KEY POINTS:
Sole parents would be the big winners in a comprehensive plan to end child poverty unveiled by Children's Commissioner Cindy Kiro yesterday.
The plan, timed to set the agenda in advance of this year's election, aims to help sole parents into paid work by a huge boost to preschool and after-school care, allowing sole parents to earn more before they lose the benefit, and paying child support to sole-parent beneficiaries to supplement any part-time income.
It also recommends raising all core benefit rates, accommodation subsidies and family tax credits, especially for children under 13. These costs would be partly offset by abolishing the in-work tax credit, which gives an extra $60 a week to low- and middle-income families in paid work.
The plan focuses on sole parents because they had 176,000, or 88 per cent, of the 199,000 children living in families on welfare benefits last March.
A background report shows children who grow up in poverty are more likely to die early, have poorer health, lower educational achievement and go on to earn lower incomes themselves than children in better-off families.
It argues that a key to lifting children out of poverty is to help their parents into paid work, and that the best way to do this is to overcome barriers such as the cost of preschool and after-school childcare. It says the policy of 20 hours a week of free preschool education for 3- and 4-year-olds should be extended to younger toddlers and cover more hours.
"A fulltime employee needs 40 to 50 hours' childcare, allowing for travel to and from the workplace," it says.
The plan also suggests encouraging sole parents to work part-time by raising the $80-a-week income limit before their benefits are reduced "to the real value it had when it was set in 1996". That would mean letting them earn up to between $104 and $112 a week, depending on whether the limit was adjusted in line with prices or wages.
It stops short of specifying new benefit rates, but proposes an "immediate first step" of raising them in line with the tax cuts for working families due on October 1, which would lift the net domestic purposes benefit by $12 a week.
Beneficiaries are excluded from the tax cuts under the current policy of setting benefit rates after tax.
In the longer term, the plan proposes linking benefits to average wages and prices in the same way as old-age pensions. It suggests abolishing the $60-a-week in-work tax credit, arguing most of it goes to better-off families in paid work anyway.
* Working solution:
Boost preschool and after-school care.
Let sole parents earn more before losing benefit.
Pay child support to sole parents on benefits.
Abolish penalty for sole parents who don't name child's dad.
Raise welfare benefits and link them to wages.
Raise family tax credits, especially for children under 13.
Axe in-work tax credit.
* www.occ.org.nz/childpoverty
