Photo: RNZ / Quin Tauetau
As benefit recipient numbers hit new records, there is a warning that many households relying on JobSeeker are not able to cover their basic needs.
Ka Mākona, a new report from the Zero Hunger Collective, identifies how much of a budget surplus households have left after paying for housing, transport, food and utilities.
It shows that, in every part of the country and with every type of household modelled, someone on JobSeeker would have a budget deficit.
How much a household gets on JobSeeker varies according to thing such as their housing costs and the number of children they have. A single person on JobSeeker would get a basic starting benefit of $353.46 a week after tax. A couple with children would get $635.10.
The report said, at a national average level, a single adult relying on JobSeeker would have a $138.86 budget deficit per week.
A household with one adult and two children relying on JobSeeker would have a deficit of $93.93. A household with two adults and two children relying on benefits would have a $162.04 deficit.
A single person on supported living would also have a deficit.
There was variation between the regions - in Wellington, a two-adult, two-child household on JobSeeker would have a deficit of almost $300. A similar household in Gisborne would have a deficit of more than $317.
Researcher Jennie Sim said 20 percent of the working age population had inadequate income.
She pointed to the New Zealand Health Survey, which measured household food insecurity for children, and showed the proportion of children living in households where food ran out sometimes or often lifted from 14.4 percent to 21.3 percent between 2021/22 and 2022/23.
One in five children is living in a household where food sometimes or often runs out, according to the New Zealand Health Survey. (File image) Photo: 123RF
"For tamariki Māori rates jumped from 24.1 percent to 35.1 percent. Pasifika children still face the highest rates of insecurity, with 39.6 percent affected although this rate dropped 2 percent from 2021/22."
She said the biggest change in this year's report compared to last year's was the increase in rental costs in some of the centres, particularly Gisborne and Waitangirua.
"A Gisborne family face $115 a week and Waitangirua $84 in rental increase from 2023. Of course, those households' incomes haven't increased anywhere near that. So the family weekly deficit increases, as does the likelihood of that whānau struggling with food insecurity and/or debt.
"Unsurprisingly, this points to our broken housing system, and incomes not keeping pace with housing costs. I did a bit of a deep dive into the changes in incomes and housing costs using Infometrics' regional data ... generally incomes in most areas seem to have increased around 25 percent from 2019 to 2023, but rental prices have climbed a lot more - it's closer to 60 percent in Gisborne across that same time."
She said many lower-income households were not benefiting from the new childcare rebates because they had to pay the bill, and then apply for the refund.
"This method excludes many low-income families from accessing this assistance, because there is no capacity in the weekly budget to afford to pay for the childcare upfront."
Sim said the 2024 budget tax cuts, in the form of tax bracket shifts, gave low-income earners some tax relief. "It's been 14 years since there were changes to the tax brackets and these changes go some way to addressing fiscal drag, which arises when people's incomes move into the next tax bracket as their wages grow with inflation."
She said the changes to the Working for Families in-work tax credit meant working families had an extra $25 a week.
"Combined with tax relief, some households see income increase around $25 to $40 a week. This income gain is often lost through adjustments to lower levels of accommodation supplement, leaving smaller or no income increase overall.
"Housing costs continue to be disproportionate to incomes, and the accommodation supplement scheme is still based on maximum payment rates and payment areas set in 2018, so these payments are not relative to real-time rent costs."
The report said one budgeting adviser noted that people were spending up to 80 percent of their income on rent in Upper Hutt.
Sim said she was worried that because benefits would be indexed to CPI rather than average wage growth, it would mean more children were put into poverty.
"Treasury forecasts indicate this may result in an additional 7000 children in poverty by 2028. For an adult on the Supported Living Payment, this change results in $124 less this year, with a projected reduction of over $1000 a year by 2027/28. The 2 percent increase in minimum wage is half what was recommended by MBIE, resulting in $938 less annual income for a fulltime worker."
The report noted that many roles were paying starting rates at around the minimum wage, including flight attendants and ambulance officers.
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