A new report from NZ's social service charities puts the number of people in material hardship at 473,000 — and shows how the structure of the benefit system can sometimes keep people trapped. Here is what the data actually says.
A new report from the New Zealand Council of Christian Social Services (NZCCSS) has put a number on what hardship looks like in New Zealand right now: 473,000 people experiencing material hardship, and 10.2 percent of the population in relative income poverty. That figure — 473,000 — is roughly the size of Christchurch.
The report was covered by RNZ on June 30, drawing on data from multiple sources to build a picture of financial stress across different groups. The numbers are striking on their own, but the story also contains some important details about why the situation is structurally difficult to escape.
The benefit abatement problem
One of the central issues the NZCCSS report highlighted is how the benefit system interacts with low incomes in ways that can discourage people from working more hours.
Currently, access to the benefit drops when a household earns more than $160 a week. Above that threshold, the abatement rate means that every additional dollar earned reduces the benefit payment. The NZCCSS is recommending that the allowance be lifted to $350 per week, with a higher rate for couples.
The practical effect of a low abatement threshold is that a person on a benefit who picks up a few extra shifts can end up with little or no net financial gain once the benefit payment is reduced — a situation that critics describe as a poverty trap. The report's authors argue that a higher earning allowance would make part-time or casual work more financially worthwhile for people on benefits.
What the cost-of-living data shows
The report's figures on how costs have moved since 2021 give a sense of the pressure that low-income households have been under:
- Food costs for a family of four have risen 24 percent since 2021
- Power costs are up 12 percent over the past year
- Rent is consuming around 40 percent of tenants' take-home pay on average
Those figures come from NZCCSS chief executive Alicia Sudden, as reported by RNZ. Separately, the Salvation Army's research and justice director Bonnie Robinson told RNZ that 100,000 people were unable to pay their utility bills on time, and one in three households were experiencing food insecurity.
The food insecurity figure is reflected in demand for food support. Last year, food banks and related services gave out 90,000 food parcels — up 7 percent on the previous year. Robinson noted that demand for food support was running 50 percent higher than before the Covid-19 pandemic, and that around 10 percent of people needing food support were in employment.
Who is most affected
The report breaks down hardship across demographic groups:
- 51 percent of Māori households experienced moderate to severe food insecurity
- More than 60 percent of Pacific households were in the same position
- More than half of disabled people were living without enough money, or only just enough, to cover essentials
- 16.8 percent of people aged over 65 were in relative income poverty
- The number of over-65s on the public housing register had almost doubled over the five years to June last year
The over-65 poverty figure may seem counterintuitive given New Zealand Super's universal nature, but the report noted that the measure reflects income from all sources and that some older people in the data had significant assets, including mortgage-free homes. However, it also noted that in 2021, more than a quarter of adults over 65 were still in paid employment — with 29 percent reporting they had to keep working for financial reasons.
The structural question
Robinson's summary of the underlying problem was blunt: "Fundamentally food is too expensive and people's incomes are too low. That's a perfect storm."
The report's recommendation goes beyond emergency support. It calls for the abatement threshold to be lifted, for benefit rates to be increased, and for a GST-rebate support package to be introduced for lower-income households to help with food costs. Whether those changes happen is a political question — but the numbers in the report offer a framework for understanding what the poverty statistics actually represent in terms of people's daily lives.
This article is for general information only and is not personalised financial advice. Seek advice from a licensed financial adviser (registered on the FSPR) for guidance specific to your situation.