Story: Family welfare

Page 7. Family welfare in the 21st century

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Families, children and employment

After the 1999 election the Labour-led coalition government made few changes to family welfare. However, in 2002 it removed the requirement for parents with young children on the domestic purposes benefit to seek paid work or forfeit the benefit. In the same year 12 weeks paid parental leave was introduced for employed parents with new babies. This was originally initiated by the Alliance Party (one of Labour’s coalition partners).

Who benefits?

Charles Waldegrave of the New Zealand Poverty Measurement Project welcomed Working for Families tax credits because they recognised the high costs of rearing children. However, Susan St John from the Child Poverty Action Group focused on the impact on the children of beneficiaries who do not receive these payments. She argued: ‘Leaving the worst off further outside the normal living standards of society is a recipe for disaster.’1

Working for Families

In 2004 a Labour-led government announced the ‘Working for Families’ programme, which raised parental income support, the accommodation allowance and childcare subsidies from 2006. This programme focused on employed parents rather than beneficiaries, providing additional support through tax credits to moderate and low-income families. The maximum amounts of family tax credit and the extra in-work payment increased gradually for families with dependent children if their incomes were lower than $35,000, giving more support to the first child than subsequent children.

Working for Families also included a higher accommodation allowance and slightly higher childcare subsidies. The childcare subsidy for preschool children in low-income households was extended to a maximum of 50 hours per week if parents were working, studying or in training and the amount gradually increased depending on parental incomes. However, this subsidy did not cover all the actual costs of childcare. From 2006 the Out of School Care and Recreation subsidy (OSCAR) was paid for up to 20 hours a week at the same hourly rate. Working for Families was continued under a National-led government between November 2008 and October 2017.

Families Package

A newly elected Labour/New Zealand First coalition government with a confidence-and-supply agreement with the Green Party announced a Families Package in December 2017 that came into effect on 1 July 2018. This package of family support policies built on Working for Families and included a new Best Start tax credit of $60 per week for the year following the birth of every child born on, or after, 1 July 2018. Best Start payments after the child is one year-old are related to household income. The Best Start tax credit will also be paid to caregivers who get the Orphan’s or Unsupported Child Benefits and the Foster Care Allowance. 

The Family Package increased Working for Family tax credits and Accommodation Supplement payments for some parents and extended the number of parents receiving these forms of support. Accommodation support depends on local housing costs, accommodation costs, family income, cash assets and family circumstances. Winter Energy Payments to assist with the cost of heating homes also came into effect on 1 July 2018. Those eligible include people on main benefits such as New Zealand Superannuation, Veteran’s Pensions, Jobseeker Support, Sole Parent Support, Supported Living Payment, Young Parent Payment and Emergency Benefit.

The Families Package replaced tax cuts the outgoing National-led government had planned for 1 July 2018.

Child poverty

Child poverty rates are often defined as the percentage of children living in households with incomes less than 50% of the national median after taxes and transfers, and adjusted for family size. United Nations Children's Fund (UNICEF) figures show that New Zealand’s child poverty rates, especially for sole-parent households, are relatively high, although they are lower than in the United States. While UNICEF argues that responses to child poverty should include universal child programmes as well as poverty reduction, New Zealand targets programmes to children assumed to be ‘at risk’.

Commentators have highlighted the consequences for children of poverty. For example, children from low-income families have more than twice the incidence of chronic illness and disabilities as children living in families on higher incomes, and are more likely to experience social impairments, and emotional and conduct disorders.

The 2018 Budget included funding for two new expert units directed at reducing child poverty – The Child Poverty Unit and the Child Wellbeing Unit. Legislation introduced by Prime Minister Jacinda Ardern, as Minister for Child Poverty Reduction, will require present and future governments to set targets to reduce child poverty.

The Families Package is directed at addressing child poverty by increasing support for parents through family tax credits and accommodation supplement payments depending on their household income, family circumstances and housing costs. Winter Energy Payments aim to subsidise the heating costs of households on the main benefits, including sole parents and young parents. Best Start tax credits support all parents in the first year of a child’s life and parents on lower incomes with children aged one to three years. 

Early childhood education subsidies and family benefits

In July 2007 the Labour government began funding early childhood education without parental fees for all children aged three to five years for up to six hours a day and up to 20 hours a week. Although the fees charged by many centres exceeded the maximum subsidy, the reforms substantially improved state support for early childhood education. Parents of children aged three to five years could receive a mix of both the childcare subsidy and the subsidy for 20 hours of early childhood education if their low income childcare subsidy was for over 20 hours per week.

In 2015 public and private spending on early childhood education for children over three years old placed New Zealand in the top third of countries belonging to the Organisation for Economic Co-operation and Development (OECD) as a percentage of gross domestic product. Ninety-four percent of four year-olds and 89% of three year-olds were enrolled in early childhood education in 2015. This is related to policy directed at subsidising the costs of early childhood education for those over three years-old. Eighty-seven percent of early childhood expenditure is public spending. State expenditure takes the form of subsidies from government to private providers. In New Zealand most five year-olds being are in primary school. In most comparable OECD countries early childhood education continues for five year-olds.

Public spending on a range of family benefits, services and tax reductions was also above the OECD average in 2017. This was partly because data on cash transfers for New Zealand included spending on income support payments for sole parent families. In many other OECD countries support for these families was part of more general social assistance programmes for families.

It’s social engineering!

Hundreds of people marched on Parliament grounds on 28 March 2007, singing the national anthem and shouting their opposition to what they dubbed the ‘Anti-smacking’ Bill. One of the demonstrators, Louise Simpson, said that the legislation was ‘social engineering’. On the same day, celebrity supporters inked their handprints to a big banner headed ‘Hands Up for Change’, which was handed to MPs supporting the bill.

Families, discipline and the state

Some view state regulation directed at the welfare of children as interference in families. Against the background of moves in some European countries to ban the physical punishment of children, Green Party MP Sue Bradford introduced the Crimes (Substituted Section 59) Amendment Bill into Parliament. It removed parents’ legal right to use ‘reasonable force’ to discipline their children, a change that was strongly supported by the Families Commission (later called Superu). This change to the Crimes Act became law in 2007.

Groups opposing this legislation initiated a referendum in 2009 on the question: ‘Should a smack as part of good parental correction be a criminal offence in New Zealand?’ Eighty-seven percent of those who cast their votes in this referendum voted ‘no’, but only 54% of eligible voters participated. Some commentators argued that the question was ambiguous and misleading as it implied that any parent who smacked their child would be criminalised.

Prime Minister John Key stated after the referendum that the 2007 legislation was working well. However, the government decided that the law would be changed if a review of procedures showed that parents were being criminalised for lightly smacking their children. A series of police reviews found there had been 8 prosecutions for smacking between 2007 and 2013 and there was no indication by the government that the law would be changed.

Whānau Ora – a different approach to family welfare

Māori and Pasifika whānau are overrepresented among those with lowest incomes. They are also families that are most dependent on welfare benefits. Analyses of child poverty have highlighted the plight of children in these families, especially if their parents were not in paid work and not eligible for Working for Families tax relief.

In 2010 Whānau Ora was developed – a new approach to supporting families in need initiated by the Māori Party and adopted by the National Government. The focus was on whānau and the sets of relationships around them, rather than on welfare benefits for individuals. It recognized that state agencies such as Work and Income were not always the most appropriate organisations to work with families and also that communication between these agencies was limited. Interacting with multiple bureaucracies was often stressful for families needing support.

Whānau Ora was developed to provide cross-government support to families in need through non-governmental organisations contracted to work closely with families to find out what will be useful for them. The programme was informed by a model of partnership between families and individuals who might support and assist them – identified as Kaiārahi (or navigators). Kaiārahi met with individual families to find out directly from them what they saw as their needs and how they could be supported. They then liaised with non-governmental agencies to ensure that they had the support they needed. These non-governmental community organisations were contracted by commissioning bodies responsible to a central government agency for delivery of the programme.

Te ao Māori principles and practices shaped the development of this programme and it was specifically directed at supporting Māori and Pasifika families. However, it was available to families of all ethnicities in need of support.

A review by the Auditor General in 2015 concluded that while the programme was innovative in its collective approach to family well-being, better planning and financial management was needed.

Footnotes:
  1. New Zealand Herald, 30 March 2003. Back
How to cite this page:

Maureen Baker and Rosemary Du Plessis, 'Family welfare - Family welfare in the 21st century', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/family-welfare/page-7 (accessed 18 June 2019)

Story by Maureen Baker and Rosemary Du Plessis, published 5 May 2011, reviewed & revised 29 Jun 2018