New Zealand brings in $790m child hardship package

31 Mar 16

New Zealand’s first real rise in benefits in almost half a century is to come into effect tomorrow, according to social development minister Anne Tolley.

The $790m child hardship package, announced as part of the 2015 budget, will see families with dependent children enjoy an after-tax windfall of up to $25 per week, depending on how much other assistance, such as accommodation support, they receive.

Tolley said this will make a significant difference for those with children facing severe hardship, and will benefit around half a million children in the country.

Tax credit rates for very low income working families will also increase by $24.50 a week, while low income working families will see a $12.50 increase. Childcare assistance is also set to rise from $4 to $5 per hour.

The changes represent the first above-inflation rise in welfare in the country since 1973.

However, in order to balance this support, recipients will be expected to look for part-time work when their child turns three rather than five and will be required to reapply for benefits every 52 weeks, as jobseekers currently do.

Tolley said: “We believe the best way out of poverty is through work, which is why we are also changing the definition of part-time work for sole parents to 20 hours a week,” she added. This is an increase from 15 hours.

New Zealand has been dismantling its welfare system in efforts to cut the cost of benefits and move more people into work.

In January, Tolley celebrated the fact that the latest valuation of the welfare apparatus in the country found government reforms had slashed its costs by $12bn.

However, some have argued that the government’s reform is pushing people into poverty. Efforts from child poverty campaigners in New Zealand have proved particularly effective and been credited for prompting the government’s pledge to increase benefits to alleviate child poverty.

Child poverty rates in the country have been on the rise, climbing from 15% in 1984 to 29% today.

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