The amount of money the Government's paying out in hardship assistance to New Zealanders who aren't on a main benefit has jumped over the past year.
Figures released to Newshub under the Official Information Act show the number of people who don't receive a main benefit but are receiving Temporary Additional Support (TAS) and Special Needs Grants (SNGs) has increased in the year to June 2022. The amount being paid out has also surged.
They're last-resort assistance for New Zealanders who can't meet their essential costs from their regular income. Kiwis don't need to be receiving a main benefit to qualify for them. The TAS is paid out weekly for a maximum of 13 weeks, while SNGs are one-off payments.
The data shows that in the year to June 2022, 3006 non-beneficiaries received TAS, with the support being paid out at a weekly rate of $323,830. That's up from 2538 people in the year to June 2021 at a rate of $244,513.
There were 40,242 SNGs provided to non-beneficiaries over the past year, totalling $15.5 million, a jump from 34,608 grants the previous year, or $14.9 million.
There's also been an increase in the number of main benefit recipients getting additional support.
Nearly 72,000 people on a main benefit received TAS over the past year, at a weekly rate of $5.3 million. That compares to 70,884 people and a weekly rate of $4.6 million a year prior.
The increase comes despite nearly 10,000 people coming off a main benefit over the past year.
The number of SNGs provided to main benefit recipients has dropped from 312,711 to 280,299, but the amount paid out has risen from $102.2 million to $115.2 million.
Most of the figures, however, are down on the year to June 2020, which included the start of the COVID-19 pandemic when there was sharp lift in the number of people accessing benefits.
What's behind the jump?
The past year has seen cost of living pressures intensify for Kiwis, and this data reflects that period.
Headline annual inflation was 7.3 percent in the June quarter, while food prices rose 7.4 percent. The price of rent was up 4 percent for the year to June 2022.
MSD said the increase in the level of hardship assistance "is largely a result of people's ongoing struggle to pay for housing". It could also reflect MSD's work to better communicate that there are additional supports for meeting essential costs, the ministry said.
In October last year, the Government lifted the income limits for the likes of Special Needs Grants meaning more people became eligible. The change was originally meant to last until the end of February, but was later extended until June 30.
"Right from the start, we were very clear with MSD that where whanau are entitled to support then MSD needs to make sure that they can access that," Social Development Minister Carmel Sepuloni previously told Newshub.
"We did lift the hardship threshold so that more whanau who perhaps aren't necessarily on a benefit but are on the lowest of incomes, that they can access hardship support as well. I'm sure that that has had an impact."
However, David Marra from Christchurch Budget Services told Newshub that while more people may be accessing grants to help with rising day-to-day living costs, other factors are also leading more Kiwis to approach MSD.
He mentioned the Government's crackdown on loan sharks, which included banning compound interest on high-cost loans and stopping borrowers from having to pay back more than the original loan.
"There was a time where if the car broke down or something like that, you'd go to your local friendly neighbourhood loan shark and borrow the money to fix the car," Marra said.
But that "source of financial relief… all but evaporated" due to the Government changes, Marra said, meaning people now have to look elsewhere, including at MSD's additional supports.
"The other opportunities for quick cash in an emergency situation, that's all dried up. So it'll be a mixture of that which I believe is driving those increases," he said.
Before the Government stepped in, individuals who relied on high-cost, short-term loans from loan sharks often had to make large repayments, leading to a spiral of debt. But Marra said there is not the same issue with getting assistance from MSD.
Is enough being done to help?
Skyrocketing inflation forcing lower-income households to need more Government assistance isn't an issue just for New Zealand. The main drivers of high prices have been global, including supply chain disruptions due to COVID-19 as well as the war in Ukraine, though there are domestic spending factors as well.
Finance Minister Grant Robertson told Newshub the Government designed the cost of living payments to be targeted toward low and middle-income New Zealanders who haven't been aided by recent increases in main benefits, the minimum wage and other supports.
"We recognised that for a group of New Zealanders who hadn't received support that came through our lifts to benefits and the Winter Energy Payment that we needed to do something. That's why we brought in the cost of living payment," he said.
"We have obviously developed a range of other initiatives in health and elsewhere that everyone benefits from, things like the Best Start payment and so on that everybody benefits from as well."
National finance spokesperson Nicola Willis wants to see more of a plan from the Government for how to tackle inflation.
"With prices going up as fast as they are and wages not keeping up, New Zealanders from all walks of life are getting desperate," she said.
"We can see that at the food banks, we can see that with people going backwards. So our advice to the Government is get the Reserve Bank focused on its job. Be disciplined about your own spending, release bottlenecks of the economy, stopping adding costs to business, and also ensure you are getting value for every taxpayer dollar."
Wage inflation jumped to 3.4 percent in the June quarter, still far below annual inflation.
Greens' social development spokesperson Ricardo Menéndez March said the new data highlights that more needs to be done to lift Kiwis' incomes.
"The fact that more people are requiring additional assistance on top of their main incomes to be able to make ends meet shows the need to make further increases to benefits and wages so that people are not having to navigate a complex system just to be able to cover their basic essentials."
Instead of requiring struggling main beneficiaries to apply for further assistance, like the Temporary Additional Support or Special Needs Grants, the Government should just increase benefits, the Green MP said.
"In many ways, it would make more sense to significantly increase means to reduce both the administrative burden of delivering several types of additional assistance," he told Newshub.
"But it would also reduce the stress on people who are struggling to get by, who often are not even sure of their full entitlements because to be able to even access the full temporary additional support you have to often jump through many hoops and have multiple conversations with case managers, which is resource intensive, both for the person and the ministry."
He continued the Greens' call for people on a benefit or getting a pension to receive the cost of living payment. The second instalment of the payment will be paid out next week to Kiwis who earned less than $70,000 and aren't eligible for the Winter Energy Payment.
"It's really difficult to take the Government's commitment to address poverty seriously when they are continuously excluding people on the benefit from their main initiative to address cost of living pressures."
Menéndez March said the latest data was also further evidence of why a rent freeze is necessary.
"We've got a race between basically the Government trying to keep incomes to a level that allows people to survive and then landlords putting rents up to a level that is simply not meeting the reality for income people. This is why we do need a rent freeze."
The Greens' campaign for a freeze on rent increases got a boost earlier this month when the Human Rights Commission said too many New Zealanders are "sacrificing their fundamental human rights to pay the rent" and a pause on increases would be helpful.
Robertson told Newshub this week there are no plans for a rent freeze.
"We've obviously done a lot of things to support the growth of more housing and we had some great information about it in the last day or so where we are seeing the rate of housebuilding increase significantly. We have also worked to improve our renters' rights."
