Budget 2019

Beneficiaries will get an extra $17 a week after a surprise boost to welfare payments in the Budget - but they'll have to wait to get the relatively small increase.

While a change to the way benefit payments are calculated was applauded by advocates, they felt that the rate of increase was neither urgent nor large.

Asked whether the increase in benefit payments was enough, Green Party co-leader Marama Davidson said: "No, there's a lot more that needs to be done. It's an important first step. And absolutely, incomes need to be raised."

From April, benefit payments will be indexed to wage growth rather than inflation, meaning they will rise in line with average wage increases.

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As a result, 340,000 individuals and families would get $46 more a week by 2023 - or between $10 and $17 more than if payments were still linked to inflation.

A Welfare Expert Advisory Group said earlier this month that core benefit payments should be raised urgently, and recommended an increase of between 12 and 47 per cent. That would mean a person on Sole Parent Support went immediately from $334 a week to $374 a week.

Social Development Minister Carmel Sepuloni said since payments had been pegged to inflation in 1991, people on benefits had fallen further and further behind.

"It's time for change," she said, adding that reversing the policy would reduce rates of poverty among those on the dole.

It would also would limit the need to make "ad-hoc" or one-off increases - as the National-led Government did in 2015 when it raised benefit payments for families by $25 a week, the only increase outside inflation in 40 years.

Wellingtonian Kate Aschoff gets $183 a week in welfare. After housing and transport costs,around $25 a week is left for other costs.
Wellingtonian Kate Aschoff gets $183 a week in welfare. After housing and transport costs,around $25 a week is left for other costs.

Children's Commissioner Andrew Becroft said indexing benefits to wage growth was the single best thing Government could do to reduce child poverty.

"It is, in principle, entirely the right thing to do," he told the Herald. "Because it ensures enduring parity with wages."

But he also felt there needed to be a "catch-up" increase in payments which took into account the fact that benefit levels had fallen behind over the last 25 years.

"That's what we are waiting for," Becroft said.

As previously signalled, the Government will scrap a sanction which penalises mothers who do not identify the father of their child. Beneficiaries will also be able to earn more before they are penalised.

The changes are a victory for the Green Party, which campaigned on overhauling the welfare system. But co-leader James Shaw emphasised that the announcements in the Budget fell short of a transformation.

"We have a long, long way to go," he told Parliament.

Auckland Action Against Poverty co-ordinator Ricardo Menendez said the lift in benefit payments was small when the costs of living continued to rise.

"The Government needs to introduce a wider range of welfare reforms and invest on public housing if it is serious about the wellbeing of low-income people. This budget, unfortunately, failed to deliver on these two crucial issues."

'WON'T MAKE A DIFFERENCE'

Wellingtonian Kate Aschoff gets $183 a week in welfare. After housing and transport costs,around $25 a week is left for other costs.
Wellingtonian Kate Aschoff gets $183 a week in welfare. After housing and transport costs,around $25 a week is left for other costs.

Kate Aschoff, from Wellington, says the higher dole payments would make a huge difference - if they came in overnight.

Aschoff, 20, who identifies as "they/them", moved onto welfare 18 months ago after their mental health deteriorated.

They had been studying sociology at Victoria University but dropped out because of severe depression - which runs in their family - and dissociation. Aschoff turned instead to community work and volunteering.

On Jobseeker Support, Aschoff gets $183 a week, of which $140 is swallowed up by rent and $15 on transport.

"It goes pretty quickly. I have to save to go to a doctor or a dentist appointment or to do with things with friends."

Under the Budget changes, their benefit would lift to around $220 a week within four years.

"It is wonderful and aspirational," Aschoff said of the plan to peg payments to wage increases.

"It would be huge now. But because it's not imminent, it will be a difficult few years. It won't make any difference."

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