something's Got to Change", was based on interviews with 40 mothers in Auckland, Whangarei and Gisborne who were on welfare.

The report found that nearly all of them were motivated to get into training, education or work after having a child. But there were many barriers in the welfare system to achieving this goal.

One of the main problems was that abatement rates for welfare acted as a disincentive to shifting into training or work.

"Reducing the high levels of benefit abatement could … assist mothers to engage with part-time work which can provide not only income but also confidence and a social network," the report said.

Under the existing rules, a sole parent can earn $100 a week before their welfare begins to be reduced. Other entitlements like the accommodation supplement can also be cut.

One mother told the ministry that she did two extra shifts at work and had her accommodation supplement cancelled, forcing her to reapply for housing support.

Mothers also said that childcare costs and inflexible workplaces put them off shifting into work or education.

The report was commissioned by the previous National-led Government but will be released today by Minister for Women and Green MP Julie-Anne Genter.

"If we really want to make a difference in the lives of children in this country, we have to make it easier for solo mums," Genter said.

"That means significant changes to our benefit system and recognising the value of supporting those young mothers."

She was hopeful that the issues raised in the report would be addressed by the Government's review of the welfare system, which kicked off in May.

While the ministry's report recommended changes to abatement rates, Genter said she could not make specific recommendations about how much a parent should be able to earn before being penalised.

She said the findings from the report also applied to fathers on a benefit.

"It really is about supporting solo parents. But the vast majority of sole parent households are led by women and because of the gender pay gap and many other factors women are likely to be earning less as well. And they face additional barriers to getting into the workforce after having children."

About 84 per cent of sole parent households in New Zealand are headed by women.

As part of its confidence and supply agreement with the Greens, Labour has committed to reforming the welfare system and removing "excessive" sanctions.

A ministerial advisory was formed in May to review the welfare system, though most of the reforms are unlikely to be completed this Parliamentary term.