Annex 2: Description of Welfare Programmes in New Zealand
Family Support
The family support tax credit and guaranteed minimum family income schemes are designed to assist low-income families by providing regular financial assistance throughout the year-rather than a lump sum payment at the end of each financial year as was the case before 1991. The family benefit or child allowance was abolished from 1 April 1991. Family support payments ate made to the principal care-giver. Family support tax credits paid out during the year ended 31 march 1992 totalled $NZ588 million. The maximum support entitlement is $2184 for the first child and any children aged 16 and over and a further $1144 for every additional child under the age of 16. The maximum support abates above a family income of $17500 per year at a rate of 18 cents in the $ up to $27000 and at 30 cents in the $ above that.
Guaranteed Minimum Family Income
This support is a tax credit which is paid in addition to family support. It ensures that families with dependent children receive a set minimum weekly income. Families with a gross family income of less than $18363 per year qualify. The guaranteed minimum family income level for a one-child family is $278 a week after tax.
Unemployment Benefit
This is payable to people unemployed, are capable and willing to undertake full time work, and have taken reasonable steps to obtain suitable employment. There were 170367 benefits in the June 1992 year costing $1445 m.
Domestic Purposes Benefit
This benefit is payable to a parent caring for children without the support of a partner, to a person caring for a person at home who would otherwise be hospitalised, and in some circumstances to an older woman alone. The number of benefits at June 1992 was 96722 and the cost was $1161 m.
Special Needs Grants for Financial Hardship
Emergency grants may be granted on grounds of financial hardship to those who do not qualify for the ordinary unemployment benefit. This payment is available to the self-employed and others who have sudden loss of income or whose venture may have failed. Since farmers cannot qualify for unemployment benefit, a special assistance programme was introduced in 1986 (see 6 below).
Special Assistance to the Farming Sector
A package for assisting the farm sector due to the downturn in the economic climate was introduced in July 1986. Part of the package was a special needs grant to farmers to provide for ordinary day-to-day living expenses. Grants were made available to bona fide farmers who were in a critical financial position with no funds or access to funds to cover living expenses. The criteria for payment were:
the farming operation was in financial difficulty and was not producing sufficient income to meet essential living expenses;
there was no significant off-farm income;
there were no assets unconnected with the farm operation which could be readily converted to cash;
a decision had been made to sell the farm and the asking price was realistic; or the family was in the active process of evaluating the ongoing viability of the farm.
The Department of Social Welfare sets a limit of 6 months on such grants, and applicants must re-apply every 6 weeks. This scheme was phased out by 1989 but it provides an outline of the necessary rules that any such scheme should possess if needed in the future.
Emergency Relief Measures Following Extreme Climatic Events and Natural Disasters
After a natural disaster, procedures for the provision of recovery assistance for the community at large are contained in the Recovery Plan for Natural Disasters and Emergencies administered by the Department of the Prime Minister and Cabinet. They are normally triggered by a declaration of a civil defence emergency. Adverse events relief programmes are administered by the Ministry of Agriculture and Fisheries and provide assistance specifically targeted to the agricultural and horticultural sectors. This assistance may be provided as part of a wider disaster recovery package or triggered independently.
Welfare assistance will be provided on a short-term basis through emergency family assistance under the emergency benefit provisions of section 61 of the Social Welfare Act 1964. This benefit provides assistance to meet the immediate needs of people who normally derive their principal income from land, or marine based, industries and who are suffering serious financial hardship as a result of adverse events (see 5 above for one-off financial assistance which also qualifies).
Adverse Events Family Income Support: This programme was introduced in November 1988 when the east coast of the South Island was declared an adverse event area due to a prolonged drought. The programme was funded by the Ministry of Agriculture but was administered by the Department of Social Welfare. Applicants must be resident in the declared adverse event area. The basis of the application for assistance is a statutory declaration that the applicant is in financial difficulty because of the drought. In May 1989, a similar declaration was made for a large area on the east coast of the North Island, with similar welfare provisions.
Exit Grants
At the time of the introduction of the Adverse Events Family Income Support Scheme, additional government support was provided for non-viable farmers to encourage them to leave farming. Providing a sale took place, the government undertook to ensure that the departing farmer's assets were made up to the value of $45000.
The Rural Bank had a small scheme for exit grants in 1987-88 but this was discontinued from November 1988 when the drought programme commenced.
These adverse events programmes are essentially one-off programmes designed to meet particular events. They could be reintroduced if the need was great enough. The effectiveness of the family support programmes has been acknowledged but there is some doubt if governments would entertain exit grants next time.
National Superannuation
This is the universal old age benefit paid by the government to all those who qualify. The qualifying age was 60 years for men and women up to 1991 and this is now being raised in steps so that it reaches 65 years by the year 2001. A surcharge tax is charged on all income earned over a certain level, $80 per week for a single person, and $120 for a married couple, at 25 cents in the dollar. For those people with private superannuation, the first half of all such income is exempt from the surcharge. In the June year to 1992, there were 504,561 benefits being paid at a cost of $5514m.
| © MAF 1994 | ||
| MAFnet Help | Last updated: 30-Jun-2002 | Important Disclaimer |
Contact for Enquiries
Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
Contact this person
