Targeted cost-of-living payments No target, lawyers say

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Policy

Voices from community groups question the target audience for cost of living payments to be rolled out starting this week

A payment of $116.67 will appear in the bank accounts of more than two million New Zealanders on Monday, the first of three payments that will see middle-income Kiwis receive a total of $350 to help cope with rising inflation and the cost of living.

But while the doubled pockets of around 42 per cent of the country should make the remaining winter months a little more palatable, advocates for community groups have questioned whether the money is being put to best use if it’s not going well. helping those at the bottom of the ladder. the battery.

The cost of living payments go to anyone over the age of 18 who earns less than $70,000 of pre-tax net income, as long as they are not currently receiving the winter energy payment – money that is automatically paid to anyone in receipt of a retirement pension, jobseeker’s aid, youth allowance, emergency benefit or war veteran’s pension.

These are exactly the sections of society that need the most help right now, says Aaron Hendry, Lifewise’s youth development officer, who worries about policy loopholes that ignore under-18s and Low-income Kiwis.

“If you were already in trouble, you’ll be in a lot more trouble than most people who get paid – and you’ve been kicked out,” he said. “It is extremely disappointing. Those people who benefit from it are the ones who really do it hard.

In addition to offering nothing more to recipients, Targeted Payments are only available to people over the age of 18.

Hendry said this age limit does not make sense in a society where young people can leave to live on their own and find work before that age.

“There are a lot of people we know who are living independently who may not be on a youth payment and can’t access it,” he said. “For whatever reason they may not have been able to stay at home, they worked and looked after themselves and now they have been excluded from this payment. Now, that doesn’t make much sense.

He thinks we should also aim to set a bigger target than a few payments to ease the pain of the rising cost of living, and wants to see a change in attitude around the level of poverty we find acceptable as a society. .

“I think we need to be a bit more ambitious,” he said. “These types of decisions are the result of political decisions we make around our priorities…we need to eradicate poverty rather than just manage it.

The payments cost the government a total of $814 million, which works out to about $27 a week for the 2.1 million Kiwis who meet the criteria.

That’s $350 per person, a figure that’s half the amount of winter energy payment a couple would receive during the colder months.

Revenue Minister David Parker said the payments deliberately targeted people who did not receive winter energy payments because cost-of-living adjustments to benefits and allowances, such as free transport for holders of community service cards, were already mitigating the effects of the rising cost of living on the low. – income group.

“Our reasoning is that the cost of living pressures – which we know affect everyone – are to some extent already addressed for the groups receiving the winter energy payment,” he said. he declares. “It is both through the payment of winter energy and the adjustment of the cost of living to benefits which, of course, compensates for increases in the cost of living.

He said the support was designed to target a group that currently does not have any such support, which does not necessarily mean that they are not struggling to make ends meet.

“As far as the people who get it, well, they don’t get the winter power payment and some people would say the cut off for the likes of [that] is unfair to them,” he said. “So we thought there was a need to help middle-income people who don’t get benefits, in addition to lowering petrol taxes and subsidizing public transport.”

Revenue Minister David Clark urged people to make sure the tax authorities have a bank account to send cost-of-living payments to on Monday. Photo: Lynn Grieveson

While the gas tax and road charge reductions have been extended into the new year in recognition of the cost of living in 2022, Parker said the cost of living payments will not be extended.

“It’s deliberately targeted and it’s also deliberately limited in duration,” he said. “Partly because we don’t want to fuel inflation in the economy: partly because we know the forecast for the end of the year sees inflation rates starting to come down.”

Brooke Stanley Pao, spokesperson for social inequality advocacy group Auckland Action Against Poverty, said those at the bottom were left out when the payments were announced with the 2022 budget.

On Thursday, she said the idea that the government did not want to “double” payments reflected a disconnect with reality.

“Politicians make decisions that don’t affect them, and are therefore disconnected from the repercussions of those decisions,” she said. “They are cushioned by the cost of living increases because they can afford these increases. Many other individuals and families in New Zealand cannot.

She said her group supports people who face a punitive and low trust attitude to Work and Income on a weekly basis, and that a change in attitude is needed to address growing issues of social inequality.

“We must seek to act from different values ​​and belief systems to ensure that our health, wellbeing and safety of the team of 5 million remains intact,” she said.

As the date for the first payment approaches, Inland Revenue is struggling to obtain the bank accounts of everyone who qualifies.

It has 90% of the account details it needs, with around 164,000 bank account details still overdue.

Parker said people had until the end of next year’s first financial quarter to claim any payments they missed if they were eligible at the time, but urged people to log in and download their contact details, or call Inland Revenue directly.

The department has had 700 people tasked with preparing the payments since they were announced in May, including 400 temporary workers hired specifically for the purpose.

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