Will changes to Working for Families leave people worse off?
An organisation representing financial mentors around the country is worried that proposed changes to the Working for Families scheme could leave some families worse off.
As part of the Budget, the government said it would look at options to help avoid the issue of Working for Families debt.
In the 2022 year, only 24 percent of households receiving weekly or fortnightly Working for Families payments and who were squared up by IRD at the end of the tax year had received the right amount of money.
People who earned more than expected can end up with an overpayment debt that that they struggle to pay back.
There is almost $300 million owed in Working for Families debt.
A discussion document, on which submissions were sought, said the government's current thinking was that a quarterly assessment of Working for Families eligibility could strike the right balance between responsiveness, certainty and recipient effort.
This would adjust what people were paid much more frequently.
But Fleur Howard, chief executive of FinCap, said in a submission in response that she was worried that some families could be left without enough money.
A shorter quarterly assessment period would be an improvement, she said, but it needed to be refined.
"Aspects of the proposed design appear to suit some whānau situations better than others. We are concerned that in its current state, this design would have a disproportionally negative impact on those who are already experiencing financial instability due to more fluctuations in payment amount."
She said FinCap's internal data showed most financial mentor clients had a weekly budget deficit even after they had received help.
"More often than not, this deficit is due to whānau trying to pay for essentials, and commonly going into debt to do so.
"This, among other markers, points to the fact that government support is not currently adequate to cover living expenses. We have concerns that some of the proposed changes would exacerbate income inadequacy in certain scenarios, particularly for whānau who need that money week to week."
She said an example used in the discussion document, outlining a situation where a woman on the sole parent benefit went into additional work for a short period of time, highlighted a potentially unacceptable outcome.
In that case, the woman's Working for Families credits would be reduced by $130 a week for the quarter after her temporary work, even though she was no longer in work, because the calculation was based on the higher income from the previous quarter.
"We can see that the 'lagged income' mechanism makes sense from the perspective of achieving accuracy, however the potential for a decreased payment below what a whānau is entitled to poses real risk for wellbeing and social participation.
"There is also a real concern over the dynamic whereby a quarterly period of higher income followed by a quarterly period of low income would see increased hardship within the low-income period, due to those payments reflecting the past higher income.
"While this could be squared up during the end of year process, our data tells us that most whānau living week to week need that money as part of their weekly payments."
Howard said mentors were also concerned something similar could happen if someone lost a job and went on the benefit, because their reduced income would not show up in the Working for Families calculation for another quarter.
"Whānau need every cent they are entitled to in a timely manner when events such as job loss occur."
A solution could be for the quarterly assessment period to look forward, rather than backwards, she said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Otago Daily Times
an hour ago
- Otago Daily Times
NZ 'back on course', govt says
By Russell Palmer of RNZ The government has launched a defence of its record on tackling the cost of living. Finance Minister Nicola Willis joined Prime Minister Christopher Luxon at the Beehive Theatrette for the weekly post-Cabinet briefing. She spent much of the previous week facing questions about her meeting with Fonterra chief executive Miles Hurrell. Luxon said this week marked a full year since the tax bracket changes National campaigned on had come into effect. "It's only through a strong economy that wages rise faster than inflation, that Kiwis can get ahead of their daily costs and our businesses can take risks that can mean that they can invest, grow, and create more jobs," he said. He directly targeted National's main rival in opposition. "Other parties in Parliament believe that raising taxes, growing the public sector, and giving more handouts to those who refuse to work is the answer. Taxing more, spending more, and borrowing more as Labour and others advocate for didn't work in the past and it won't work in the future." The government's decision to increase fees paid to board members on Crown entities - in some cases up to 80 percent - may undercut the messaging that National is prioritising low and middle-income New Zealanders' interests. But Luxon today pointed to the building products changes announced over the weekend, and the proposed ban on payment surcharges as recent examples. He then pointed to other items in the government's agenda, including: the current pipeline of infrastructure projects, Roads of National Significance, completing the City Rail Link, signing trade deals with the United Arab Emirates and Gulf Cooperation Council, starting negotiations with India, the digital nomads visa, and the Investment Boost policy. Willis soon picked up the baton, rattling off her own list of changes the government had made which she said had helped lower costs, including: the Family Boost policy, ending the Reserve Bank's secondary mandate to account for unemployment, curbing government spending, changing residential tenancy laws, tax deductability changes for landlords, delaying the previous government's petrol excise increases, scrapping the Auckland Regional Fuel Tax, increasing rates rebates for seniors, increasing Working for Families support, and extending maximum subscription lengths. She said National had campaigned on tackling the cost of living crisis, and pointed to rising GDP per capita and wages rising faster than inflation as a result of the government's interventions. "Taking the pressure off inflation - that is the general level of price increases across the economy - helps with the cost side of the cost-of-living equation. Lower inflation means less pressure on prices... it's pleasing to say that wages are now growing faster than inflation and forecasts show this trend continuing over the next few years." She said the government's tax changes meant "households have benefited by an average of $60 a fortnight". The change to interest deductibility for landlords had helped to take the heat out of the rental market, she said, noting "the 2.6 increase for the year to June was the lowest since 2011". She said the government was also making big structural changes, saying "the last government conclusively proved that band aids are not enough" and pointing to a series of policies yet to come to fruition: the Going for Housing Growth policy, Fast-tracking renewable energy consenting, work to address supermarket competition, and to curb council rates increases. "Economies are like oil tankers, you can't turn them around on a dime. But New Zealand is back on course," Willis said. The lists of government achievements kept coming, with Willis also pointing to: education reform, the investment boost (again), promoting global trade and investment, changes to the research and development sector, and "delivering infrastructure projects faster and better". Meanwhile, a Cabinet Office Circular reveals the government signed off on increases to fees available to board members of Crown entities. This includes increases of 30 percent for Group 2 and 4 boards and Audit and Risk committees, and an increase of 80 percent for Group 3 bodies. Luxon said the public sector director fees "have got completely out of whack compared to private sector fees". "Obviously we will never pay as much as someone in the private sector but when you are spending $32 billion on healthcare for example, it's important that we are actually able to attract really good governors for the Health NZ board, for example," he said. The changes took effect at the start of July.
RNZ News
5 hours ago
- RNZ News
Government proposes scaffolding rules change to align with risk level
Photo: RNZ / Angus Dreaver The government wants to streamline "complex" scaffolding rules to cut costs and boost building time. Workplace Relations and Safety Minister Brooke van Velden will begin consulting with builders and construction professionals on how to simplify scaffolding rules and the prequalification process. Prequalification checks are done before a company or contractor can bid on or start work, to verify whether they can do a job safely. In a statement, van Velden said there are concerns from the sector scaffolding rules are too complex and have led to a view that scaffolding should be used in all situations, regardless of risk. "Over-compliance needlessly drags down construction productivity, increasing building time and costs for the sector, and impacting new builds and Kiwi homeowners." she said. Photo: 123rf Officials will consult on some proposed new rules, which would let people choose safety options based on how dangerous the job was. "Changes will ensure scaffolding use is better aligned with the level of risk. If it's not very risky, they will not need to use expensive scaffolding. For example, they will be considering whether a ladder could be used instead of scaffolding for a simple roof gutter repair or minor electrical maintenance when working at height. She said many in the industry were frustrated with the time and money prequalifications took to complete. "Businesses feel like they have to jump through hoops to tick a compliance box when getting prequalified, even though the prequalification often involves little reflection of the real-world risks workers face. Some have said they have walked away from clients as the cost of getting prequalified is not worth the value of the work." "A lack of consistency across providers means that suppliers need to get a new prequalification for every job they tender for, with one submitter saying they completed 76 in a year." Workplace Relations and Safety Minister Brooke van Velden. Photo: RNZ / Samuel Rillstone WorkSafe will work with the industry to revise its prequalification guidance and develop an Approved Code of Practice (ACOP) to cut down on their over-use. The inister said work was also underway to update scaffolding certificate of competence categories, with a review of certificate fees set to follow. "Concerns have been raised about the distinction between qualifications and actual competency. Many feel that on-the-job experience should be better recognised. There's also confusion about what constitutes sufficient training, and frustration with inconsistent advice from regulators," van Velden said. Sign up for Ngā Pitopito Kōrero], a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
13 hours ago
- RNZ News
Billboard camera footage used by transport agency to spot cars and trucks
NZTA Waka Kotahi has used privately-owned automated number plate recognition cameras to identity number plates. File photo. Photo: 123RF Footage from cameras in billboards at city intersections have been secretly used by the NZ Transport Agency for the first time to spot cars and trucks. NZTA Waka Kotahi's trial started in February, and is designed to combat fraud by illegal garages issuing warrants of fitness to cars, or passing trucks. Two sources close to the vehicle inspection industry say the move is surprising and questioned why the agency would do it, especially with using third-party technology systems. Police already tap into privately-owned automated number plate recognition (ANPR) cameras to identity number plates hundreds of times a day. But this is the first known use of that power by another state agency. "The ANPR donor cameras in the trial are not being used 'to spy on mechanics issuing warrants', nor would they be capable of being used for that purpose," NZTA told RNZ. "These cameras are typically located in billboards at urban intersections. "The trial is simply looking at the potential for using images gathered by these cameras to be used as proof of the location of a particular vehicle at a point in time." An inspector who claimed they had checked a car in Auckland at a certain time could be exposed if the car was spotted at a Christchurch intersection at that time, it said. It "could be of benefit in supporting investigations into specific cases where fraudulent or illegal activity is suspected". A well-connected industry source told RNZ: "Yeah, that has been a bit secret." NZTA might not have wanted to tip people off, the source said. "For the purpose the agency is stating, I don't have much issue with that, but the way they have gone about it is what alarms me. Especially because it's third-party [cameras and ANPR system]. "What else might they use them for?" NZTA Waka Kotahi said it was not using the images in any actual fraud investigations, but only as a test for potential future use. The test is separate from how the agency is taking over many speed and red-light-runner cameras from police, and replacing some with higher-tech models, which it will own. A second source active in the industry was appalled by the move. "Oh my god," they said. "It is part of your right to know the audit process you go through. You can't sabotage your process because of a trial." Months of inquiries by RNZ in 2018 showed up mass deficiencies in NZTA's oversight of how truck certificates of fitness were being issued. The systems were reviewed and changed. There have been further reports of inspectors anonymously recounting examples of how they feel they have been subject to unfair targeting by the agency. "You have got layers and layers of issues here," said the second source. "What's the limit [of surveillance]?" They questioned why was the camera sting even needed when fraud would "show up in paperwork. There will be tons of other evidence that can be used against people". Many supermarkets, petrol stations, other businesses and councils have a total of thousands of cameras that link into ANPR software systems run by two Auckland companies - Auror and SaferCities. The new trial uses SaferCities vGrid system , NZTA said. Its system covered electronic billboard operators such as LUMO, which had built-in cameras with ANPR software, and CCTV operators including councils, individual businesses and car park operators, the agency said. Police accessed the vGrid system more than 400,000 times last year. "NZTA only has access to still images from ANPR donor cameras whose owners have specifically agreed to our usage," Waka Kotahi told RNZ in the OIA response. "Currently, this only includes LUMO and more recently, Hamilton City Council." RNZ approached LUMO for comment. As of 2022, the country had at least 1400 digital billboards and screen-posters, many of them with smart technology and ANPR cameras . The police tapped the ANPR systems 700,000 times last year. In October, two district court judges dismissed legal challenges to the police using them so much without a warrant, though it is expected there will be at least one appeal against that finding. The fraud camera trial comes at the same time Waka Kotahi is reviewing the WOF-COF system to reduce how often collectors of old vehicles, and motorhome users, have to get a warrant. The agency has been increasing a lot of the fees it charges motorists since 2023. Another batch of rises is due next January that are expected to push up total fees collected by $10m to $264m . Camera footage could be used where it was suspected that WoFs or CoFs had been issued to vehicles which had not been inspected at the time or place recorded by a vehicle inspector, the transport agency said. It gave a hypothetical scenario to RNZ: "If NZTA was investigating a vehicle inspector suspected of fraud, and if the inspector had issued a WoF to a vehicle which was recorded as having been inspected at a WoF garage in Auckland at 2pm on 1 July, 2025, and we were able to access a still image from a donor camera of the same vehicle driving past a billboard located in Christchurch at 3:30pm on 1 July, 2025, this could potentially be used as evidence to prove that the WoF had been issued fraudulently, because the vehicle was not in Auckland at the time of the recorded inspection." This would not be a part of regular compliance monitoring, it said. Regular compliance monitoring included scheduled reviews where compliance officers visited inspection sites, as well as 'mystery shopper' activity. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
