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Benefit Incomes – Why It’s Not Worth Working

A general view of signage outside the Work and Income New Zealand offices in Lower Hutt, Friday 7 March 2014. Herald on Sunday Photograph by Hagen Hopkins

Lindsay Mitchell
lindsaymitchell.blogspot.com

Lindsay Mitchell has been researching and commenting on welfare since 2001. Many of her articles have been published in mainstream media and she has appeared on radio, tv and before select committees discussing issues relating to welfare. Lindsay is also an artist who works under commission and exhibits at Wellington, New Zealand, galleries.


MSD have released a report on benefit incomes. I have long held that beneficiary advocates base their poverty pleading on the basic benefit rate, but those numbers are well under total incomes once the additional top-ups are included. Here is a selection of the graphs from the report:

Image credit: lindsaymitchell.blogspot.com

In this calculation $450 is nominated for a single person’s accommodation costs in a high rental area. This reflects a one-bedroom apartment in Auckland perhaps, but even then the sum is quite generous. All of the young people I know share flats and houses. And they have jobs. Most try and keep their accommodation costs below $200 per week. The example is very odd.

The next example shows a couple with two children. The nominated rent in this one seems reasonable:

Image credit: lindsaymitchell.blogspot.com

Note that their total income is $1,348 per week or $70,096. This is though just an example.

Below are actual average incomes by family type before and after housing costs:

Image credit: lindsaymitchell.blogspot.com

Averages reflect a range of living costs around the country.

The couple with two children receives $59,644 annually net.

It is immediately obvious that one working parent – let’s say the father earning around $60,000 – can only support his family as well as income from a benefit.

For example a father working in construction, education and automotive on the median salary.

If he worked in customer services, transport and logistics or hospitality and tourism he’d be worse off.

And we wonder why there is a labour shortage.

I am out of time but go look at the report, especially the section on inflation. (Don’t be tripped up by the ‘equivalisation’ process.)

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