25 May 2000 Media Statement

Improved access to Special Benefit and childcare

Access to the Special Benefit will be improved and more hours of subsidised childcare available following the Budget next month, Social Services and Employment Minister Steve Maharey announced today.

The announcements were made as part of the Government’s initial response to benefit advocacy groups who are working with the Department of Work and Income to improve its responsiveness and the way it deals with those on low incomes.

"The Government is actively engaged in ensuring that New Zealanders have the security they need and the opportunity to participate in their communities and the economy.”

"Budget 2000 will improve the Special Benefit programme to assist those most in need, and increase the hours for Childcare and Out of School Care (OSCAR) subsidies for those wanting to be in work or training," said Mr Maharey.

Improving Access to Special Benefit

Special Benefit is a hardship allowance based on the difference between a beneficiary’s income and their essential commitments. However recipients are currently expected to meet the first $5 a week of the gap between their income and their commitments.

This standard $5 deduction from Special Benefit will be stopped from 1 July 2000.

“For those on low incomes, every dollar counts. This will put that $5 back in the pockets of those who most need it. This is a modest but positive improvement, and the beginning of a more responsive approach,” Mr Maharey said.

Mr Maharey said that as a result of the change, the weekly Special Benefit for most of the 11,000 Special Benefit recipients would be increased, and an estimated 10% or 1,100 new recipients will also now qualify for the Special Benefit.

The standard deduction was introduced in the past primarily as a cost saving measure and advocacy groups have long argued that it is unjustifiable and reduces the recipient’s entitlement.
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Mr Maharey said the estimated cost of the change would be $11.33 million over the next four years. In addition, the Government is investigating debt relief measures for those on benefits, such as a cap on weekly debt repayments.

Childcare – Out of School Care

Helping parents, especially sole parents, get off the benefit and into training or the workforce is some of the most valuable assistance that Governments can give.

“Many of those getting benefits want to work, can work and will work if only they are given the chance and opportunity. Help with childcare while they are in training or work is really valuable.

"Budget 2000 will from 1 February 2001 increase the maximum number of hours that can be claimed for both the childcare and Out of School Care (OSCAR) subsidies from 30 hours a week to 37 hours a week," Mr Maharey said.

In the case of the OSCAR subsidy, the increase will apply in the school holiday period. The maximum number of hours will remain at 20 per week during the school term.

“The present 30 hour maximum childcare subsidy is insufficient in some cases. For example, a parent in full-time employment or training is likely to require approximately 45 hours a week childcare, including travelling time.

“This initiative increases assistance to a maximum of 37 hours a week and will make a significant contribution to parents, who are considering taking opportunities for full-time employment,” Mr Maharey said.

He said the initiative was funded for next year while a review of the effectiveness of the subsidies was carried out.

Mr Maharey said he has also stopped the Child Disability Allowance being taken into account as income when eligibility for childcare subsidy is being assessed. The change will cost $68,000 annually.

Child Disability Allowance is paid to the caregiver of a child with a serious disability.

“With the special benefit initiative the Government is providing increased security to those in greatest need, while the increased childcare assistance will improve opportunities for parents seeking to move into full-time employment,” said Mr Maharey.
ENDS

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