Covid 19 coronavirus: White New Zealanders are more likely to make a new and more generous benefit

White New Zealanders are much more likely to get a new, more generous welfare payment introduced in response to Covid-19.

The government was warned that it was creating a “two-tier” welfare system that could worsen racial inequality when it introduced the highest, tax-free and most accessible benefit in May.

The Covid Income Relief Payment (CIRP) of $ 490 a week was worth nearly double the unemployment benefit of a single person. Unlike most existing benefits, it was also available to people whose members earned, as long as that member earned no more than $ 2,000 per week.

When it was introduced, the government said it was to “cushion the blow” for people who had an unexpected and sharp drop in income, but denied that it was the welfare of the middle class.

Welfare advocates said the policy gave the impression that long-term beneficiaries were less deserving than middle-class people who had just lost their jobs during the pandemic.

Maori households are overrepresented in the long-term beneficiary category, and the National Party said that making the new benefit permanent could worsen racial inequality in the welfare system.

Data from the Ministry of Social Development (MSD) released last week provides a snapshot of who has received the Covid Income Relief Payment so far. European New Zealanders (43 percent) claimed it at a rate almost three times higher than Maori (16 percent).

That contrasts with the less generous unemployment benefit. In the period since Covid’s arrival in New Zealand, European Maori and New Zealanders have received jobseeker support in a similar proportion (35%).

Auckland Action Against Poverty advocate Kathleen Paraha said all the grantees she worked with felt they were being “scammed” when the Covid aid payment arrived.

“It’s just not fair, it’s a two-tier thing,” he said.

Paraha, who receives the Supported Living Subsidy, said beneficiaries constantly struggled to obtain grants for food and other costs because basic benefits were not paying enough.

His organization had applied for food grants for 16 people on Friday alone; all were rejected.

Mangere East Family Services CEO Peter Sykes said it was particularly frustrating for long-term beneficiaries who were competing in the same job market as the newly unemployed.

“The poor in the nucleus are still poor and are quite suspicious of the system,” he said. “Now all of a sudden, people can just send an email and get paid. Most of our community doesn’t believe it.”

Many of the people in his suburb were casual workers in hospitality and home care and did not qualify for Covid pay when they lost their jobs. The pay has a minimum hour requirement.

Social Development Minister Carmel Sepuloni stressed that the Covid payment was a short-term measure for an unprecedented crisis. Also, many people found that they were better off with a benefit than a temporary payment because of the additional support they might be eligible for.

“People take a number of factors into account when requesting support,” Sepuloni said.

“For example, their ability to work part-time, termination pay, or they may consider the stability of an established payment as a benefit, rather than moving to a temporary payment like CIRP.”

Another rationale for paying Covid is that those who have lost their jobs due to the pandemic are more likely to be mortgage holders. If large numbers of people default on their mortgages, it could significantly increase the economic impact of the pandemic.

Max Rashbrooke, a researcher who specializes in economic inequality, said there could be a potential advantage to the new Covid payment. In countries where people were paid more in benefits if they earned more, there tended to be more support for the broader welfare system.

“Increasing payments to middle-class households can create more policy space to increase payments to truly poor households,” Rashbrooke said.

“It is plausible that if they feel they are getting more out of the welfare state, they are more likely to own the system and feel more akin to other people receiving welfare payments. That is the optimistic view, from the point of view. of inequality “.

The government raised core benefits by $ 25 a week (13 percent) in response to Covid, though that was on the low end of the 12-47 percent increase recommended by an Advisory Group of Experts on Wellness last year.

The expert group found that basic benefits were between $ 100 and $ 300 per week lower than what beneficiaries needed to pay their bills and live in dignity.