Once every fortnight about 17,000 New Zealanders are forced to apply for extra money from the Government.
Figures released by the Ministry for Social Development show that for the year ended June 2023, 52,100 people received 11 to 20 grants, 12,500 people received between 21 and 30 grants and 4600 people received more than 31 hardships grants.
Beneficiary advocate Kay Brereton said it was likely a lot of these people were not getting what they should be eligible for.
“The ministry did a pilot a while ago and I think it was 53 percent of people weren’t receiving the correct rate of benefit. So there might have been a small number who were being overpaid but generally they were people who weren’t being paid everything they were entitled to.”
She said it was likely that case managers were too overloaded to check that people were receiving their correct entitlements.
“Case managers just don’t really have the time or the knowledge to do those incorrect entitlement checks and so they’re not happening.”
Brereton said applying for a hardship grant could be time-consuming, and was demoralising to have to do on such a regular basis.
“It’s really exhausting. It probably takes a day, probably takes your whole day up at least, and you’re only going there because you really need the help.
“People feel really whakamā, they feel really ashamed and so they only go when they have to and then if they get turned down, they don’t know what to do.”
She described those who were getting the grants multiple times as “the lucky ones”.
People receiving hardships grants, by number of grants
A briefing to Social Development Minister Louise Upston from officials said that 80 percent of the increase in hardship grants from 2016 to 2023 was the increasing number of grants per person, rather than a growing number of people accessing help.
Numbers for people receiving between one and five grants each year has remained fairly consistent since 2016.
The total number of grants has increased from 856,000 in 2016 to 2.3 million in 2023.
In 2016 there were only 340 people who received more than 21 grants – in 2023 there were just over 17,000.
Upston said it was good that people could access support for when they were in hardship.
“We have a recession and we have a cost-of-living crisis, there will be more people that are facing challenging times. So when they need support, they should be able to access it.
“So I see that the system is working, as it should be.”
Green MP and party spokesperson for social development Ricardo Menéndez March said it showed widening inequality.
“With those struggling to make ends meet requiring regular assistance just to stay afloat, hardship grants are so that people can cover the basic essentials. So we’re seeing more people who regularly are unable to cover food, toiletries, or even the cost of their rent week to week.”
He said benefit levels simply had to lift and the cost of accommodation needed to come down.
“No amount of case management changes the fact that successive governments have set benefit levels below the poverty line, and that we don’t have good enough regulations to ensure that rents are affordable.
“So it is, in some ways, no surprise that despite changes to how case management is being done, people are needing more hardship grants just to stay afloat.”
Making people come back on a regular basis to ask for help was not a good system, Menéndez March said.
“The system does not treat people with respect nor dignity because we are making people spend countless hours each week trying to access assistance over the phone or face to face just to get a hardship grant to make ends meet.
“And at the end of the day, that takes away time from the person to be part of their communities, and consumes a huge amount of hours for frontline staff just to deliver hardship grants rather than being in a position to support people in other ways.”
Benefit levels increased yesterday in accordance with the annual general adjustment which happens every year on April 1.
Under the previous government, benefit levels had increased in line with wage growth, however the current Government passed legislation under urgency to align the increase this year with inflation.
The new rates are based on inflation at 4.66 percent, which is currently lower than wage growth at 5.28 percent respectively.
This means those on a main benefit, NZ Super, Veteran’s Pension and Student Allowance receive less than would have been the case under Labour.
This article does not accurately cover the vitally important difference in how NZ Super rates are continuing to be increased annually, compared with all other main benefits. Yes, all benefits including NZS are increased on 1 April in line with CPI movement. However, for NZS there is also a requirement to consider the proportional relationship of the resulting rates to the movement in the net average weekly wage. This provision ensures that the standard weekly amount of NZS payable to a married couple (the basis on which all other NZS rates are calculated) must not be less than 65 percent, or more than 72.5 percent, of the current net average weekly wage.
Instead of copying this dual process for other benefits, Labour simply indexed them to the average wage. National could then change this back to the CPI alone, ensuring that unlike NZS, they would continue to erode over time. As Emma Hatton notes, “The new rates are based on inflation at 4.66 percent, which is currently lower than wage growth at 5.28 percent respectively.”
There will be more hardship grant applications, not only from beneficiaries who will have their increases linked to inflation, but also from. social welfare staff made redundant, when their final payment ends.This will be handled by less staff who will burnout in so many cases and add to the beneficiary and tax reduction pile up.