Latest news with #WorkingforFamilies
NZ Herald
a day ago
- Business
- NZ Herald
Proposed Working for Families changes may leave some worse off, FinCap warns
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, Howard 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.' Howard 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.' Howard 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. – RNZ
Otago Daily Times
a day ago
- Business
- Otago Daily Times
Will changes to Working for Families leave people worse off?
By Susan Edmunds of RNZ 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.
Otago Daily Times
a day ago
- Business
- Otago Daily Times
Will Working for Families changes leave people worse off?
By Susan Edmunds of RNZ 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.
Scoop
14-07-2025
- Politics
- Scoop
The Green Party's Universal Basic Illusion
The Green Party of Aotearoa New Zealand, long considered the progressive conscience of Parliament, has proposed an Income Guarantee, a universal, unconditional payment that would replace or simplify several parts of the welfare system. Framed as a liberating policy to reduce poverty, support unpaid labour, and prepare for a future where work may be scarcer, it has garnered enthusiastic support among progressives. But this proposal is not the radical solution it pretends to be. Instead, it reflects a greenwashed attempt to stabilise capitalism by offering just enough relief to avoid revolt. Far from challenging the structural roots of inequality, private property, wage labour, and capitalist accumulation, the Green Party's UBI functions as a sedative, dulling the sharp edges of exploitation while entrenching the system that causes it. The Green Party's UBI is a reformist containment strategy, not a pathway to liberation. Its implementation would cushion the worst aspects of capitalist life, but in doing so, it would pacify resistance, entrench private ownership, and ultimately protect the interests of capital. What the Greens Propose In 2023, the Green Party unveiled a rebranded version of UBI called the Income Guarantee. This scheme offers: A weekly payment of at least NZD $385 to all adults not in paid work, including students and carers. Higher rates for single parents and families with children. A restructuring of existing welfare benefits, replacing Jobseeker, Sole Parent Support, and Working for Families with a unified baseline payment. A new agency (replacing ACC) to guarantee 80% of minimum wage for those unable to work due to illness or disability. No work obligations, sanctions, or means-testing for this baseline. The Greens frame this as a way to value unpaid work, decouple survival from employment, and support dignity in a time of rising precarity. They also claim that it simplifies bureaucracy and builds trust in people to use the payment in ways that work for their lives. But while these ideas may seem empowering on paper, they carry deep contradictions, particularly when implemented within a capitalist framework. Reforming the System That Creates Poverty The first and most glaring issue with the Greens' Income Guarantee is that it leaves intact the very system that causes poverty and precarity in the first place. People are not poor because there is no universal income; they are poor because the means of production, land, housing, food, energy, are privately owned and controlled by a small class of capitalists. By funnelling a state stipend into a market dominated by landlords, bosses, and corporate monopolies, the Greens' UBI model subsidises capital, not challenges it. The landlord still sets the rent. The supermarket still sets the price of bread. The corporation still determines wages and hours. A 'universal income' becomes a universal transfer of public money to private pockets. This is not wealth redistribution, it's redistribution of dependency. The Greens imagine that by putting cash in your pocket, they are empowering you. But as long as that cash has to pass through the hands of property owners and profiteers, it simply recirculates back into the capitalist machine. Flat Payments in an Unequal World The Green Party's rhetoric of 'universality' masks a dangerous flattening of difference. By giving the same baseline income to all regardless of need, the policy shifts away from needs-based welfare to a market-mediated minimalism. This sounds fair on the surface, but it has regressive implications. A wealthy investor and a single parent receive the same base rate. Meanwhile, tailored supports for disability, illness, or chronic hardship are pared back, replaced with a one-size-fits-all payment that ignores the complexity of human need. While the Greens claim that specialised supports would still exist, the logic of simplification, driven by administrative efficiency and cost, risks future erosion of more expensive targeted benefits. This is not an idle concern. Across the world, UBI experiments have been used to justify welfare cutbacks, particularly under conservative governments that follow. In the long run, a flat payment becomes an excuse to individualise poverty, treating everyone the same while leaving structural inequalities untouched. UBI as Austerity in Disguise UBI can become a tool of austerity, not generosity. By packaging welfare reform as 'universal empowerment,' the state absolves itself of responsibility for meeting complex needs. It shifts risk back onto the individual giving them a cash payment, but removing the broader safety net that once protected people from market volatility. In practice, this leads to privatised hardship - disabled people navigating inaccessible housing markets on a flat income; sole parents forced to stretch meagre funds across rent, food, transport, and children's needs; sick workers unable to afford care once the specialised benefits disappear. UBI may be universal, but its effects are not equal. It entrenches the neoliberal logic that you are responsible for surviving the system, even as the system remains rigged against you. The Work Fetish in Reverse A key selling point of the Green UBI is that it allows people to work less and to study, care for whanāu, volunteer, create art, or simply rest. This is undeniably attractive. For many, the dream of decoupling survival from employment is liberatory. However, UBI doesn't abolish work, it just reorganises who gets to do less of it. The means of production still belong to someone else. People may reduce hours or leave exploitative jobs but they still must buy back access to life from those who own it. Without seizing control of land, housing, food systems, and workplaces, UBI only offers a slower treadmill, not a way off. True liberation from work requires not just the absence of compulsion, but the presence of collective power to shape what, how, and why we produce. Under capitalism, UBI is not freedom from work it is still just freedom to consume what others profit from. Automation and the Myth of Post-Work Capitalism Another justification for UBI is the coming wave of automation. As jobs are replaced by AI and machines, we are told, we need a universal income to ensure people aren't left behind. This argument is both outdated and naïve. Automation is not new it has always accompanied capitalism. And rather than freeing us from labour, it has consistently resulted in: Job displacement for the many, Wealth concentration for the few, And a race to the bottom for those still working. Without changing the ownership of technology and the surplus it generates, automation becomes a weapon against workers, not a liberation. UBI does not challenge this, it merely proposes a bribe to stay quiet while the rich get richer from robotic productivity. If we want automation to free us, we must demand common ownership of its fruits, not a state-managed allowance. Depoliticising the Class Struggle UBI has a profoundly depoliticising function. By providing everyone a basic income, it suggests that class conflict can be solved through technocratic redistribution, rather than collective struggle. It individualises economic survival and replaces mutual aid with state-administered charity. The Greens often present this as 'trusting people.' But in truth, it is a move away from politics altogether, away from strikes, occupations, assemblies, and direct action. It encourages people to become passive consumers of state policy rather than active agents of transformation. This is no accident. UBI fits comfortably within the liberal logic of non-confrontational progressivism - small gains, managed well, with no need to question who owns what or why. But anarcho-communists know that liberation is not granted it is seized. The abolition of wage labour, rent, and bosses does not come from a Treasury paper. It comes from resistance, solidarity, and revolt. The Green Fetish for Policy Without Revolution Ultimately, the Green Party's UBI is a reflection of their broader political project - a capitalism with a conscience. Their aim is to regulate, reform, and humanise the existing system not to overturn it. This is the great tragedy of Green politics: it mobilises the language of justice to protect the architecture of oppression. They speak of liberation while fearing confrontation. They dream of balance sheets, not barricades. The Income Guarantee is not a step toward socialism. It is a safety valve for capitalism, designed to prevent breakdown by making survival just bearable enough to forestall uprising. As long as the Greens seek legitimacy in Parliament, they will remain managers of compromise, not agents of emancipation. Toward a Real Alternative Anarcho-communists do not oppose the idea of everyone having their needs met. But we reject the idea that this must come in the form of a wage or income. We do not want better access to markets we want a world without them. Imagine a society where housing is free because it is collectively owned. Where food is grown and shared in community gardens, not bought. Where care work is respected and supported through mutual aid, not commodified. Where education, transport, and health are decommodified. Where people work not for profit, but for one another. This is not utopia. It exists in fragments already in marae, solidarity kitchens, workers' co-ops, and mutual aid networks. These are the embryos of a post-capitalist future. We don't need a basic income. We need basic expropriation. We need the end of property, not its pacification. No Wages, No Compromise The Green Party's UBI plan, however well-intentioned, is not a solution to poverty. It is a reformist illusion, an elegant attempt to stabilise a decaying system without addressing the violence at its core. It replaces welfare with technocracy, struggle with dependence, and solidarity with state charity. We say: No wages. No landlords. No bosses. No income guarantees only freedom from all need for income at all. We do not ask for a universal basic income. We demand a universal reclaiming of life itself.
Newsroom
05-06-2025
- Business
- Newsroom
The young need state support just as much as the old
In a recent column in the NZ Herald, Mathew Hooton said that if superannuation can't be cut, then wage subsidies should be. As 'welfare costs are exploding' and there is no political will to carve 20 percent off the universal pension, he continued, we must stop providing families with child-related tax credits and accommodation assistance, which he describes as 'wage subsidies'. While this view may resonate with some, all developed countries have variants on state policies like Working for Families to support children, and a version of New Zealand Superannuation to support the old. Typically and confusingly it is often argued that Working for Families is either 'corporate welfare' (letting businesses get away with not paying workers enough for their families to live on), or 'communism by stealth' that puts 'the whole population on welfare'. By similar logic it could be argued that NZ Super puts everyone on welfare at 65 or is a form of corporate welfare because wages should be high enough so people can save for a pension for themselves. Mid-last century, in a world long gone, wages were set by arbitration to ensure that one full-time male breadwinner earned enough to support a 'typical' family with a wife at home, and several children. Even so, tax breaks and a family benefit for children were also necessary. In the 21st century we have very different family structures including two-earner families. It is ludicrous to expect employers to meet the needs of both low-income adults and their children. For example, a very low-wage worker with four children currently receives an extra $610 per week from Working for Families. If cut completely, the net wage would have to rise by around $32,000 a year to make up for it, by Hooton's logic. The increase in the gross wage rate would cripple employers, be too much for workers without children, and not enough for larger families. There is the argument that by wiping Working for Families, the money saved be given back in tax relief to workers. That's pie-in-the-sky thinking. If families were to be compensated, it would require a complex package of abating tax credits. Oh, but isn't that that what Working for Families currently is? It all becomes so circular. One million superannuitants are collectively paid $20b after tax each year. Around one million children are given just $3.3b in Working for Families each year. You read that right. Each year around one million superannuitants are paid around six times more than one million children through Working for Families. But it is true that Working for Families is badly designed and does not meet the main goal of child poverty prevention. It doesn't reward paid work, as it is intended to. It is in desperate need of reform. It's often said that Working for Families is all Labour's fault, but it did not magically come into being fully formed under the Helen Clark Government in 2004. The universal weekly family benefit and tax breaks for families in the 1950s evolved by the 70s and 80s to become a complex mix of family benefit and different family tax credits. In 1991 the National Party folded the universal family benefit into the targeted tax credits to become one weekly targeted payment per child called Family Support. There were further changes under National in the mid-1990s, and rewarding paid work became elevated as a fundamental principle. All that the Clark government did in 2004 was to change the name to Working for Families, then build on and expand the existing complex structure, with even more emphasis on paid work as a criterion. Then, the Ardern government introduced an additional significant payment, called Best Start, for children under three years old, universal for the first year. As a policy, Working for Families is a mess. In contrast NZ Super is a simple, unconditional universal payment indexed to wages. It is easy to access and, until the housing crisis, has been enough to prevent poverty in old age. It is a basic income floor that does not disincentivise paid work. It has a very gentle income test though the tax system, so that the very highest income earners still get around three quarters of a pension paid when there is no additional income. The extra assistance for families to meet the basic income needs of their children is a very different story. Working for Families is tightly targeted and assists only children of low- and middle-income parents. Moreover, the full payment is conditional on parents having paid work and receiving no core benefit or part benefit. These conditions result in 200,000 children in the worst-off families being excluded from around $5000 per year, or more for larger families. With this division between deserving and undeserving children it's no wonder child poverty is so intractable. Working for Families payments are not annually indexed and are increased only when cumulative inflation exceeds 5 percent. There is no wage link as for NZ Super. Furthermore, payments are subject to a draconian clawback equivalent to an extra tax of 27 percent from a very low base of joint parental income. That threshold will be lifted marginally next year to $44,900, but to pay for it, the rate of abatement rises from 27 percent to 27.5 percent and Best Start becomes income-tested. This very 'tight targeting' ensures child poverty persists for many families in paid work. The overlap of tax, Working for Families clawbacks, student loan repayments and loss of accommodation assistance, and now Best Start clawbacks, confirms for too many, that extra work effort does not lift them out of poverty. Children are invisible: that is the problem. Fundamentally we need to understand that low-income wages, benefits, and paid parental leave are for the income needs of adults, but children also have income needs. I would argue that rather than take more from children we take more from the top end of NZ Super through the tax system and direct the revenue for fixing not just Working for Families but also the other failing welfare measures such as the accommodation supplement, benefits and disability support. We do want to grow the economy but should not be done at the expense of the wellbeing of both our current and future workforce.
