Tuesday, June 07, 2011

It’s back to work you go

The government has signalled that it would like parents to go back to work when their youngest child reaches 12 months.

Parents can only go back to work if they have a job to go back to. The government can’t make parents “go back to work” – or even look for work - unless they are on a benefit.

But it is beneficiaries that this policy is designed for – those who, by definition cannot go “back” to work, but must find work. But it is not just any beneficiaries – it is targeted at sole parents. And in some cases it could cost taxpayers more than leaving them on the benefit. Not that it is a good or bad thing, it just is.

A sole mother with three kids on the DPB gets $326.82 in benefit payments, plus Working for Families payments. Some get a WINZ accommodation supplement.

If she gets a job for 20 hours a week she loses her benefit. But if she earns less than $80,000 – which she will – she can get an $11.52 an hour WINZ childcare subsidy - to a maximum of $576.00 a week - to look after her kids. Her Working for Families payments will also increase by $60.00 a week.

Say she has three kids under five. She gets a job for 20 hours a week at $23/hr – she’d get $460.00 a week. She works four hours a day and takes an hour to get to work. While she works 20 hours, her travel time is 10 hours so she`ll get 30 hours of state-subsidised childcare a week – that’s $345.60 - which is more than the DPB. She’d also have to pay about $30 each week to travel to work.

If she got a job at $16 an hour for 20 weeks, she’d be getting slightly more than she got on a benefit, due to the $60 In Work Payment - but the state will be contributing even more to childcare.

But - the theory goes - it is better for the state to contribute more to pay someone else to look after kids, than for a mum on the DPB to stay home and look after children.

Much better for the worker to contribute to the economy and pay transport costs to keep the buses running – because she is paying more tax.

Governments appear to think that staying home to look after your kids is only a good idea if you have an earning partner.

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Blogger Mister Ornery said...

The devil is so often in the details which is why government spokespersons tend to leave them out.

June 9, 2011 at 12:06 PM  

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