Purpose
The Families Package was introduced in 2018 as part of the government’s focus on reducing child poverty and ensuring children get the best start in life. The package included changes to several income support payments and introduced two new payments, Best Start and the Winter Energy Payment. The Families Package is delivered primarily through MSD and Inland Revenue.
Key Results
Families Package Final Report:
More than half of families with children received extra income from the Families Package. Mothers eligible for Best Start and extended paid parental leave gained an additional $6,600 on average by their child’s third birthday. Lower income mothers who qualified for Best Start for the full three years had larger than average gains, with mothers supported by benefit gaining $10,200 on average.
The Winter Energy Payment had statistically significant positive effects on measures of economic wellbeing in winter months.
After two years an estimated 90% of the extra increase in accommodation assistance was captured by Accommodation Supplement recipients as an extra increase in after-rent income. There was also no evidence that the Accommodation Supplement changes led to notable increases in rent.
Two studies that investigated the extent to which increases in assistance create a disincentive to work found that the practical impacts of disincentives to work appear small.
Looking at the combined effect of the Families Package and other 2018-2022 income support changes, in real terms, total incomes after housing costs of people supported by main benefits were, on average, 43% higher in 2022 than in 2018. The proportion of people supported by main benefit who said that they have enough income to meet their everyday needs increased, but some families are still struggling to cover their essential costs when supported by a main benefit.
Child poverty measures fell downwards between 2017/2018 and 2021/22. This continued a longer period of decline. Despite a narrowing of differences between ethnic groups, in 2021/22, 1 in 5 tamariki Māori, 1 in 4 Pacific children and 1 in 5 children impacted by disability lived in households experiencing material hardship. These rates compared with 1 in 10 for all children.
Income adequacy, improving take-up and awareness of income support payments, and improving people’s experiences of claiming payments are areas for continued focus. These findings are informing policy reviews and service delivery improvements. New research projects getting underway are building the evidence base on income adequacy and costs for whānau.
Families Package findings for Māori:
The Families Package increased income for 71% of all families with children with a Māori parent or caregiver. Māori mothers with pēpē who were qualified for the new Best Start tax credit had the largest gains.
Looking at the combined effect of the Families Package and other 2018-2022 income support changes, in real terms, total incomes after housing costs of people in all ethnic groups supported by main benefits were, on average, 43% higher in 2022 than in 2018.
Child poverty measures for tamariki Māori fell. This continued a longer period of decline in the proportion of tamariki Māori in poverty and experiencing material hardship.
These positive effects on economic wellbeing occurred without notable impacts on employment and earnings overall. There was also no evidence that the increase in the maximum Accommodation Supplement led to a notable increase in rents charged to Māori tenants receiving Accommodation Supplement.
Our findings indicate that income adequacy and indexation of payments are areas for continued focus. These findings are informing policy reviews and service delivery improvements. New research projects getting underway are building the evidence base on income adequacy and costs for whānau affected by health conditions and/or disability.
Other areas for continued focus include improving take-up and awareness of income support payments, and improving people’s experiences of claiming payments. These are current areas of focus for MSD and Inland Revenue.
Families Package finding for Pacific Peoples:
The Families Package increased income for 71% of all families with children with a Pacific parent or caregiver. Pacific mothers with babies who qualified for the new Best Start tax credit had larger than average gains.
Looking at the combined effect of the Families Package and other 2018-2022 income support changes, in real terms, total incomes after housing costs of people in all ethnic groups supported by main benefits were, on average, 43% higher in 2022 than in 2018.
Child poverty measures for Pacific children fell. This continued a longer period of decline in the proportion of Pacific children in poverty and experiencing material hardship. In 2021/22, measures for Pacific children were subject to
greater levels of uncertainty due to Covid-19 reducing numbers of households surveyed.
These positive effects on economic wellbeing following the Families Package occurred without notable impacts on employment and earnings overall. There was also no evidence that the increase in the maximum Accommodation Supplement led to a notable increase in rents charged to Pacific tenants receiving Accommodation Supplement.
Our findings indicate that income adequacy and indexation of payments are areas for continued focus. These findings are informing policy reviews and service delivery improvements. New research projects getting underway are building the evidence base on income adequacy and costs for Pacific peoples affected by health conditions and/or disability.
Other areas for continued focus include improving take-up and awareness of income support payments, and improving Pacific people’s experiences of claiming payments. These are current areas of focus for MSD and Inland Revenue.