Social Issues – Where is the support for benefit-dependent households? – CPAG

Child Poverty Action Group (CPAG) is calling for an increase to the Winter Energy Payment (WEP) to help offset the current surge in an already desperate cost of living crisis for families living on core benefits.

Minister Nicola Willis announced today that from April, 143,000 low-to-middle income families with working parents will receive $50 per week through the In-Work Tax Credit (IWTC).

CPAG spokesperson Isaac Gunson says while today’s announcement will alleviate some pressure in working families, there’s nothing for families relying on core benefits.

“Energy crises affect benefit-dependent families too. Where is their support?”

“Close to a quarter of a million children live in households receiving a core benefit. The idea that no additional support will be made available to that many tamariki is outrageous.”

“Christopher Luxon and Nicola Willis stood before the New Zealand public today and pointed to the automatic 3.1% inflation adjustment to core benefits on April 1 as the support they’re offering to benefit-dependent households. In the last three weeks, the cost of 91 petrol alone has climbed nearly 40%, and diesel by more than 80%.”

“Our Income Floor research clearly shows many of those incomes are already woefully inadequate to cover even the bare essentials, in a year where the cost of those essentials, like electricity, meat and poultry, and dairy products, rose faster than inflation.”

Programmes like the Winter Energy Payment (WEP), first announced in December 2017 and introduced the subsequent winter, made statistically significant reductions to two financial hardship measures during winter months, in households with working age recipients of a core benefit.

It is here CPAG believes support should be targeted.

Since it’s introduction in 2018, there has been no increase in the WEP rate, held at $20.46/week ($450.12 total) for single parents with no children and $31.82/week ($700.04 total) for couples and people with children.

Between December 2018 (after the first year’s payment concluded) and December 2025, household energy costs have increased 30%.

During the same period at the gas pump, 95, 91, and diesel have increased 31.3%, 31.8%, and 46.2%, respectively. (Source: Household Energy from SNZ CPI & Petrol from FigureNZ’s visualisation of MBIE data)

“CPAG is calling on the Government to increase the WEP by 30% in time for the coming winter. It’s an approach that aligns with the Government’s move to use already-established systems to support low-income families, but which also recognises the pain being felt in households receiving core benefits.”

This would lift the total WEP payment to $585.16 or $26.60/week for singles, and $910.52 or $41.37/week for couples or people with children.

We’d also ask the Government to consider extending the period of this year’s WEP to 26 weeks, starting in April, bringing the total WEP to $691.60 total for singles, or $1,075.62 total for couples or people with children.

“To shield New Zealand’s most vulnerable from the ripple effects of rising fuel costs, the Government should make its response a two-pronged approach: temporarily increase work-related tax credits and provide unconditional cash support to people on benefits through the WEP.”