Source: Radio New Zealand
Benefit rates are set to rise on 1 April. RNZ / Quin Tauetau
Benefit rates are set to rise on 1 April, but there are concerns that they won’t be enough to keep up with the rapidly rising cost of living.
JobSeeker for a single person over 25 will increase from $361.32 to $372.55 a week after tax.
Sole parent support lifts from $505.80 to $521.52.
Supported living for a couple with children increases from $734.12 to $756.94.
NZ Super increases from $1076 for a single person living alone per fortnight to $1110.30.
Benefits are adjusted based on the consumer price index (CPI), which lifted 3.11 percent last year.
NZ Super and Veteran’s Pension rates are adjusted based on changes in net average wages and the CPI.
Isaac Gunson, spokesperson for Child Poverty Action Group, said the increase would only cover the inflation that happened last year.
“Not the specific inflation around food, electricity, other big ticket essential items that families can’t go without, and yet those have all been rising higher than average inflation.”
He said any additional support from the government to help with the current crisis would need to take into consideration the pressures households had already been feeling.
Cost of living pressure had been a problem for many households for years, he said, and things such as food were frequently rising faster in price than other goods.
“It’s a big problem to calculate benefit rates by the average inflation because so many critical essentials that families and especially children need to grow up and live long, healthy lives are the things that are inflating even faster.
“We have called for benefit rates to be tied to wage growth to even out the picture of what sort of support that people need. But even then, bearing in mind that in the last couple of years or so, even wage growth has been quite low.
“There’s a lot of work needed from the government to lift wage growth, to keep families in a position where they’re not having to make cuts at home. And then once wage growth is in a strong place, to be able to index benefit increases to that.”
He said many families’ savings had been eroded over recent years, so a lot of households did not have a buffer to fall back on.
Green Party spokesperson Ricardo Menendez March said benefit levels were not keeping up with the increasing cost of rent, petrol and many food items like vegetables or mince.
“Benefit indexation changes are automatic and do not make up for the fact families are already behind on essential costs.
“Every time there is a crisis people already experiencing poverty disproportionately pay the price … the government needs to protect people experiencing hardship from the current fuel and cost of living crisis by lifting core benefit levels in this budget.”
Infometrics chief forecaster Gareth Kiernna said it was the way the system was set up.
“There’s always going to be a lag – if inflation is running quite hot and it’s stuff that people can’t avoid buying it’s going to cause problems.”
A spokesperson for Finance Minister Nicola Willis said she acknowledged increasing pressure on household budgets and said government was exploring options to provide support to those most affected who had no way of avoiding increasing fuel costs, but did not have the power to mitigate all the consequences of a international conflict.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
