Govt’s $25 increase in benefits had ‘negligible effect’

WELLINGTON: A year on from the Government’s $25 increase to benefits, some solo parents and people with disabilities or chronic illnesses say it has made very little difference to their budgets.

University of Auckland sociologist Associate Prof Louise Humpage has been looking at the impact of the Government’s Covid19 response on beneficiaries.

As part of that research, she conducted detailed interviews with 12 people on sole parent support and the supportedliving payment.

Prof Humpage said while the $25 increase in benefits was welcomed, it had a ‘‘negligible effect’’.

‘‘Supplementary assistance like temporary additional support gets clawed back if you essentially earn more income.

‘‘For some people, they were actually only getting about $3 more than they had previously, so understandably they were frustrated by that because costs had gone up during particularly the lockdown period, far more than $3 a week.’’

For those in public housing, with incomerelated rent, the benefit increase meant their rent went up as well, Prof Humpage said.

One woman on sole parent support, interviewed as part of Prof Humpage’s research, said the increase meant her daughter could have ‘‘a labelled packet of biscuits instead of budget’’.

A man on the supportedliving payment, who is caring for his wife and bringing up two children, described the $25 increase as like ‘‘being in an abusive relationship where your partner cheats on you consistently and then buys you a box of chocolate from time to time to make up for it’’.

Another man on the supportedliving payment said the increase did not make ‘‘an iota of difference’’.

‘‘They need to add $100 to make it feasible,’’ he said.

He was living in his car so he could afford his medication. When he was living in a house, he would fall short about $100 every week, he said.

‘‘The compromise I’ve made to be able to afford the health expenses I have and all that, is I’ve compromised on having a home,’’ he said.

Prof Humpage said overall, the people she spoke to were ‘‘almost unanimously disappointed by the purported $25 per week increase to core benefits’’.

‘‘It was too little to make a substantive difference to most benefit recipients’ lives,’’ she said.

However, the oneoff doubling of the winter energy payment was much more significant, Prof Humpage said.

‘‘That significant increase . . . meant that people were either actually having heating and being warm — some of them were saying for the first winter ever — and others who prioritised other spending,’’ she said.

But this winter, the payment will go back to its usual rate.

Auckland Action Against Poverty coordinator Brooke Pao Stanley said that would cause families extra stress.

‘‘I think people in lowincome houses are very conscious of the amount of power that they use because bills can be so high during winter. It means that often they won’t heat up the house because people are worried about having to pay the power bill.’’

Prof Humpage said people on sole parent support and the supportedliving payment were struggling, even before Covid19 hit.

Meaningful change was needed, she said.

‘‘So we’re not talking about another $25. That is not sufficient to actually provide a liveable income that enables people to not only feed their children consistently with goodquality food but also to enable those children and their families to participate in society.’’

The Government has made other changes to benefits in addition to the $25 increase, including indexing benefit rates to wage growth and increasing abatement thresholds. — RNZ