READER REPORT:

A hand up, not a handout

ALEXIA WELSH
Last updated 05:00 11/11/2012

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Many of those who depend on a little help from Work and Income every week either already work part time, or would be willing to do so. I am one of those people.

I am a married, mother of two children under six and I currently work 10 hours a week. Any more than that, and not only would I receive less help from Work and Income, I would also have to fork out more money for childcare. It's a catch-22 situation - work more and be self sufficient and suffer, or work less and rely on the Government and therefore be better off. It's easy to see why many New Zealanders prefer to stay on the benefit.

In a year's time my son will be off to school also, so I will be able to afford to return to full time work. I am more than happy to do so, and look forward to the day I can say goodbye to Work and Income and no longer rely on them. I am sure there are many others in my situation.

A few years ago, I wrote a letter to Paula Bennett. In my letter I explained the situation I was in, that it would almost cost more for me to return to work than to stay at home and receive a handout, as per the following:

Stay home, receive $160 a week accommodation supplement plus an in-work tax credit of $150 from the IRD, and I would not work any hours a week. I would put both of my children into preschool for 2-3 mornings a week at a total cost of $58. I would therefore have $252 left towards household expenses, along with my husband's wage.

Or: 

I return to work, earning $750 in the hand each week, but would have to pay $450 a week in full time childcare for my two children (neither of them were eligible for 20 hours as both under 3 years old). I would also be spending twice as much on petrol each week (an extra $30), and I would have to move both of my children to a new preschool that accommodates the ages of both my children and the hours I would need to work.

I would not get to spend as much time with my children as I would if I stayed at home or worked part time. I would therefore bring home $270 a week after childcare and extra petrol expenses were taken out of my wage. Missing out on spending quality time with my children and working 40 hours a week seemed like a big sacrifice to make for an extra $18 a week!

I got creative, and proposed the following solution to Paula Bennett:

CURRENT SITUATION

I do not work at all and therefore do not pay any tax. I receive a weekly Work and Income/Inland Revenue (IRD) payment.

$160 per week (from Work and Income)

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$150 per week (from IRD)

-$58 per week (preschool mornings for education/social interaction)

=$252 per week for expenses

FULL TIME WORK SITUATION

Return to work with no help from the Government, only $18 extra in the hand per week.

$750 per week (40 hours work)

-$450 per week (childcare)

-$30 per week (extra petrol for travel to work)

= $270 per week for expenses

PROPOSED SITUATION FOR MUTUAL BENEFIT

Return to work full time, pay tax, Government to pay for half of childcare cost.

$750 per week (40 hours work)

$225 per week (government contribution towards childcare)

-$450 per week (childcare)

= $525 per week for expenses ($255 more per week, better than $18!!!)

GOVERNMENT SAVINGS

$310 weekly payment reduces to $225 per week, save $85 per week = $4420 per year

$211.53 per week tax paid by me = $11,000 per year

= Government would have $15,420 more in its pocket than if I didn't return to work and still received full WINZ/IRD handout of $16,120 per year.

If there were only 100 other people in the same situation as me, that would mean a saving of $1,542,000!

Paula Bennett unfortunately did not want to know about this.

It makes sense to me. Rather than give people money to stay at home and contribute nothing to the country's economy, send them to work to pay taxes but with a little help. It's less than the Government pays out now, but the rewards are so much greater.

Childcare is a big stress on families these days, I am only grateful I have a husband to help out with the bills also - I don't know how these single parent families manage to live.

The 20 hours ECE scheme is great for children over three years old, but at most centres in Auckland you would struggle to find somewhere that you didn't have to contribute something towards those 20 hours - they are not actually free. All the centre has to do is add one extra service to the current requirements and they can charge more per hour.

If the Government got smarter with the way they handled benefits, work and childcare together then I think that would not only improve our economy but the mental health of many families in this country also.


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