Joe Hendren

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Tuesday, November 29, 2005

Yay for Child Poverty Action Group Boo Labour

Great to see the Child Poverty Action Group win the right to mount a legal challenge to Labour's policy to exclude beneficiaries from the Working for Families package.

Such an exclusion is designed to widen the gap between beneficiaries and the working poor - the very same principle, among others, guided Ruth Richardson's infamous 'Mother of all Budgets' in 1991. It makes the Child Tax Credit (CTC) and the In Work Payment (IWP) nothing more than an indirect subsidy for employers, and lets them off the hook for consistently failing to pay their employees family friendly wages. The benefit cuts of 1991 are still with us, as benefit levels have never been increased in order to restore a similar comparative level with wages that existed prior to 1991.

To make matters worse, 'beneficiaries' is defined to include those receiving a student allowance, NZ superannuation or those on ACC for more than 3 months. So a single mum attending university will not benefit from the CTC or the IWP, and neither will grandparents acting as caregivers after the death of a parent.

Sue Bradford is calling on the Government not to appeal the Human Rights Review Tribunal decision. Sadly this is not an unreasonable fear given the petty litigious attitude of the Government on similar issues in the past (such as on defining a relationship like marriage).

If Working for Families was meant to be about reducing child poverty, it really needs to be asked why children of beneficiaries ought to be worse off, purely based on the source of their caregivers income. Its not something the kids can control after all.

The case is the first under 2001 amendments to the Human Rights Act that allowed Government policies to be challenged in the Human Rights Review Tribunal. It also sets another important precedent by establishing the right of non-governmental organisations (NGOs) to challenge discrimination in public policy, regardless of whether they themselves are directly affected. As an example, this decision could be of great assistance to NGOs working in mental health advocacy, as many people with past psychiatric/psychological issues regularly face systematic and unwarranted discrimination.

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At 11:38 PM, Blogger Dave said...

Joe, as you will see from my scoop article of today, (and blog post) on this, a beneficary does not include a superannuatant or an ACC recepient. I dont know where you got that from. However, in some cases, if the work test is met, these people will qualify for the in work payment.

WFF is about reducing child poverty, not eliminating it. Its just that the reduction is targeted to children of working parents.

Finally if a single mum attended university, and worked for 20 hours a week, she will get the in work payment/ child tax credit - but that will probably end up subsidising her abatement.

At 4:55 PM, Blogger Joe Hendren said...

Hi Dave,

I was suprised how much digging I had to do to respond to your comments - despite all the fancy websites and TV advertising for WFF nailing down eligibility for a lot of these programmes is more difficult than it should be.

In their press release CPAG state that in order to get CTC "Parents must not be receiving an income-tested benefit, NZ Superannuation or Veteran's Pension, weekly ACC payments for more than three months, or a student allowance."

This is confirmed as being correct on the IRD website here

On the In Work payment CPAG say
"Eligibility is by work test: Two parent families not receiving a benefit or student allowance need to work at least 30 hours a week between them. Sole parent families not receiving a benefit or student allowance must work at least 20 hours a week."

I wasn't able to confirm what they say about student allowances, even though it makes sense once you do the numbers. Assuming an income limit of $135.13 before tax, someone working 20 hours on the minumum wage would earn $190 which would immediately put them over the limit.

You appear to be right about ACC reciepents being eligible for IWP, so long as they would have worked the required hours at the time of the accident, if the accident happened on or after 1 January 2006 (I had to go through one of IRD online forms to find that out!)

I wasn't aware those recieving Super could technically get IWP, if they worked 30 hours (or 20 hours for single caregiver), although it does stike me as being an unlikely situation.

Also if a partner is 'included' in Super payments they could only earn $80 a week.

I also think it would be unlikely that a single mum would be able to work 20 hours a week at the same time as juggling full time university and dependent childen. And as you say the abatement might not make it worthwhile. Why not design working for familes so that she can get good marks on her degree?

I can also forsee some obvious problems with making IWP subject to a work test based on the number of hours. Sadly many families now depend on causal and insecure work and they are likely to miss out on the payment unless they can show they work the required hours.

If WFF is about reducing child poverty, why does it benefit only 'working' parents and exclude most of New Zealand's very poorest families?

At 9:58 PM, Blogger Dave said...

Because the only other way the government can think of to keep the gap between welfare and work is benefit cuts - and they would have lost the election had they done this.

You wrote" I think it would be unlikely that a single mum would be able to work 20 hours a week at the same time as juggling full time university and dependent childen. Why not design working for familes so that she can get good marks on her degree?"

The answer to that is simple. She is not working full time, and working for families is designed for families who work at least 30 hours a week, with discretion down to 20 hours for sole parents. But the good kind Government has thought of another way - stick her on a benefit and not have her worktested until the oldest child turns 18.

She would be better off going on the DPB,collecting the full family support and accommodation supplements as well, and getting a training incentive allowance to pay for the fees, studying extramurally while collecting food grants - and spending more time with her kids as well.

Thats WFF for you - a qualification on the back of the government. But , like WFF, you must have kids.


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