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It's Not Just About Being Poor

Mon, 02 Sep 2002

It's Not Just About Being Poor

Lindsay Mitchell

While many New Zealanders are concerned about the role that welfare plays in the escalating social problems we face, few question the need to provide support for children. This is understandable and how it should be. They assume that the domestic purposes benefit is helping children, improving their living standards and outcomes. Is this the case?

A paper published in the Social Policy Journal of New Zealand, June 2002, focussed on whether the source of family income changed the picture for poor children, the majority of whom are being brought up on the DPB.

The report compared poor children whose family income was derived mainly from government transfer to those whose family income came mainly from the market. It found that, "There is considerable variation in the living standards of those below the poverty threshold, and (the results) suggest that poor children in families with government transfers as the main income source are a particularly vulnerable group."

Abstract; "Standard of living data show that poor children reliant on government transfers are more likely to be subject to restrictions in key items of consumption than are poor families with market income." Examples of key items are food, clothing, visits to the doctor or dentist, schoolbooks, school outings and involvement in sport.

One of the explanations for why this difference occurs is given as, "Families that are poor for a long time tend to be different to other families. Persistently poor families are much more likely than other families to have a caregiver suffering from depression, anxiety and other psychological problems, physical health problems, low cognitive skills, drug or alcohol abuse or other problems. These factors, taken in combination, reduce the likelihood of consistent and nurturing parenting."

The length of time spent on the DPB is steadily rising. Our research showed earlier this year that the average time spent on this benefit is now six and a half years. Many DPB beneficiaries also migrate to other benefits e.g. sickness benefit, which further lengthens their stay on welfare. Six or more years would warrant the description of being 'persistently poor.'

Another explanation for the worsened conditions for children in families whose main income was from government transfer was, "Receipt of welfare income is negatively associated with children's outcomes, even when level of income is controlled. This effect derives not so much from welfare receipt per se, but from parental characteristics that make some parents more prone than others to be on welfare (Mayer 2002)."

The findings of this report beg the question, wouldn't children fare better with a working parent than one reliant long-term on a benefit? If a market income is similar to that received on a benefit, yet it's source has a positive effect on children's outcomes we should be looking to get people off welfare and into employment.

What the government are intending to do is the opposite. They plan to remove work testing of the DPB and replace it with a requirement that the recipient attend a yearly interview to discuss their 'plans' for finding work. They will ignore the findings of this important paper as they have ignored the advice of treasury. Our prediction is that DPB numbers will increase, the time spent on it will continue to grow and more children will be persistently poor.

To understand what this means we conclude with an excerpt from the summary of the paper; "These results give a stark picture of ways in which poor children's activities and access to basic services are restricted because of cost. A particular threat to children's well-being arises from restrictions in health care due to cost. The consequences of such restrictions can carry substantial long-term risks for the health and well-being of children in poor families. The greater propensity for the caregivers of poor children reliant on government transfers to report that their income is inadequate to meet their needs forms just part of a multi-faceted portrait of limited well-being, and heightened vulnerability among these children."

Source; "Children in poor families: Does the source of family income change the picture?" - Social Policy Journal of New Zealand Issue 18 June 2002

Lindsay Mitchell - Petitioner for a Parliamentary review of the DPB

e-mail dandl.mitchell@clear.net.nz


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