Children lifted out of poverty

Fewer children are living in poverty - but working-age singles are increasingly the new poor, according to the Social Development Ministry.

And the gap between rich and poor appears to be narrowing for the first time in decades, the ministry says in a report.

The government-commissioned survey shows that while the median household income grew by 6 per cent in real terms between 2004 and 2007, the incomes of those in the low-to-middle band went up the fastest, at 12 per cent, compared with just 2 to 4 per cent for those on higher incomes.

The Government's Working for Families boost to low- and middle-income families with dependent children is a major factor - Social Development Minister Ruth Dyson said it was a key driver behind the survey finding that 130,000 children had been lifted out of poverty. More people in paid work was the other reason.

The survey describes poverty as a situation in which a household is excluded from "the minimum acceptable way of life in one's own society because of inadequate resources".

Using disposable income as its measure, it was prepared by the Government's welfare agency, the Social Development Ministry.

To coincide with its release, Ms Dyson announced plans to scrap "stereotyped" names such as the dpb, and invalid and sickness benefits when the Government moves to a single core benefit next year - a change that will require the ministry to drop the names from all its brochures, letters, websites and training material from April.

Yesterday's report shows that rising poverty rates have been arrested for the first time in two decades, but once housing costs are taken into account, the rates are still significantly above what they were in the 1980s.

The report attributes that to a big rise in the cost of housing as a proportion of income in low-income households.

It also shows that while those in households with dependent children continue to make up the bulk of those classified as poor, working-age adults in households without dependent children - the group that received no extra assistance under the Government's Working for Families - now make up a much larger proportion of the poor.

They account for 31 per cent of all poor households, compared with 20 per cent in the mid 1990s and 13 per cent in the early 1990s. Pensioners made up a far smaller group - 6 to 8 per cent.

The report comes as a growing number of households feel the crunch from the cost of living, as the impact of rising fuel prices, ballooning grocery bills and higher mortgage rates hit home.

That appears to have been reflected in numbers of people seeking welfare grants for food, which were up 13,000 in June compared with a year ago.

Yesterday, Ms Dyson announced more financial assistance to beneficiaries through allowing two special needs grants a year, worth up to $550 for a family with three children, and increasing emergency support grants from $200 to $500.

She said across-the-board tax cuts in October and a further boost to Working for Families would help working families who were struggling.

But the Maori Party said the ministry report showed that 60 per cent of the children of unemployed families were still living in poverty.

"Incomes for the poorest families have not increased at all over the past 10 years," party co-leader Tariana Turia said.

 

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