Small boost denied to beneficiary parents

05:00, Aug 08 2014

A plan to offer beneficiaries with newborn babies a one-off $200-$500 a year was rejected by the Government, despite official advice it should be a priority, because solo parents were already receiving more than the paid parental leave entitlement.

Instead Social Development Minister Paula Bennett loosened the rules for hardship assistance, after instructing officials to work on options that would cost the Government nothing.

Stuff revealed last month that the Government rejected plans to include beneficiaries in a Budget package for families, which boosted paid parental leave (PPL) and the parental tax credit (PTC).

That prompted officials to note: ''The children most at risk are those from beneficiary families and this package would not provide additional assistance to them."

Now, papers released to the Green Party show the fall-back option of a payment of up to $500 a year at a cost of $6.7m was also rejected.

Ministry of Social Development (MSD) officials argued it would maintain the incentives to work because it would be much less than the increases to PPL and PTC for those in paid work of $1747.65 and $1250 respectively.

But Bennett said today she ministers rejected the extra payment because the average benefit for a solo mum with one child in Auckland was $552 a week against the PPL maximum of $488.

''We felt that we were actually giving more support to a sole parent who was on a benefit than the state was giving to a working parent who was taking time off on PPL. We looked at it from a logic perspective.''

The Government also wanted to maintain its consistent message of ''you are better off in work'' which was showing results.

''The other main reason was we just didn't want any encouragement for people to be having further children on benefit,'' though that was not the main consideration.

MSD and Treasury both backed assistance to beneficiary parents of new-borns to complement the changes to PPL and PTC.

''This new assistance would reduce the financial pressures and stress on low-income parents, contribute towards improving wellbeing during a critical period of child development and therefore contribute to improved short and longer-term child outcomes,'' MSD said.

But Bennett asked MSD to come up with ideas ''that do not have fiscal implications''.

The upshot was more flexible rules around hardship help, which Bennett said would mostly not have to be repaid. But it would represent only a small cost to the Government.

About 13,400 children are born to beneficiaries each year and $2.5m in grants last year went to parents with a child under one year old.

Green co-leader Metiria Turei said it was astonishing that after ruling out giving new-borns whose parents are beneficiaries the same payment as all other babies, Bennett had also rejected officials' advice to at least give them a smaller payment.

''What Minister in her right mind would deny tiny newborn babies the opportunity for improved wellbeing, at such a critical stage in their development? This is cruelty beyond anything we've ever seen from this minister.''

Turei said the advice showed 80 per cent of hardship payments to the parents of newborns were for food.

''It just shows how desperate life is for some of the families these tiny babies are being born in to.''

Bennett said it was ''hard to express how much I care for these children''.

But it was a complex issue involving ''the bigger decisions that will drive a societal change as well as backing those parents that will make the biggest difference''.