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Labour blind to flaws in families welfare package

John Key MP
National Party Finance Spokesman

31 March 2005

Labour blind to flaws in ‘families’ welfare package

National Party Finance spokesman John Key says Steve Maharey has proven in Parliament today that Labour is “blind to the fundamental flaws” in its Working For Families package.

He is commenting on the inability of the Social Development Minister to explain why so many high-earning singles and childless couples are to be given the accommodation supplement in the so-called ‘families’ package.

“The Minister didn’t even know how bad Labour’s model is,” says Mr Key, referring to written Parliamentary questions answered by the Finance Minister last year.

“Those answers, which Mr Maharey should have known about, show that by April 2007 half of the people receiving the accommodation supplement will be single with no children. (PQ - 08943 2004 attached)

“So much for the ‘Working For Families’ slogan.

“The answers also show that 150 single people with no children who earn more than $40,000 a year will get the accommodation supplement, and they reveal that two single people and three couples earning as much as $80,000 a year will get the accommodation supplement.

“Hard-working middle and low income families will be asking why people with no children and earning up to $80,000 a year are eligible for this welfare top-up.”

Mr Key has also taken issue with claims that the working for families package will help move people from welfare to work.

“The facts don’t bear that out at all.

“Treasury says fewer than 2% of sole parents will move off benefits and into work, and there will be no net change for couple families as a result of the package. Even the Labour Department advised Cabinet that the package would reduce incentives to work for middle-income families,” says Mr Key.

Ends

Attached: PQ - 08943 (2004) - 2 pages.

Parliamentary Question 08943 (2004)

Sent: Tuesday, 24 August 2004 04:14 p.m.
To: John Key
Subject: 08943 (2004) Published - Finance - Corrected Reply

Question: What is the estimated number of persons who received the
accommodation supplement in 2000, the number who receive it currently, and the number who are expected to receive it in April 2007; broken down by family type, number of children, and gross income bands of $5,000?

Portfolio: Finance
Minister: Hon Dr Michael Cullen
Date Lodged:24/06/2004
Answer Text: (Below)


Departments do not hold suitable data to provide this information for 2000.

My officials failed to provide me with complete information for my consideration at the time of replying to written parliamentary questions 8943 to 8948.

I now submit the following additional information to be attached to the replies previously submitted for Parliamentary Questions 8943 - 8948.

1. The model used to produce these estimates uses a specially prepared dataset. The dataset for 2004 has not yet been prepared, therefore the most recent dataset – that for 2002/03 – has been used instead. This is the same dataset that is used for the estimates for 2007.

2. The entries in the <$5,000 column arise because MSD only records income for the period for which persons are paid a benefit of some sort, be it a primary benefit or a supplementary benefit. Thus those with recorded incomes of less than $5,000 are those who have been receiving a benefit for less than twelve months. Many persons who fall into the $5,000-$10,000 column also have been receiving benefits for less than twelve months.

3. The above analyses for 2007 includes only those eligible for AS under current rules. An estimated additional 21,600 persons will receive AS by 2007 as a result of W4F changes. It is not possible to split these persons into the required breakdowns. The indicative assessment of this breakdown by family type is:

With Children Single No Children Couples No Children Total
2006/07 14900 4900 1800 21600

As at June 03 Persons who receive Accommodation Supplement

< $5k $5k-$10k $10k-$15k $15k-$20k $20k-$25k $25k-$30k $30k-$35k $35k-$40k $40k-$45k $45k-$50k $50k-$55k $55k-$60k $60k-$80k Total
Single 3,013 69,631 48,651 6,366 1,909 439 223 76 54 37 12 2 130,412
Single & 1 child 1,361 191 27,986 9,961 7,073 524 257 107 28 24 8 47,520
Single & 2 children 1,038 46 122 20,502 7,793 637 214 134 54 23 11 30,574
Single & 3 children 413 12 54 8,479 2,771 203 80 31 13 7 5 12,068
Single & 4+ children 138 8 26 3,919 989 74 30 13 3 5,200
Couple 1,002 93 2,534 5,800 3,659 772 470 101 63 28 10 1 2 14,535
Couple & 1 child 1,365 90 100 2,427 1,644 520 295 178 94 63 17 6,794
Couple & 2 children 1,324 73 105 2,357 1,726 592 421 204 102 55 27 6,987
Couple & 3 children 615 27 61 1,306 952 317 193 115 58 31 6 3,682
Couple & 4+ children 385 21 26 1,117 694 231 149 62 40 20 8 2,754
Total 10,656 70,192 79,664 62,233 29,211 4,310 2,333 1,021 509 288 104 3 2 260,526

As at April 07 Persons who receive Accommodation Supplement

< $5k $5k-$10k $10k-$15k $15k-$20k $20k-$25k $25k-$30k $30k-$35k $35k-$40k $40k-$45k $45k-$50k $50k-$55k $55k-$60k $60k-$80k Total
Single 2,746 24,759 78,849 23,174 2,246 581 254 146 60 49 31 8 2 132,906
Single & 1 child 1,361 25 84 34,266 10,995 1,290 358 170 65 24 20 6 48,663
Single & 2 children 1,040 27 64 20,821 7,892 937 299 157 94 50 14 11 31,407
Single & 3 children 404 6 36 8,591 2,840 309 95 56 23 10 6 5 12,383
Single & 4+ children 132 5 14 3,982 998 117 37 22 9 3 5,320
Couple 1,010 52 2,338 5,795 3,640 819 720 172 81 55 20 7 3 14,710
Couple & 1 child 1,394 79 84 2,428 1,547 510 428 199 150 81 54 7 6,959
Couple & 2 children 1,351 65 86 2,339 1,646 551 500 318 148 87 43 22 7,157
Couple & 3 children 630 25 44 1,314 901 291 272 141 93 45 22 5 3,782
Couple & 4+ children 393 16 22 1,119 671 206 195 97 59 23 20 5 2,825
Total 10,462 25,058 81,621 103,829 33,375 5,610 3,159 1,477 782 426 230 78 5 266,111


Totals may differ from the sum of their components due to rounding.

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