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Research Examines Child Poverty in New Zealand

Research Examines Child Poverty in New Zealand
Weekly Column by Dr Muriel Newman

In the briefing papers to the incoming government, the Ministry of Social Development has identified child poverty as a major issue facing New Zealand.

There are approximately 900,000 dependent children in New Zealand. Of those almost one in three live in benefit-led households. More than 60 per cent – 185,000 - live with a sole parent receiving the Domestic Purposes Benefit. Most of these children live in relative poverty.

Two important research papers recently produced by the Knowledge Group of the Ministry of Social Development shed light on the impact of persistent low incomes on children. They should not be ignored by government.

The first piece of research, “The Prevalence and Persistence of Low Income Among New Zealand Children: Indicative Measures from Benefit Dynamic Data”, followed a cohort of children for seven years. The results found that more than half of the children born in the mid to late 1990s may have been exposed to the benefit system. At least a fifth of the 59,000 children born in 1993 spent five or more of their first seven years of life in benefit-led families. One in twenty spent the whole seven years in such families.

Low parental income is associated with poorer outcomes and worse life chances for children. These include higher mortality rates, lower cognitive development and poorer future employment prospects. On a daily basis children in benefit-led families may lack basic items that are key to their well-being and development - such as fresh fruit and vegetables, visits to the doctor or schoolbooks.

Factors that increased the risk of a long duration, once a child had come into contact with the benefit system, included being in contact with it since birth, living with a sole caregiver at first contact, and first appearing with a primary beneficiary who is female, Maori, aged under 20, or in receipt of the Domestic Purposes Benefit.

Sole parenthood was identified as a key risk factor for children.

The report warned that if the government could not support families to make improvements to their income position, then the ability of a large minority of the current generation of children to reach their potential may be compromised.

The second paper, “Children in Poor Families: Does the Source of Family Income Change the Picture?” examined the living standards of children in families below the poverty threshold in order to determine whether the source of that income – state benefits or wages - made a difference.

The findings showed that poor children reliant on parents who worked fared better than poor children whose parents were on welfare.

Poor children in families on welfare were more likely to be sole parent families, to have a principal income earner who was young, had no occupation or formal qualifications, was Maori or Pacific, and lived in a rented dwelling. Caregivers were more likely to suffer from depression, anxiety or other psychological problems, physical health problems, low cognitive skills, drug or alcohol abuse. They were less likely to provide consistent, nurturing parenting.

The report concluded that children in poor families reliant on welfare rather than work have lower living standards and are at far greater risk of negative outcomes and other disadvantages. In this context, the Domestic Purposes Benefit is seen as a significant risk factor for children.

In light of the findings of this and other New Zealand research, it is clear that the best way to help children to achieve their potential in life is to make sure that their parents are in the workforce. Having effective programmes to help families move from welfare to work should be a national priority. That is why the government’s removal of work-testing of the Domestic Purposes Benefit is such a mistake.

Work-testing has proved to be very effective in supporting people move from welfare into work. Treasury strongly advised against its removal, estimating that removing work testing will increase numbers on the Domestic Purposes Benefit by over a thousand a year, at a cost of some $18 million.

In light of that advice, as well as the warnings encompassed in the Ministry of Social Development’s research and briefing paper, abolishing work testing of the Domestic Purposes Benefit is a move that will put increasing numbers of New Zealand children at risk of poverty, disadvantage and poor life outcomes. This government has no mandate to introduce policies that will knowingly damage children.


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