Susan St John: Very poor just get poorer

Working for Families continues to be great news for many low-income families. Once fully implemented next year, after years of neglect, there will be an extra $1.6 billion a year for children.

But once more the worst-off among poor children have been left out.

From today a family on an income $35,000, for example, will get about $144 a week more in family assistance. But 230,000 of the worst-off children get nothing in the package because their parents or caregivers are not in paid work.

They may be on benefits or student allowances. They may be grandparents on New Zealand superannuation supporting their grandchildren in times of great family stress. These families face the same rising costs for their children.

Deb (not her real name) is a sole parent on the domestic purposes benefit, struggling to feed four boys.

She left a violent relationship with nothing and receives no financial support from family or the boys' father. She lives in "falling down" rented accommodation and has debts with Work and Income.

In contrast to the family on $35,000, Deb will get nothing at all on Saturday.

She says: "On the DPB I have been kept in survival mode a lot of the time, with the boys constantly saying they are hungry. I have gone to university to better my chances of earning enough to support them financially - but only part-time because I am conscious their emotional wellbeing is dependent on my presence in the home.

"The Government, by giving me less, is saying I am of less value than the paid workers. Even worse, it is saying my children are of less value than the children of paid workers."

The Government has been quick to point out in its defence that children in families on benefits were included in last year's increases in family support. They were - but things were not what they seemed.

The problem is that beneficiaries face vicious poverty traps because the harsh benefit system has forced many to rely on heavily means-tested supplements.

At the same time that Deb received an extra $70 a week family support last year she had most of it taken away in a core benefit reduction and a lower special benefit because family support was included in the income formula.

The minister said this was not of concern because the changes were designed to leave "no one worse off".

Other families have found that because of the extra family support their income-related rents have gone up, and increases in the accommodation supplement are also offset against the special benefit.

Worse, from Saturday the special benefit is being rolled over into the even less generous temporary additional support payment, so the struggle of families with children and who are on benefits is about to get even worse. The working family on $35,000 with four children now gets a total of $288 a week in family assistance.

Ironically, for a policy built on the mantra that says work is the prime virtue, one parent in this family may now enjoy the option of staying home full time.

Deb, on far less income, should be getting at least as much for her four children. But after the benefit changes, and because she is excluded from the in-work payment, she will get far less.

There are dangers in the widening gaps between the non-working and the working poor.

Leaving the worst off further outside the normal living standards of society is a recipe for disaster.

There is already too much evidence of the social consequences of neglect. To the shame of Auckland, Third World diseases are common in our hospitals.

The University of Auckland's paediatrics department head, Professor Innes Asher, continually draws attention to the high rates of preventable diseases in children, such as pneumonia, TB, rheumatic fever, and serious skin infections.

Demand for food parcels at the Auckland City Mission, the biggest foodbank in the region, is at its highest level.

Auckland City Missioner Diane Robertson estimates that 16,000 to 20,000 Aucklanders a year - including many children - have required help. The mission also supplies food to 70 other foodbanks in the region.

When so many families with children depend on foodbanks in a food-producing nation can we really believe we have a successful economy?

* Dr Susan St John is senior lecturer in economics at the University of Auckland and economics spokeswoman for the Child Poverty Action Group.

* For more information on child poverty see the link below.