Child poverty more than twice as likely to affect Māori, Pasifika, disabled children as Pākehā. Video / Mark Mitchell
More than $35 million was paid out to families on six-figure incomes in one year under one of the Government's measures on child poverty: payments of $60 a week to parents of newborn babies.
Prime Minister Jacinda Ardern has described Best Start as one of the programmes instrumental in herbid to halve child poverty by 2028.
But figures obtained by the NZ Herald under the Official Information Act showed millions of dollars was also going to the well-off – including $5.5m to more than 4000 families on incomes over $200,000.
Overall, a total of $131m was paid out in Best Start tax credits to families not on benefits in the 2019-20 tax year. The payment is worth up to $3120 a year, but cannot be claimed while on paid parental leave.
Almost 40 per cent of the 74,600 families who got the payment in that year were on household incomes of more than $100,000. Those 28,390 families were paid $35.3m.
A total of $13m went to almost 11,000 families on incomes of more than $150,000.
The tax credit scheme started in July 2018 and any parent of a newborn is eligible in the first year after birth, although it cannot be claimed while on paid parental leave. It is income tested for the second and third years and is worth up to $3120 a year.
PM Jacinda Ardern at a lunch in schools event on the 2017 campaign. Photo / Jason Oxenham
Act leader David Seymour said it seemed contrary for a Prime Minister focused on child poverty to be doling out millions of dollars a year to those on six-figure salaries.
"You come to Parliament to fight for social justice and all of a sudden you're subsidising bassinets for the rich. It's a mixed up, muddled up, shook up world for the Ardern government.
"It's difficult to see a worse example of targeting than giving $60 a week to people on six-figure salaries."
In a statement, Ardern defended the decision not to income test in the first year, saying those on lower incomes or benefits would get more because they would get the payments for longer.
"When we introduced the universal Best Start payment it was on the basis that every household experiences increased costs when they have a baby and that payment is to support the child."
She said three quarters of payments to April 2020 had gone to households on less than $100,000 and the payment was only one part of poverty reduction measures.
However, National Party's social development spokeswoman Louise Upston said the money going to higher earners would be better spent on things such as maternity services and post-natal care.
"It should be targeted to ensure that those who most need the support are the ones who get it. And that's not just in terms of income."
National's policy was to replace the payments with $3000 per family in post-birth services, such as health checks, for a baby's first three years.
Families on incomes less than $79,000 can get the full payments for three years. It is abated after that, so those on incomes up to $94,000 get part payments.
IRD has estimated that up to 58 per cent of households would get the three-year payments under Best Start.
Ministry of Social Development figures show 13,422 beneficiary families also received it in the 2019-20 tax year and 20,484 in the 2020-21 tax year.
The Families Package also included extensions to paid parental leave up to 26 weeks and more generous Working for Families tax credits.
An evaluation on the impact of those changes on the first cohort of parents to qualify for them found they delivered a much bigger increase to working parents than to beneficiaries for the six months after birth.
It found working parents on paid parental leave were $72 a week better off in the first six months of their baby's life than prior to the changes - an 11 per cent increase – while those on benefits got the smallest increase in income - $31 a week on average – a 5 per cent increase.
On average, parents of newborns were $55 a week better off.
However, it said those on benefits and low incomes would get more than workers in the long run because they would be eligible for the Best Start payments for three years.
