Couple who can't get Working for Families can't afford to live and might return to Canada

Families on middle incomes who don't qualify for Government assistance are feeling the squeeze. Photo / Getty Images

A couple who have full-time jobs and returned to New Zealand from Canada to give their children a Kiwi upbringing say their dream has turned into a financial nightmare.

They were not entitled to Working for Families [WfF] or other Government assistance like the Childcare Subsidy - and felt discriminated against for being middle-class income earners.

"We wonder why we work."

NZME agreed to only use their first names and Emie and Cody said now they were contemplating moving back to Canada where they would earn the same money but were paid a child allowance of about $4000 a year, subsidised childcare and other support.

"It's bloody sad," Cody said after coming home after 10 years to discover the grass wasn't greener.

"It pulls at your heartstrings because you want to live here but it's sort of out of reach. Now we have to look at our options and there is a better lifestyle and cheaper living in Canada."

Sitting on the porch of their small, modern home in Tauranga both admitted it was stressful and depressing and "we're one bill or one emergency away from going into debt".

"As soon as the car breaks or the fridge breaks we will have to go into debt because we don't have the money to fix it."

The couple earned about $112,000 a year. Emie earned $31 an hour and had already changed jobs once to increase her wage and Cody was on $23 an hour. Both loved the city and their jobs.

But childcare cost $60 a day for before- and after-school care while during the holidays, programmes were $500 a week for both children. Their rent was $615 and once tax, food, petrol, insurance, internet, KiwiSaver and other expenses were deducted there was nothing left.

Emie, who is Canadian, said they could not get ahead, buy a house, take their kids on weekend trips, do activities or go on any outings that cost money.

"We feel so bad for our kids and now they are asking us how much money we have because they hear us talking about it. We are really struggling."

The pair found it difficult to understand how some families were entitled to support while others weren't when they paid their fair share of tax.

For the year to March New Zealand's inflation levels surged to 6.9 per cent - the largest movement in 30 years.

Other commodities had also skyrocketed. Food prices climbed to a 10-year high, rising 7.6 per cent in March compared to the same time last year.

Transport rose 14 per cent and was the second most significant contributor to annual inflation. The largest driver of this was a 32 per cent increase in petrol price.

National leader Christopher Luxon. Photo / Mark Mitchell

National Party leader Christopher Luxon said National was hearing stories from people in the squeezed middle every day.

"We want New Zealand to be a place where people want to raise their families or start a business. Where, if they work hard, they can get ahead.

"It's heartbreaking.''

Luxon said National wanted to provide tax relief to the squeezed middle by adjusting tax brackets for inflation and reverse the new taxes to landlords which had seen rent prices go up across the country.

"This would give the average household $1600 of their own money back a year, which would help ease the pressure of the cost of living crisis.

"These are Kiwis who have good jobs and work hard, but just can't get ahead because this Government has let the cost of living crisis get out of control and neglected to do anything to support the squeezed middle."

He said inflation was rampant and people were paying more in taxes every year.

Minister for Social Development Carmel Sepuloni said its record on lifting incomes for low to middle-income New Zealanders speaks for itself.

''Since the day we came into Government, we've lifted incomes and reduced cost pressures on Kiwis, through measures like cheaper doctor's visits, free lunches in schools, and the family tax credit.''

Stats New Zealand data released this week showed a 4.8 per cent rise in average ordinary time hourly earnings.

Sepuloni said it had also restarted Childcare assistance, introduced the Best Start payment for parents and cut fuel taxes.

''There is more to do and we're committed to doing it.''

An Inland Revenue Department spokeswoman said the cut off for a family of two parents with two children to receive Working for Families was $101,000.

The most recent figures it had for people receiving the payment was 2019/2020 and that shows for the period ending March 2020 nearly 348,000 customers received Working for Families tax credits worth $2.8 billion.

Working for Families was first introduced on April 1, 2005. Inland Revenue administered the scheme but the rules it operated under were set out in the Income Tax Act 2007. The Government set the amounts and thresholds.

However, there was currently a review and public consultation on WfF to understand how it could be improved to better meet the needs of families. It closes on May 31.

Some families with parents working full-time are still struggling to make ends meet. Photo / Getty Images

Ministry for Social Development client service delivery director Graham Allpress said the ministry was there to help financially if you were on a low income or not working, and to support people into work.

That included help with accommodation, childcare, and financial support for the first few weeks of a new job.

It did not have any data available on how many MSD clients were receiving a Childcare Subsidy or Out of School Care and Recreation (OSCAR) Subsidy but said this newspaper could lodge a request under the Official Information Act.

However, a couple with two children earning $1600 gross a week was not entitled to a childcare subsidy.

Social development minister Carmel Sepuloni was approached for comment.