Many low income households across Aotearoa are now living below the income floor, with increasingly fewer households able to cover the bare essentials, according to new research released today by Child Poverty Action Group (CPAG).

The research builds on modelling by the Welfare Expert Advisory Group (WEAG) and extends it to cover varying levels of income and expenses across 39 different household types over eight years, revealing that the vast majority remain in persistent and growing deficits.

These deficits mean incomes are failing to meet both core living costs and the costs needed to meaningfully participate in society, placing thousands of children at risk of entrenched hardship.

"This modelling shows that our society is seriously failing children who live in low-income households. Families continue to be locked in poverty and unable to break through the constraints of the income floor", said CPAG Research and Programmes Officer Dr Harry Yu Shi.

The project tracked single adults, couples and sole parents on income support or in low-wage work from 2018 to 2026. Despite periodic increases to benefits and wages, the research finds that income support and the minimum wage have not kept pace with rising living costs.

Key findings include:

• Minimum wage no longer guarantees adequacy: Couples with two children working 40 hours on minimum wage are already in deficit in 2025. By 2026, even a combined total of 60 hours of work will not be enough to lift them above the income floor.
• Sole parents facing severe shortfalls: Sole parents with three children in private rentals are $170 short each week of meeting basic costs, leaving them far below the income floor regardless of whether they receive Best Start support or not.
• Rising hardship over time: While incomes improved modestly between 2021 and 2024, the research shows the households we modelled are now universally worse off from 2025 onwards.
• Housing costs pushing families deeper into deficit: Couples on Jobseeker Support with two children and average rental costs are more than $300 per week short.
• Single adults not spared: Those on Jobseeker or Supported Living Payment are nearly $100 per week below the income floor needed for basic necessities.

"The evidence is clear: even working full time or combining wages with benefits is no longer enough to enable families to break free of the constraints of poverty," said Dr Harry Yu Shi.

"The income floor is rising and families are being pushed under it by increasing rents, food costs and stagnant supports. Without urgent action, more children will grow up locked out of the opportunities every New Zealander deserves."

The research also highlights that improvements achieved following the 2021 Wellbeing Budget have been reversed. All 39 households modelled are on a trajectory of worsening deficits by 2026, regardless of income type or household size.

CPAG is calling for immediate increases to core benefit rates, stronger indexing to living costs and policies to lift working incomes.

"We cannot accept a system where our children are unable to flourish because the powerful currents of our economy force families to live below the income floor," said CPAG Research and Programmes Officer Dr Harry Yu Shi.

The next stage of this research projects aims to use Integrated Data Infrastructure (IDI) to establish how many real households fit into each category, and therefore, the true scale of this issue.

Notes:

- Based on the Welfare Expert Advisory Group’s 2019 principles, the income floor refers to the minimum level of income needed for individuals and families to meet their basic needs and participate meaningfully in their communities. This level must also be maintained over time to keep pace with rising costs.

- Child Poverty Action Group (CPAG) is launching a campaign to raise awareness of the 'income floor' - the minimum income needed to live and belong - and how many households in Aotearoa are now falling below it.

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