Appendix A: COVID-19 and Budget 2020 policy responses that may impact child poverty
Changes to income support settings to help beneficiaries and the most vulnerable
- Increasing main benefits by $25 per week from 1 April 2020. This increase, combined with the planned adjustment from the Budget 2019 indexation change, means that most rates will increase by around $30 - $35 per week.
- Doubling the rate of Winter Energy Payment for 2020 only from 1 May. This payment gives beneficiaries and superannuitants $40.91 per week (for singles) and $63.64 per week (for couples or people with dependants).
- Removing the need to satisfy the hours test for the In Work Tax Credit from 1 July 2020. Working families with children who are not receiving a main benefit and have some level of employment income each week will still receive the payment even if their hours are highly variable or have significantly reduced.
Total investment of $2.8 billion for the changes to main benefits and the Winter Energy Payment. The change to the In Work Tax Credit is expected to cost an additional $128 million over four years.
Changes to support businesses to retain workers
- Implementing the employer Wage Subsidy Scheme to support businesses to retain staff during the COVID-19 crisis and associated public health measures, where some businesses will need to shut down. The scheme supports employers and their staff to maintain an employment connection and ensure an income for affected employees, even if the employee is unable to actually work any hours.
- Introducing the COVID-19 Leave Scheme Payment to support essential workers. The scheme subsides eligible businesses, and allows them to pay those workers who need to take leave owing to the COVID-19 Public Health guidance. The scheme offers the same rates as the Wage Subsidy Scheme of $585.80 per week for full-time workers and $350.00 per week for part-time workers.
Total investment of $12 billion for the Wage Subsidy Scheme and $226.9 million for the Essential Worker Leave Scheme.
Changes to support people to remain safe and well in their homes
- Protection for renters and tenants by providing a 6-month freeze on residential rent increases and increased protection from having tenancies terminated.
- Introducing mortgage repayment referrals to all residential mortgages for up to 6 months for customers financially affected by COVID-19.
- A $27 million package is being provided to social sector services and community groups to ensure they can continue to provide essential support to communities as individuals stay at home to stop the spread of COVID-19. The package supports services that ensure people have access to the food and other goods they need to survive; provide a place for people to live; support disabled people to maintain critical wellbeing; and keep families safe from harm and offer crisis support.
- A further $30 million support package to bolster the delivery of food and welfare assistance (including emergency accommodation) by local authorities and Civil Defence Emergency Management Groups to those who need it the most as New Zealand fights COVID-19.
Other changes implemented by this Government in response to COVID-19 to support the economy
- Developing a plan to support Māori communities and businesses in the face of COVID-19. This includes a whole of government approach to providing health, social and economic support tailored to meet the specific needs of Māori. This includes:
- a Whānau Māori Community and Marae package reprioritising $10 million from the Māori Development vote to support community outreach
- a Māori Health and Whānau Ora response with $30 million targeted directly to Māori Health services and $15 million to Whānau Ora commissioning agencies
- supporting Māori businesses and engaging with Māori with $1 million of funding to enable a needs assessment for Māori businesses, and providing $470,000 in grants to iwi to support them in their responses to the pandemic.
- Launching a Business Finance Guarantee Scheme for small and medium sized businesses, to protect jobs and support the economy. Under the scheme, businesses with annual revenue up to $80 million can apply to their banks for loans up to $500,000 for up to 3 years. The scheme will offer up to $6.25 billion in loans to New Zealand businesses.
- Introducing a range of business cash flow and tax measures, including:
- increasing the provisional tax threshold from $2,500 to $5,000 (which means payment can be deferred until 7 February) from 2020/2021
- increasing the small asset depreciation threshold from $500 to $1,000 - and to $5,000 for the 2020/21 tax year (which means low-value assets can be written off and offset against income)
- allowing depreciation on commercial and industrial buildings from 2020/2021.
- Providing emergency funding to enable distance learning for early childhood education and schooling ($87.8 million over 2 years).
Policy changes intended to impact child poverty and child wellbeing
Investment designed to ease the pressures faced by families
In Budget 2020 we are:
- increasing funding for free maternity services to New Zealand women ($57 million over 4 years)
- continuing to support the sustainability of WellChild Tamariki Ora service providers to deliver child health services including immunisations, health checks and other essential services ($71.2 million over 4 years)
- improving and increasing funding for a core service provided by MSD to improve financial capability and resilience of vulnerable people ($9.7 million total)
- improving and increasing funding for Out of School Care and Recreation Services (OSCAR) to allow parents to gain and maintain meaningful employment or undertake further education and training, while supporting children's wellbeing and educational attainment ($9.6 million total over 4 years)
- providing additional funding to Community Law Centres to ensure access to legal services ($7.7 million over 4 years)
- providing additional funding to the Commerce Commission. As the market and competition regulator, it is tasked with ensuring markets are competitive which has a flow on impact to costs of living for families of children living in poverty ($41.8 million over 4 years).
Investment designed to impact child wellbeing
In Budget 2020 we are:
- increasing funding for NGO service providers that deliver essential services critical to the running of Oranga Tamariki ($57.7 million over 4 years)
- providing additional funding to meet the needs of children in care to ensure children in State care can thrive ($70.7 million over 4 years)
- increasing funding to improve community services in rural and provincial communities provided by MSD to ensure access to a broad range of government and non-government services ($19.8 million over 4 years)
- providing additional funding to reduce waitlists for family violence perpetrators to access specialist services, including services by Māori with Māori. The services provide advocacy, one-on-one and group support, non-violence programmes and some counselling services for perpetrators of family violence ($183 million over 4 years)
- increasing funding for the Independent Children's Monitor (ICM) which monitors the system of State care and ensures that the ICM has sufficient resources to perform this vital function and that children in State care are supported to reach their potential and thrive ($31.5 million over 4 years)
- increasing funding for the Office of the Children's Commissioner to ensure it has the resources to maintain a child-centred approach and promote decisions that are in the best interests of children ($4 million over 4 years)
- providing additional funding to ensure that Kōhanga Reo continues to be a viable ECE option for Māori whānau. Increased funding for Kōhanga Reo staff aligns with evidence advising Government support of Māori education initiatives will help reduce child poverty ($93.4 million over 4 years)
- establishing a Pre-Trial Service under the Hōkai Rangi strategy, which will provide early support to reduce the number of people entering or remaining in custody. The service will also target positive flow on effects by supporting enduring and meaningful relationships between parents and their children (by providing tools to maintain in contact while they are in custody, or keeping suitable individuals out of custody) and by maximising positive outcomes for those involved in the service ($47.5 million over 4 years).