The Wellbeing Budget

Child Poverty Report

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What will we be doing next?

Budget 2019 is another step we are taking to reduce child poverty. The Prime Minister took ministerial responsibility for child poverty reduction on the formation of this Government and we have established the Child Poverty Unit within the Department of the Prime Minister and Cabinet to support a continued focus on tackling child poverty.5 Further programmes of work are being developed that will help us break the cycle of child poverty and progress towards our 10‑year targets, making a tangible difference to the lives of New Zealand children living in poverty. These will be the subject of forthcoming announcements, and a central part of key work programmes, including:

  • responses to the Welfare Expert Advisory Group (WEAG)
  • the development and publication of the first Child and Youth Wellbeing Strategy later in 2019
  • our planning to further embed wellbeing in Budget 2020 and beyond.

Budget 2020 will also mark our second report on child poverty, which will include one year of data of the impact of the Families Package on child poverty.

Table 7 – Budget 2019 initiatives that may affect child poverty

Direct impacts on the incomes of parents of children living in poverty

Increasing household incomes

$535.1 million over four years to make changes to benefits by:

  • indexing main benefits to wage growth
  • removing the penalty for sole parents who don’t identify the other parent and/or don’t apply for child support
  • increasing the amount that beneficiaries can earn before their benefit reduces (abates).

As part of this investment, modelling by the Ministry of Social Development indicates that approximately 146,000 families with 269,000 children will receive, on average, around $20 more per week by 1 April 2023. This investment will also benefit individuals without children.

At an individual initiative level:

  • By indexing main benefits to wage growth, it is estimated that around 339,000 individuals and families will gain, on average, around $11 per week by 1 April 2023. The amount people will gain will continue to increase beyond April 2023, as the difference between wage growth and inflation (current settings) is likely to accumulate over time.
  • By removing the section 192 (formerly section 70A) sanction, around 12,000 sole parents will be better able to support their families, by not having a deduction applied to their benefit each week. Around 24,000 children will be better off, with affected sole parents' incomes increasing by an average of $34 a week.
  • By increasing the amount that beneficiaries can earn before their benefit reduces, around 73,000 low-income individuals and families will benefit.

This initiative is expected to impact the BHC50, AHC50 and material hardship primary measures. It will also impact the individual experiences of families and children living in poverty.

Other initiatives designed to ease the pressures of children living in poverty faced by families

Helping parents with education and health costs

Additional Funding for Schools to Replace Parental Donations – $266 million to help alleviate pressure on families who struggle to pay school donations. Up to 1,703 schools could be eligible, receiving $150 per student for up to 494,000 students.

NCEA – Removal of Fees and Funding of Cost Pressures – $49 million to support equity of access to NCEA qualifications, increase residual incomes for low‑ income families and remove the need for the caregivers of approximately 23,000 students to apply for financial assistance.

Expanding and Enhancing School Based Health Services – $19.6 million to expand and enhance school based health services to 83,333 students in decile 1-5 schools.

Directly addressing material deprivation

KickStart and KidsCan – Continuing to Improve Child Wellbeing – $3.2 million to allow the KickStart programme to continue to provide breakfast to 30,000 children in over 1,000 schools; and KidsCan to continue to provide food and essential clothing to children in over 700 low-decile schools.

Housing affordability

Papakāinga development and rural housing repairs for better whānau wellbeing – $40 million to allow the Māori Housing Network to invest in 10 collectively owned homes every year, repairs to an estimated 100 homes every year and capability building programmes with 300 whānau groups.

Supporting Pacific Households into Home Ownership through Financial Capability Services – $2.6 million to improve home ownership rates for Pacific households, through financial capability services to 300 Pacific households every year.

Housing tenure

Housing Support Products – Expansion to Help More People Access and Maintain Tenancies – $18.9 million to support a total of 2,250 households to access and retain secure tenancies to minimise the risk of homelessness.

Other initiatives designed to ease the pressures faced by families

Targeted homelessness initiatives

Transitional Housing – Funding for the Continued Provision of Transitional Housing to Support Those in Need – $149.2 million operating; $134.2 million capital to maintain the supply of long-term and relocatable transitional housing places to approximately 2,800, and reduce levels of homelessness by providing transitional housing accommodation and support services for up to approximately 11,500 households.

Maintaining and Strengthening the Housing First Programme as a Response to Ending Homelessness – $197 million to strengthen the Housing First programme to a total of 2,700 places to improve the social and housing outcomes of chronically homeless people.

Income support

Meeting Minimum Wage Obligations Under the Home and Community Support (Payment – Travel Between Clients) Settlement Act – $23 million to ensure care and support workers are paid fairly for travel time.

Employment support

Ministry of Social Development – Increasing Case Management at the Frontline – $76.3 million to increase the Ministry of Social Development’s frontline staff capacity to be able to work more intensively with more people and help them into meaningful and sustainable work.

Disabled People and People with Health Conditions – Improving Employment and Wider Wellbeing Outcomes – $26.3 million to support an additional 2,600 disabled people and people with health conditions to find
and stay in meaningful employment, increase their knowledge and skills and improve their health and wider wellbeing.

Debt

Improving Consumer Protection Under the Credit Contracts and Consumer Finance Act 2003 – $16 million to protect consumers from predatory and irresponsible lending practices through doubling the Commerce Commission’s credit enforcement staff, education and advocacy.

Notes

  1. 5. Find more information on the Child Poverty Unit here: https://dpmc.govt.nz/our-business-units/child-wellbeing-and-poverty-reduction-group.

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