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Low Income Leads To Poverty Trap

Incorporating Social Services of the: Anglican Church, Baptist Church, Catholic Church, Methodist Church, Presbyterian Church, The Salvation Army

3rd floor, Anglican Centre, 18 Eccleston Hill, PO Box 12 090, Wellington. Phone: (04) 473-2627, Fax: (04) 473-2624

MEDIA RELEASE

Embargoed until 6 AM Monday, 16 December 2002

Low Income Leads To Poverty Trap

Poverty is trapping many people in a downward spiral of debt, according to a report released today by the New Zealand Council of Christian Social Services.

The latest results from the Poverty Indicator Report show that many of the people using foodbank services are in debt. At some participating foodbanks, debt is reported by up to 90% of the applicants. Owing money to Work and Income is the most common debt reported, although a significant proportion of applicants are in arrears on utility or electricity bills.

According to Campbell Roberts, NZCCSS spokesperson, people on low incomes can become trapped in debt for a number of reasons: “Some of the applicants at foodbanks have such low weekly incomes they are unable to meet their most basic needs. Others experience a one-off shock and their income is too low to recover from it.”

The report shows that the average weekly household income of people presenting at the foodbanks ranges from $184 to $300, compared to the New Zealand average of $810 a week.

“This level of income means that once housing and basic food costs are paid for, many families have nothing left to spend on basic necessities such as clothing, transport, medical care and education” comments Roberts. “And many of those worst affected by poverty are children. Between 37% and 60% of people helped by the foodbanks this quarter were children.”

For many of these families, surviving on a low income is made more difficult by the large proportion of their income that is spent on housing. “We have seen the positive difference that income-related rents make in the lives of state housing tenants”, said Campbell Roberts. “However, most foodbank clients are in the private rental market. And as the foodbank statistics show, many of these people are on very low incomes, and frequently in debt. “

The Ministry of Social Development (MSD) recently reported that living standards tend to be compromised when low-income people spend over 30% of their income on housing costs1.

However, the Poverty Indicator Report results show that not only do many foodbank applicants spend more than 30% of their income on housing, but that many spend more than 50%. At one inner-city foodbank, 73% of the respondents reported that housing costs consumed more than half of their income. At four of the six other foodbanks, this figure ranged from 45% - 56%.

Per Campbell Roberts: “These figures are alarming. Communities, social service agencies and the government should be commended for actions already taken to reduce poverty. But we urgently need to do more.”

“The foodbank research shows that to address poverty in New Zealand, adequate incomes, affordable housing and equitable measures to address debt are needed. These should be immediate priorities for this government and for all others concerned with New Zealand’s future.”

- ends -

1 The Ministry of Social Development, New Zealand: Living Standards 2000, p.129.

KEY CONTACTS

KEY RESULTS

The following pages summarise the key results by agency. For copies of the full PIP report please contact Joanne Gomez at NZCCSS ph (04) 473 2627 or email:admin@nzccss.org.nz

If you want further PIP information for your region please contact Andrew Green at NZCCSS ph (04) 473 2627.

INFORMATION ABOUT NZCCSS and THE PIP PROJECT

The New Zealand Council of Christian Social Services (NZCCSS) represents the social services of the Anglican, Baptist, Catholic and Presbyterian Churches as well as the Methodist Church and the Salvation Army. Collectively, our members have around 550 social service delivery sites across the country.

The Poverty Indicator Project has been running in this format since the beginning of 2001. Six previous quarterly reports have been produced.

The Project focuses on key results about the housing, income, employment and debt circumstance of clients who have gone to seven foodbanks - one each in Invercargill, Dunedin, Christchurch, Wellington, Palmerston North, Hamilton, and Manukau City.

Local foodbank contacts are available from Andrew Green at NZCCSS (04) 473 2627.

Note that this is only an indication of poverty in two ways:

- it only measures result from a small sub-set of the total number of foodbanks in NZ (approx. 380); and - those coming to foodbanks are just the tip of the iceberg in terms of those experiencing some form of poverty. They are the ones who have the courage and/or are desperate enough to ask for food - usually after exhausting or being refused other forms of help.

For further media comment For technical/data information

Campbell Roberts Convenor of NZCCSS Housing and Poverty Policy Group Mobile: 0274 506 944 Work: 03 377-0799 Home: 03 382-1522 Email: campbell_roberts@nzf.salvationarmy.org Paula Skilling NZCCSS Executive Off icer Work: 04 473 2627 E-mail: paula.skilling@nzccss.co.nz

Incorporating Social Services of the: Anglican Church, Baptist Church, Catholic Church, Methodist Church, Presbyterian Church, The Salvation Army

Key Statistics

A selection of 3rd Quarter 2002 Poverty Indicator Project Results

Southland

Foodbank

Presbyterian

Support

Otago

Christchurch

City Mission

Wellington

Downtown

Community

Ministry

Palmerston

North

Methodist

Mission

Hamilton

Combined

Christian

Foodbank

Manukau

Salvation

Army

Avg. number of Applicants Per month 42 156 265 62 100 153 185

% of Pacific Island respondents 4% 4% 3% 8% 3% 3% 39%

% of Maori respondents 17% 17% 25% 35% 48% 56% 41%

% of respondents who are female 68% 56% 57% 50% 62% 62% 71%

% of respondents who are sole parents 50% 28% 37% 8% 40% 47% 45%

% of respondents who are single 23% 39% 34% 67% 27% 18% 16%

% of respondent households with children 71% 46% 62% 30% 59% 58% 82%

Average Weekly Household Net Income $300 $274 $276 $184 $267 $283 $280

Median Weekly Disposable Income (Income less Housing

costs) $186 $157 $140 $66 $145 $160 $125

% respondent households that receive income solely from

benefits 79% 76% 86% 75% 76% 87% 81%

Median housing cost (all housing types) $113 $110 $123 $105 $120 $150 $150

% of respondents spending more than half of their income

on housing 14% 29% 45% 73% 45% 49% 56%

% of households that receive only wage income 9% 8% 5% 16% 14% 12% 10%

% of applicants in debt 48% 75% 87% 64% 90% 14% 55%

page 4 of 4

Incorporating Social Services of the: Anglican Church, Baptist Church, Catholic Church, Methodist Church, Presbyterian Church, The Salvation Army

Quarterly and Annual Change

Comparison of PIP figures from 3rd Quarter 2002 with 2nd Quarter 2002 and 3rd Quarter 2001 figures. Note that negative values

indicate a decrease over time

Southland

Foodbank

Presbyterian

Support

Otago

Christchurch

City Mission

Wellington

Downtown

Community

Ministry

Palmerston

North

Methodist

Mission

Hamilton

Combined

Christian

Foodbank

Manukau

Salvation

Army

Qtr

&

Yr

&

Qtr

&

Yr

&

Qtr

&

Yr

&

Qtr

&

Yr

&

Qtr

&

Yr

&

Qtr

&

Yr

&

Qtr

&

Yr

&

Avg. number of Applicants Per month 7 -6 14 33 33 NR -8 -2 10 -14 2 -27 60 -48

% of Pacific respondents NR 0% 2% 1% 1% -0% 0% 2% -1% -1% 0% 3% 1% 11%

% of Maori respondents -3% -5% -1% -0% 7% -7% 5% 5% 8% 6% -2% -1% -4% -16%

% of respondents who are female -3% -7% 1% -1% -6% -5% 11% 10% 1% -2% -4% -9% -3% -8%

% of respondents who are sole parents -4% 0% -1% 0% 5% 3% -7% -8% 4% -10% 9% 7% -8% 6%

% of respondents who are single 5% 6% 1% 4% -3% 4% 4% -0% -0% 9% -2% 1% 6% 6%

% of respondent households with children -6% -3% -0% -2% 1% -6% 0% -2% 1% -9% -3% -6% -5% -3%

Average Weekly Household Net Income $9 -$17 -$18 -$29 -$36 $6 -$5 $32 -$4 -$47 -$20 $9 -$17 -$18

Median Weekly Disposable Income (Income less Housing

Costs) -$15 -$10 $4 $14 -$15 -$4 -$24 -$43 -$5 -$14 $23 $25 -$10 -$22

% respondent households that receive income solely

from benefits -1% -2% -3% -2% 5% 2% -6% -7% -7% -11% 0% -2% 1% -6%

Median housing cost (all housing types) $3 $3 $0 -$10 -$7 -$2 $9 $5 $0 -$10 $30 $20 $25 -$20

% of respondents spending more than half of their

income on housing 10% -9% -1% -7% 2% -4% 15% 28% 7% 2% 3% 4% 7% -4%

% of households that receive only wage income 3% -7% 2% -5% 2% -1% 2% 8% 3% 8% 1% 1% 2% 1%

% of applicants in debt -8% -17% 5% -2% 2% -1% 9% 11% 7% -4% -3% -17% -5% -15%


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