Increases to Family Tax Credit and Best Start payments ‘not enough’, critics argue

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Prime Minister Jacinda Ardern today announced increases to the Family Tax Credit and Best Start Payments that would help about 346,000 families, raising payments by an average of $20 a week.

But it’s not enough to lift children out of poverty, new Children’s Commissioner Frances Eivers said.

While the “small increase” is a welcome step, more is needed to make meaningful change, she said.

“In a country with the resources of Aotearoa every mokopuna, no matter their background, should grow up in a whānau that has what they need to thrive,” Eivers said.

“…this level of increase to family incomes is not enough. Much more will be needed if we are serious about making a real difference for mokopuna.

New Children's Commissioner Judge Frances Eivers was welcomed into the role with a pōwhiri at Wellington's Pipitea Marae.

New Children’s Commissioner Frances Eivers says the increase to payments won’t make a meaningful difference Photo: RNZ / Matai O’Connor

“As the Government continues to review the Working for Families scheme, I urge it to pick up the challenge of the Welfare Expert Advisory Group [WEAG], and significantly increase family tax credit payments for every child in every lower income family.”

The 2019 WEAG report said the welfare system was “no longer fit for purpose and needs fundamental change”.

The Green Party said in a statement while it welcomed today’s announcement, it fell short of what was required.

“The support announced today will help. But Labour should have gone further and increased income support more quickly, and enough to ensure every family has enough to put food on the table, pay their rent, and keep their home warm,” Green Party social development and employment spokesperson Ricardo Menéndez March said.

The changes don’t come into effect until April next year, but families need more assistance now, Menéndez March said.

“Once we dig into the details of this announcement, it looks like the Government is window dressing. Meanwhile behind the front door are tens of thousands of families struggling to make ends meet.”

Child Poverty Action Group (CPAG) said the offerings were “out of touch and deeply dissappointing”.

The family tax credit increase of between $13 and $15 per child per week included a “well-overdue” inflation adjustment, CPAG spokesperson Susan St John said.

“Overall, low-income families will be just $5 per child better off in April next year than they would have been without this announcement, and well short of the recommendations of the Welfare Expert Advisory Group.”

St John said families receiving family tax credits whose incomes were over the abatement threshold would lose 27 cents instead of 25 cents of every extra dollar they earned.

CPAG spokesperson Janet McAllister said the tweaks showed the government was out of touch.

“We’re still waiting for the full modest benefit increases which were promised in May – they have been only partially implemented, contrary to reports. Children cannot live on promises of minor changes next year.”

CPAG recommends giving all low-income families the full Working for Families package, which should be indexed to wages.

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