Accommodation Supplement: The Wrong Tool to Fix the House Janet McAllister Susan St John Alan Johnson May 2019
“You’re constantly in a state of emergency, it’s not like you’re never not in an emergency… I really don’t understand why the base amount of the benefit isn’t enough to live on. They really should raise the base amount so it’s enough to live on. And then all those extra bits can be there if you need them. ” Tim Danko , single parent with lived experience of receiving a benefit Image: Sam Orchard From Welfare Fit for Families Episode 4: “Not Enough” CPAG/ We Are Beneficiaries
“Officials consider that the existing housing subsidy structure [IRRS, AS, TAS] is not fit-for-purpose . AS does not adequately alleviate housing stress … We think that a more ambitious welfare package could include a significant review of the Accommodation Supplement, with a view to at least simplifying its structure and improving targeting of payments, or perhaps reconsidering it altogether .” Treasury advice to Minister of Finance 2016
Today: • What is the AS • What’s wrong with it • What does CPAG want instead (with one option detailed) • What’s different between CPAG’s proposal and WEAG’s
Souce: Whakamana Tāngata (WEAG report) p17
Big AS Problem: It lowers your control over how to spend your money $350 $300 Rent down by $125 $250 $200 Savings up by only $37.60 $150 $100 $50 $0 Rent Rent still to pay Rent covered by AS Sole Parent , 1 child, Area 1, no abatement
BHC income Sole Parent Support 3 children, Area 1
Receiving benefit/NZS Not receiving benefit/NZS Sole 40 hours Parent Min Wage Support Example Low Income 60 hours Families/ JobSeeker Min Wage Support Households Paying ~lower-quartile rent 30 hours Min Wage Supported Living
Aims: AS • Children: > 60% AHC • Adults > 50% AHC • Min wage covers current max AS rate for a person working 35 hours Method: Net Benefits $70-$300pw (two rates) Working for Families • IWTC for families ($72pw) receiving benefits • First child FTC $131pw • Second child FTC $72pw • Increased abatement threshold Minimum wage To $20.50 p/hr (2018)
Example households’ AHC income as % of equiv median, 2018 90% 80% 70% 60% 50% Actual 40% 30% CPAG 20% model 10% 0% SPS SPS 40hr 40hr SPS SPS 40hr 40hr JSS JSS 60hr 60hr SLP SLP JSS JSS 30wk 30wk A1 A4 wk wk A1 A4 wk wk A1 A4 wk wk A1 A4 A1 A4 A1 A4* A1 A4 A1 A4 A1 A4*
WEAG proposals for AS Compatible as “do now” within a plan to get rid of the AS? AS cash limit: ✓ Increase, index and liberalise Be proactive to improve the take-up rate ✓ of AS and TAS for non-benefit recipients Acknowledge TAS isn’t temporary and ✓ (for now) make it more flexible (eg reviews every 3- 12 months) Index Accommodation Supplement rates Index benefits, WFF to movements in housing costs and wages instead Increase benefits, WFF Increase the Government AS contribution and wages instead (as % of rent) Decreasing the entry threshold for ✓ homeowners from 30% to 25% to align with renters
Example families, receiving benefits, with children: income as % AHC median 2018 100% 100% 100% 90% 90% 90% 80% 80% 80% 70% 70% 70% CPAG 60% 60% 60% WEAG Actual 50% 50% 50% 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 10% 10% 0% 0% 0%
Janet.McAllister@gmail.com Thanks to the Mental Health Foundation for supporting me to be here today!
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