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The Government rejected plans to include beneficiaries in a package to help families with newborn babies, despite official advice they were the most vulnerable.
Budget papers show that last November, Treasury, Inland Revenue and Social Development jointly considered ways to give more help to families after the birth of a baby, in particular those on low to middle incomes, including beneficiaries.
Options considered included an increase in the parental tax credit (PTC) - part of Working for Families, but not available to beneficiaries - and extra paid parental leave (PPL).
Documents do not show when things changed, but by February ministers had rejected the inclusion of beneficiaries and had limited it to those in paid work.
That prompted officials to note: "Such a package would be targeted solely at families in paid employment. The children most at risk are those from beneficiary families and this package would not provide additional assistance to them."
Greens co-leader Metiria Turei yesterday said the Government's move "is one of the most astonishing examples of Government punishing children simply for being poor that I've ever seen".
The most generous option proposed by officials was a universal entitlement worth up to $3120 for 41,000 families at a cost of $90 million a year.
"The scenarios all deliver additional support of up to $3120, to low to middle-income families who do not get PPL, and to beneficiaries, on the birth of child," the advisers said. "They all therefore contribute to the objectives of the policy proposal."
Before changes in the May Budget, PPL was worth up to $6834 over 14 weeks and PTC up to $1200 over eight weeks. Families could not receive both.
Data showed PPL mostly went to the better-off, while more than 75 per cent of families receiving the lower PTC had household income below $60,000.
The 32 per cent who did not receive a payment were mostly beneficiaries and middle or higher-income families where the mother had not worked before the birth.
Research showed Maori and Pacific mothers were over-represented in the jobs and employment arrangements that excluded mothers from eligibility for PPL.
Turei said it was hard to fathom how the Government could justify excluding the poorest babies from getting the help that all other babies received.
"Their own advisers warned how low income and parental stress can have long-term impacts on children. Aren't those the babies who need the most help?"
But a spokeswoman for Finance Minister Bill English said the decision was "consistent with the Government's belief that paid employment was the best way to lift the most vulnerable families".
Cabinet had opted for measures to help families in paid work when a baby arrived.
The Budget increased the PTC from a maximum of $150 a week to $220 and extended it from eight to 10 weeks.
It also phased in a lift to PPL from 14 weeks to 18 weeks.
The spokeswoman said there were other measures in the Budget to help families, including free doctors' visits for under-13s.
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