Latest news with #WorkingforFamilies
Scoop
3 days ago
- Business
- Scoop
Couple Owes $20,000 Working For Families Debt ‘Through No Fault Of Our Own'
Article – RNZ , Money Correspondent Just a quarter of 'squared up' Working for Families recipients are getting the right amount. Phoenix Ruka says he and his wife owe about $18,000 to $20,000 in Working for Families debt, despite always doing their best to ensure that they supplied the correct details about their income and circumstances. 'We've always stayed up-to-date with my salary and what we received from them and updated my salary every time it went up and down,' Ruka said. 'What were receiving was what they assured us we were entitled to. But then we got a massive bill saying they had overpaid us.' He said his wife had been 'relentless' in trying to work out what had happened. It was discovered that a couple of years they had been underpaid, by many thousands of dollars, which they were reimbursed, but one year they were paid too much, which left them with the debt. 'I think the really frustrating part is that it's through no fault of our own. We owe a substantial amount of money. Now they're taking $350 a fortnight out of our bank account,' Ruka said. 'We've gone back and forth and shown them our expenses, that we actually can't afford the amount they're taking. We've shown them our bills, our mortgage – they told us that they can't keep taking money if we can't afford it but we can't.' He said there had been multiple times where the money that was being taken to repay the debt was all that was left in their bank account. It's an issue the government is attempting to tackle with proposed changes to the way that income is assessed for Working for Families. As part of the Budget, it was announced that the threshold at which entitlements start to abate was to be increased slightly, and the government would look at options to help avoid the issue of Working for Families debt. Inland Revenue's discussion document said 85 percent of Working for Families households received their payments weekly or fortnightly during the 2022 tax year, based on an income estimate. Only 15 percent were receiving their credits annual based on the family's actual income once income tax had been assessed. Those who were being paid weekly or fortnightly were subject to an end of year 'square up' process by Inland Revenue, the document noted, although they were expected to update IRD with any relevant changes during the year. In the 2022 year, only 24 percent of households receiving weekly or fortnightly payments and squared up by IRD had received the right amount of Working for Families credits. Those who were overpaid are left with a debt to repay. The document said debt was a particular problem for low- and middle-income families because it reduced their ability to meet their day to day costs in the future. 'Debt undermines the intent of the Working for Families scheme to support low to middle income families to meet basic needs and incentivise work.' The amount owed by Working for Families recipients has been steadily increasing over the years. The document noted that in June 2024, 56,800 accounted for $273.5 million of Working for Families debt. There were 21,418 instalment arrangements in place to clear $50 million of debt. 'Having to estimate annual income in advance is the most common reason why families do not receive the right amount during the year,' the document said. 'For many families, estimating yearly income is difficult to do with any accuracy. Under the current income estimation model, families can still be overpaid when their income increases unexpectedly. For example, something as simple as a promotion or starting a new job towards the end of the year could cancel out their Working for Families entitlement and leave them in debt.' But the document said assessing people's income very regularly could mean a lot of changes in what people received. If someone was paid fortnightly, some months could have two paydays and some three. Someone who was paid every four weeks would occasionally be paid twice in one month. 'Families would need to check in more often to report or confirm their income so that Inland Revenue can recalculate their payments. This would mean an increase in time spent interacting with Inland Revenue and its systems. This could also mean payments would vary every week or month, making it harder for families to budget and plan.' The discussion document said the government's current thinking was that a quarterly assessment could strike the right balance between responsiveness, certainty and recipient effort. It was seeking feedback on the idea. The government also suggests a shift from calculating a recipient's Working for Families on the recipient's estimate of future income over the coming year to basing the calculation on past income they actually received. This would help to prevent people going into debt. It is also proposing to simplify the residence criteria for Working for Families and require both caregivers and children to be physically present in New Zealand to qualify. Susan St John, associate professor at the University of Auckland and Child Poverty Action Group spokesperson, said she thought the review was limited. 'There are huge difficulties for self-employed in more regular assessment. For income that is not earned regularly it can cause volatility and add to the admin or compliance load. There are other ways – in Australia they hold a portion back until the end of the year.' She said the review did not address the problems of Working for Families in a meaningful way. 'They arise because the threshold is way too low and the rates of clawback way too high.' She said the scheme was confusing with the different types of credits available, and the poorest 200,000 were excluded from the full package, missing out on about $5000 a year. Revenue Minister Simon Watts said the government knew that it could be distressing to have debt to Inland Revenue. 'We are interested in what people think of the proposals.' Another woman, Amy says she's still paying off the $12,000 in Working for Families debt she was landed with three years ago, amid a messy divorce. She and her husband were shareholders in a business and, she says, he incorrectly reported some of the business profit as income in her name. That prompted the government to think she had been overpaid credit and she was landed with a bill. She now can only receive $172 a week in Working for Families credits for her three children because she is paying back the debt. She is a single parent also paying a mortgage.
1News
3 days ago
- Business
- 1News
Couple owes $20k Working for Families debt 'through no fault of our own'
Just a quarter of 'squared up' Working for Families recipients are getting the right amount. Phoenix Ruka says he and his wife owe about $18,000 to $20,000 in Working for Families debt, despite always doing their best to ensure that they supplied the correct details about their income and circumstances. "We've always stayed up to date with my salary and what we received from them and updated my salary every time it went up and down," Ruka said. "What we're receiving was what they assured us we were entitled to. But then we got a massive bill saying they had overpaid us." He said his wife had been "relentless" in trying to work out what had happened. ADVERTISEMENT It was discovered that a couple of years they had been underpaid, by many thousands of dollars, which they were reimbursed, but one year they were paid too much, which left them with the debt. "I think the really frustrating part is that it's through no fault of our own. We owe a substantial amount of money. Now they're taking $350 a fortnight out of our bank account," Ruka said. "We've gone back and forth and shown them our expenses, that we actually can't afford the amount they're taking. We've shown them our bills, our mortgage — they told us that they can't keep taking money if we can't afford it, but we can't." He said there had been multiple times where the money that was being taken to repay the debt was all that was left in their bank account. Change proposed It's an issue the government is attempting to tackle with proposed changes to the way that income is assessed for Working for Families. As part of the Budget, it was announced that the threshold at which entitlements start to abate was to be increased slightly, and the government would look at options to help avoid the issue of Working for Families debt. ADVERTISEMENT Inland Revenue's discussion document said 85% of Working for Families households received their payments weekly or fortnightly during the 2022 tax year, based on an income estimate. Only 15% were receiving their credits annual based on the family's actual income once income tax had been assessed. Those who were being paid weekly or fortnightly were subject to an end of year "square up" process by Inland Revenue, the document noted, although they were expected to update IRD with any relevant changes during the year. In the 2022 year, only 24% of households receiving weekly or fortnightly payments and squared up by IRD had received the right amount of Working for Families credits. Those who were overpaid are left with a debt to repay. The document said debt was a particular problem for low- and middle-income families because it reduced their ability to meet their day-to-day costs in the future. "Debt undermines the intent of the Working for Families scheme to support low to middle income families to meet basic needs and incentivise work." ADVERTISEMENT Debt increases The amount owed by Working for Families recipients has been steadily increasing over the years. The document noted that in June 2024, 56,800 accounted for $273.5 million of Working for Families debt. There were 21,418 instalment arrangements in place to clear $50 million of debt. "Having to estimate annual income in advance is the most common reason why families do not receive the right amount during the year," the document said. "For many families, estimating yearly income is difficult to do with any accuracy. Under the current income estimation model, families can still be overpaid when their income increases unexpectedly. For example, something as simple as a promotion or starting a new job towards the end of the year could cancel out their Working for Families entitlement and leave them in debt." But the document said assessing people's income very regularly could mean a lot of changes in what people received. ADVERTISEMENT If someone was paid fortnightly, some months could have two paydays and some three. Someone who was paid every four weeks would occasionally be paid twice in one month. "Families would need to check in more often to report or confirm their income so that Inland Revenue can recalculate their payments. This would mean an increase in time spent interacting with Inland Revenue and its systems. This could also mean payments would vary every week or month, making it harder for families to budget and plan." The discussion document said the government's current thinking was that a quarterly assessment could strike the right balance between responsiveness, certainty and recipient effort. It was seeking feedback on the idea. The government also suggests a shift from calculating a recipient's Working for Families on the recipient's estimate of future income over the coming year to basing the calculation on past income they actually received. This would help to prevent people going into debt. It is also proposing to simplify the residence criteria for Working for Families and require both caregivers and children to be physically present in New Zealand to qualify. Review limited - advocate Susan St John, associate professor at the University of Auckland and Child Poverty Action Group spokesperson, said she thought the review was limited. ADVERTISEMENT "There are huge difficulties for self-employed in more regular assessment. For income that is not earned regularly it can cause volatility and add to the admin or compliance load. There are other ways — in Australia they hold a portion back until the end of the year." She said the review did not address the problems of Working for Families in a meaningful way. "They arise because the threshold is way too low and the rates of clawback way too high." She said the scheme was confusing with the different types of credits available, and the poorest 200,000 were excluded from the full package, missing out on about $5000 a year. Revenue Minister Simon Watts said the government knew that it could be distressing to have debt to Inland Revenue. "We are interested in what people think of the proposals." Another woman, Amy says she's still paying off the $12,000 in Working for Families debt she was landed with three years ago, amid a messy divorce. She and her husband were shareholders in a business and, she says, he incorrectly reported some of the business profit as income in her name. ADVERTISEMENT That prompted the government to think she had been overpaid credit, and she was landed with a bill. She now can only receive $172 a week in Working for Families credits for her three children because she is paying back the debt. She is a single parent also paying a mortgage.
Scoop
3 days ago
- Business
- Scoop
Couple Owes $20,000 Working For Families Debt ‘Through No Fault Of Our Own'
Article – RNZ 'Now they're taking $350 a fortnight out of our bank account .. we actually can't afford that,' says Phoenix Ruka., Money Correspondent Just a quarter of 'squared up' Working for Families recipients are getting the right amount. Phoenix Ruka says he and his wife owe about $18,000 to $20,000 in Working for Families debt, despite always doing their best to ensure that they supplied the correct details about their income and circumstances. 'We've always stayed up-to-date with my salary and what we received from them and updated my salary every time it went up and down,' Ruka said. 'What were receiving was what they assured us we were entitled to. But then we got a massive bill saying they had overpaid us.' He said his wife had been 'relentless' in trying to work out what had happened. It was discovered that a couple of years they had been underpaid, by many thousands of dollars, which they were reimbursed, but one year they were paid too much, which left them with the debt. 'I think the really frustrating part is that it's through no fault of our own. We owe a substantial amount of money. Now they're taking $350 a fortnight out of our bank account,' Ruka said. 'We've gone back and forth and shown them our expenses, that we actually can't afford the amount they're taking. We've shown them our bills, our mortgage – they told us that they can't keep taking money if we can't afford it but we can't.' He said there had been multiple times where the money that was being taken to repay the debt was all that was left in their bank account. It's an issue the government is attempting to tackle with proposed changes to the way that income is assessed for Working for Families. As part of the Budget, it was announced that the threshold at which entitlements start to abate was to be increased slightly, and the government would look at options to help avoid the issue of Working for Families debt. Inland Revenue's discussion document said 85 percent of Working for Families households received their payments weekly or fortnightly during the 2022 tax year, based on an income estimate. Only 15 percent were receiving their credits annual based on the family's actual income once income tax had been assessed. Those who were being paid weekly or fortnightly were subject to an end of year 'square up' process by Inland Revenue, the document noted, although they were expected to update IRD with any relevant changes during the year. In the 2022 year, only 24 percent of households receiving weekly or fortnightly payments and squared up by IRD had received the right amount of Working for Families credits. Those who were overpaid are left with a debt to repay. The document said debt was a particular problem for low- and middle-income families because it reduced their ability to meet their day to day costs in the future. 'Debt undermines the intent of the Working for Families scheme to support low to middle income families to meet basic needs and incentivise work.' The amount owed by Working for Families recipients has been steadily increasing over the years. The document noted that in June 2024, 56,800 accounted for $273.5 million of Working for Families debt. There were 21,418 instalment arrangements in place to clear $50 million of debt. 'Having to estimate annual income in advance is the most common reason why families do not receive the right amount during the year,' the document said. 'For many families, estimating yearly income is difficult to do with any accuracy. Under the current income estimation model, families can still be overpaid when their income increases unexpectedly. For example, something as simple as a promotion or starting a new job towards the end of the year could cancel out their Working for Families entitlement and leave them in debt.' But the document said assessing people's income very regularly could mean a lot of changes in what people received. If someone was paid fortnightly, some months could have two paydays and some three. Someone who was paid every four weeks would occasionally be paid twice in one month. 'Families would need to check in more often to report or confirm their income so that Inland Revenue can recalculate their payments. This would mean an increase in time spent interacting with Inland Revenue and its systems. This could also mean payments would vary every week or month, making it harder for families to budget and plan.' The discussion document said the government's current thinking was that a quarterly assessment could strike the right balance between responsiveness, certainty and recipient effort. It was seeking feedback on the idea. The government also suggests a shift from calculating a recipient's Working for Families on the recipient's estimate of future income over the coming year to basing the calculation on past income they actually received. This would help to prevent people going into debt. It is also proposing to simplify the residence criteria for Working for Families and require both caregivers and children to be physically present in New Zealand to qualify. Susan St John, associate professor at the University of Auckland and Child Poverty Action Group spokesperson, said she thought the review was limited. 'There are huge difficulties for self-employed in more regular assessment. For income that is not earned regularly it can cause volatility and add to the admin or compliance load. There are other ways – in Australia they hold a portion back until the end of the year.' She said the review did not address the problems of Working for Families in a meaningful way. 'They arise because the threshold is way too low and the rates of clawback way too high.' She said the scheme was confusing with the different types of credits available, and the poorest 200,000 were excluded from the full package, missing out on about $5000 a year. Revenue Minister Simon Watts said the government knew that it could be distressing to have debt to Inland Revenue. 'We are interested in what people think of the proposals.' Another woman, Amy says she's still paying off the $12,000 in Working for Families debt she was landed with three years ago, amid a messy divorce. She and her husband were shareholders in a business and, she says, he incorrectly reported some of the business profit as income in her name. That prompted the government to think she had been overpaid credit and she was landed with a bill. She now can only receive $172 a week in Working for Families credits for her three children because she is paying back the debt. She is a single parent also paying a mortgage.
Scoop
3 days ago
- Business
- Scoop
Couple Owes $20,000 Working For Families Debt 'Through No Fault Of Our Own'
, Money Correspondent Just a quarter of 'squared up' Working for Families recipients are getting the right amount. Phoenix Ruka says he and his wife owe about $18,000 to $20,000 in Working for Families debt, despite always doing their best to ensure that they supplied the correct details about their income and circumstances. "We've always stayed up-to-date with my salary and what we received from them and updated my salary every time it went up and down," Ruka said. "What were receiving was what they assured us we were entitled to. But then we got a massive bill saying they had overpaid us." He said his wife had been "relentless" in trying to work out what had happened. It was discovered that a couple of years they had been underpaid, by many thousands of dollars, which they were reimbursed, but one year they were paid too much, which left them with the debt. "I think the really frustrating part is that it's through no fault of our own. We owe a substantial amount of money. Now they're taking $350 a fortnight out of our bank account," Ruka said. "We've gone back and forth and shown them our expenses, that we actually can't afford the amount they're taking. We've shown them our bills, our mortgage - they told us that they can't keep taking money if we can't afford it but we can't." He said there had been multiple times where the money that was being taken to repay the debt was all that was left in their bank account. It's an issue the government is attempting to tackle with proposed changes to the way that income is assessed for Working for Families. As part of the Budget, it was announced that the threshold at which entitlements start to abate was to be increased slightly, and the government would look at options to help avoid the issue of Working for Families debt. Inland Revenue's discussion document said 85 percent of Working for Families households received their payments weekly or fortnightly during the 2022 tax year, based on an income estimate. Only 15 percent were receiving their credits annual based on the family's actual income once income tax had been assessed. Those who were being paid weekly or fortnightly were subject to an end of year "square up" process by Inland Revenue, the document noted, although they were expected to update IRD with any relevant changes during the year. In the 2022 year, only 24 percent of households receiving weekly or fortnightly payments and squared up by IRD had received the right amount of Working for Families credits. Those who were overpaid are left with a debt to repay. The document said debt was a particular problem for low- and middle-income families because it reduced their ability to meet their day to day costs in the future. "Debt undermines the intent of the Working for Families scheme to support low to middle income families to meet basic needs and incentivise work." The amount owed by Working for Families recipients has been steadily increasing over the years. The document noted that in June 2024, 56,800 accounted for $273.5 million of Working for Families debt. There were 21,418 instalment arrangements in place to clear $50 million of debt. "Having to estimate annual income in advance is the most common reason why families do not receive the right amount during the year," the document said. "For many families, estimating yearly income is difficult to do with any accuracy. Under the current income estimation model, families can still be overpaid when their income increases unexpectedly. For example, something as simple as a promotion or starting a new job towards the end of the year could cancel out their Working for Families entitlement and leave them in debt." But the document said assessing people's income very regularly could mean a lot of changes in what people received. If someone was paid fortnightly, some months could have two paydays and some three. Someone who was paid every four weeks would occasionally be paid twice in one month. "Families would need to check in more often to report or confirm their income so that Inland Revenue can recalculate their payments. This would mean an increase in time spent interacting with Inland Revenue and its systems. This could also mean payments would vary every week or month, making it harder for families to budget and plan." The discussion document said the government's current thinking was that a quarterly assessment could strike the right balance between responsiveness, certainty and recipient effort. It was seeking feedback on the idea. The government also suggests a shift from calculating a recipient's Working for Families on the recipient's estimate of future income over the coming year to basing the calculation on past income they actually received. This would help to prevent people going into debt. It is also proposing to simplify the residence criteria for Working for Families and require both caregivers and children to be physically present in New Zealand to qualify. Susan St John, associate professor at the University of Auckland and Child Poverty Action Group spokesperson, said she thought the review was limited. "There are huge difficulties for self-employed in more regular assessment. For income that is not earned regularly it can cause volatility and add to the admin or compliance load. There are other ways - in Australia they hold a portion back until the end of the year." She said the review did not address the problems of Working for Families in a meaningful way. "They arise because the threshold is way too low and the rates of clawback way too high." She said the scheme was confusing with the different types of credits available, and the poorest 200,000 were excluded from the full package, missing out on about $5000 a year. Revenue Minister Simon Watts said the government knew that it could be distressing to have debt to Inland Revenue. "We are interested in what people think of the proposals." Another woman, Amy says she's still paying off the $12,000 in Working for Families debt she was landed with three years ago, amid a messy divorce. She and her husband were shareholders in a business and, she says, he incorrectly reported some of the business profit as income in her name. That prompted the government to think she had been overpaid credit and she was landed with a bill. She now can only receive $172 a week in Working for Families credits for her three children because she is paying back the debt. She is a single parent also paying a mortgage.
Otago Daily Times
5 days ago
- Business
- Otago Daily Times
Child poverty not budging
The government is relying on growth in the economy to reduce stubbornly static child poverty numbers. Finance Minister Nicola Willis' view is ''the absolute best thing we can do to get children out of poverty is to support their parents into work and to better-paying jobs''. But even if that eventually turned out to be true, it does not help the thousands of children suffering now. Those still smarting from the government's surprise changes to the pay equity regime might well wonder what effect lifting the wages of many more low-paid women, and more quickly, might have had on the status of children of some working poor. For the last seven years governments have been required to report on progress towards child poverty targets and what difference the Budget might make. There are three measures - the proportion of children living in material hardship, those living in poor households before housing costs are considered, and those living in poor households after allowing for housing costs. In the 2023-24 year there was no change from the previous year to the measure of those living in poor housing after housing costs were accounted for, and no statistically significant change in the other two measures. While both housing measures were better than they were in 2018, material hardship, which had dipped to 12.5 % in 2022 from 13.3% in 2018, was back up to 13.4% last year. The child poverty report issued this month by Ms Willis says the failure to meet the targets for 2023-24 reflected in part the impact of high inflation at that time on the cost of living. An estimated 156,000 children are living in material hardship. The government says reducing child material hardship is a particular focus and a priority in its child and youth strategy, but it is hard to swallow those worthy words when the government's refresh to the strategy downgraded the importance of food security. It also removed the measure relating to house quality. It should not be forgotten either that the government, without any fanfare, watered down the previous government's 2023-24 target to reduce material hardship last year to 9%, raising it to 11%. There have been few crumbs in this year's Budget likely to shift the child poverty dial, with Treasury forecasts showing rates of child poverty will change little in the next few years. Giving 142,000 families an average $7 a week extra from Working for Families is not a game changer. Nor was last year's poorly planned and oversold FamilyBoost early childhood education policy which voters were told would give relief of up to $75 a week for families earning less than $180,000. The reality was few regularly received the full amount. Ms Willis may be hoping the tweaks to the system she will announce next month will raise confidence in the scheme, but questions remain about why this was not closely monitored from the outset and any necessary changes made well before now. The government says its focus is on changing the circumstances trapping people in poverty by providing them with opportunities to make changes and choices. But with high unemployment rates still biting, the opportunities for changes and choices are not obvious. In such circumstances, stepping up sanctions for those on jobseeker benefits seems mean-spirited, time-wasting, and pointless. Continuing funding for foodbanks for another 12 months has been welcomed, but as the Salvation Army points out, this alone does not address the ongoing demand for food security. There are also concerns housing commitments are insufficient and that changes to emergency housing criteria are resulting in more homeless people. The government has talked up its social investment approach which it describes as using data and evidence to allow earlier and more effective intervention, but it is hard to see the $275 million allocated for this will go very far. The government says it is still committed to the 2027-28 10-year targets for child poverty - only 5% of children in poor households before housing costs are included, and 10% once costs are included, and 6% in material hardship. However, so far its actions are more akin to commitment phobia.
