NZ children suffer higher relative hardship than 20 European countries

According to a report published yesterday 19 per cent of children lived in homes that borrowed to cover everyday living costs. File Image / Thinkstock

Children are more likely to be in material hardship relative to the rest of the population in New Zealand than in any European country, the Ministry of Social Development says.

A ministry report prepared for the child poverty package in last month's Budget, published online yesterday, found that 18 per cent of Kiwi children lacked at least five out of 13 items of material wellbeing in 2008, compared with only 11 per cent of the whole population and 3 per cent of the elderly aged 65-plus.

New Zealand's ratio of child deprivation to the whole population average, with children suffering at 1.6 times the average, was higher than in any of 20 European countries for which the same data was available.

Although the figures are based on a living standards survey which is now seven years old, there were no significant changes in NZ policies which are likely to have improved New Zealand's ranking in the meantime.

The data was used in formulating the Budget decisions to raise benefits for families with children by $25 a week, and family tax credits for working families by up to $12.50 a week, from next April.

The 13 measures of material wellbeing included "having a meal with meat, fish or chicken every second day", "keeping the home adequately warm," "having two pairs of properly fitting shoes" and "having one week's annual holiday away from home".

The report also looks at NZ data for a wider list of 17 items including measures of hardship such as "postponed visits to the doctor", "put up with feeling cold to save on heating costs" and "borrowed money from family or friends more than once in the last 12 months to cover everyday living costs".

Again children were more likely than the general population to live in households with these hardships. For example, 19 per cent of children lived in homes that borrowed to cover everyday living costs, compared with 13 per cent of the whole population.

Across all 17 items, 21 per cent of all children (220,000) lived in homes suffering at least six hardships, compared with 14 per cent of the whole population.

However the report also reveals the basis of claims by Prime Minister John Key that the numbers in severe hardship are much lower than that.

Only 60,000 children (6 per cent of all children) lived in homes suffering at least 11 of the 17 hardships, compared with 3 per cent of the general population.

Using another list of 25 hardship items measured in the annual household economic survey, the report shows that hardship rates based on those suffering only a few hardships jumped when the recession hit from 2008 to 2010-11, and fell back in 2011-12 but were still above pre-recession levels.

But those in the most severe hardship, suffering multiple hardships, increased much less in the recession.

"A large proportion of those in less severe hardship and those 'just getting by' are in households where there are adults in paid employment.

When employment for the second earner disappears or hours diminish, these households feel the pinch very rapidly," the report said.

"Those in deeper hardship are predominantly those in receipt of a main working-age benefit, with some in working households on low wages. Benefit rates were maintained in real terms during the recession, so the deeper hardship rates were more steady."