Rotorua solo dad on benefit says he will be no better off working for minimum wage

Solo dad Thomas Reid wants to work but says getting a minimum wage job would leave his family worse off due to skyrocketing living costs.

He is not alone. A budget service manager says he understands why there is a “reluctance to move away from the safety net of benefits” and a beneficiaries advocate says some clients with children are only clearing an extra $20 a week after getting a job.

However, the Ministry for Social Development says its modelling shows a sole parent working 40 hours a week and earning the minimum wage of $21.20 as well as a family tax credit, in-work tax credit and accommodation supplement, would be $257.05 better off per week. This was after rent was deducted.

Benefits had also increased between $20 and $42 an adult a week and the minimum wage was now $21.20 an hour.

Reid, who lives in Rotorua and has two children living with him, said he could get a low-paying job ”pretty fast” but he needed $25 an hour or more to be better off.

He had been to job interviews but hadn’t had any success.

Sitting at his kitchen table in his modest two-bedroom home, he said he received about $650 a week on the benefit. Once $430 a week for rent and $50 for power were deducted there was not much left for food, Wi-Fi, and other day-to-day expenses.

He was getting a winter energy payment of $20 to $30 a week.

Reid, who has also accumulated debt after being unable to meet his vehicle payments, said his living costs would increase further if he had a job.

“There is no way I can afford childcare and I can’t afford a car or petrol so that is making my job search even harder. I’d also need extra food for lunches.”

Reid said, in his view, people worked to be better off financially.

“You can’t even save on minimum wages. Something drastic needs to happen in New Zealand. It’s soul-breaking.

“I feel like I go one step forward and four back and it all relates to money.”

Living on a benefit wasn’t rosy and Reid felt trapped and depressed.

“We hardly have any money and no savings. Most nights we have noodles, some nights we have toast or Weet-Bix. It’s truly hard to think it can get worse than this.”

Beneficiaries Advocacy and Information Service manager and senior advocate Karen Pattie said most solo parents wanted to work but she had done assessments for some beneficiaries who had taken on a 40-hour-week job and they were only $20 better off.

“They still do it because they are doing it for their mental health. They hope they will get a wage increase but I don’t think it’s going to benefit them financially.”

She said it was a “juggling act” for solo parents in the workforce but they made great employees because of their multi-tasking skills.

However, there were “biases against them” because employers worried if the children needed them or were sick.

“I don’t know how sole parents are doing it, to be honest.”

Ministry for Social Development client service delivery manager Kay Read said parents and their whānau were typically financially better off when they were employed.

“There is also considerable evidence that unemployment has detrimental impacts on health and wellbeing, while employment has been found to lead to improved self-esteem, as well as improved general and mental health.

“In our experience, the vast majority of people receiving a benefit do see the value in working. In fact, recent trends have shown an increase in people moving off benefits into work.”

Read said in the past three months of 2021 figures showed more people came off benefits and into work since electronic records began in 1996.

But data reveals in the Bay of Plenty the number of people on the sole parent, working-age benefit at the end of February had jumped by 9.3 per cent to 8109.

National MP for Rotorua Todd McClay said the Government’s system was confusing and did not seem to encourage people who wanted to work.

“Where people can work they should. But there will be many people like this man who want to be in the workforce to look after their kids but the system is just letting them down.”

McClay said every time somebody had one change in their circumstances a lot of payments decreased or went up.

Rotorua Budget Advisory Service manager Pakanui Tuhura said the cost of living was going up “so I can understand why there is a reluctance to move away from the safety net benefits”.

“The only real silver bullet out there is to get a well-paying job or start a successful business themselves.”

He said more non-beneficiary, low-income earners were seeking help because of the rising costs of living.

Ngai Te Rangi chief executive Paora Stanley said it was useful for people who were struggling to have a game plan.

The iwi had micro-credentialing programmes and its driver’s licence course had opened doorways into well-paying forklift jobs.

“Those plans are really important because it gives you a direction to go, a pathway, and a timeline to do it. People who are on benefits always want to get off it, even though they are considered bludgers but you have to have a pathway.”

By the numbers
• Minimum wage $21.20 after tax $37,160 a year or $714 a week.
• MSD figures show at the end of March there were 18,525 working age people on Job Seeker Support in the Bay of Plenty. Nationally there were 177,642.
• There were 72,372 on the sole parent, working-age benefit at the end of March nationally and 8133 in the Bay of Plenty.

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