Days to the General Election: 22
See Party Policies here. Party Lists here.

Terry Baucher finds many families grappling with the EMTR problem; says Universal Basic Income one obvious alternative

Terry Baucher finds many families grappling with the EMTR problem; says Universal Basic Income one obvious alternative

By Terry Baucher

One of the bigger surprises in the Budget was the first real increase in benefit payments for over 40 years.

But what the Government giveth, it can also taketh as the Budget also included increases in the rate at which benefits are “abated” as a person’s income rises.

For some families the combination of income tax on increased income and the resultant abatements of benefits may result in no net gain. In effect, they are paying 100% or more on their income. 

If you’re thinking “But I thought the highest rate of income tax was 33%?” then say hello to the Effective Marginal Tax Rate (“EMTR”).

In Inland Revenue’s words “EMTRs are a measure of the total amount lost from a marginal increase in earnings (often taken to be $1) due to taxes, deductions and social assistance abatements.”

EMTRs are not some obscure technical issue.  They are of major concern to a surprisingly large number of taxpayers.

These include beneficiaries, recipients of Working for Families and anyone with student loan debt. For example, in the year to 31 March 2014 381,000 families received Working for Families payments totalling more than $2.5 billion. 

For recipients of working for families abatement of their entitlements start when the family income exceeds $36,350 per annum.  For every dollar earned above that amount working for families credits are abated at a rate of 21.25 cents in the dollar.  The income tax rate for someone earning $36,350 is 17.5% (18.95% once the ACC earner premium of 1.45% is included).  The effect of abatement means once a person’s annual income exceeds $36,350 they have an EMTR of 40.2% (including ACC). 

If the person has outstanding student loan debt then a further 12% of his or her salary must be deducted once the annual income exceeds $19,084 or $367 per week.  As at 31 March 2014 there were 615,746 New Zealand based borrowers collectively owing $11.189 billion in student loan debt.

Incorporating Student Loan deductions would result in an EMTR of 52.2% (including ACC) on income between $36,350 and $48,000 (the threshold at which the income tax rate rises to 30%).   Someone with a student loan and receiving Working for Families on the average weekly wage of $1,310 would have an EMTR of 64.7%.

An Inland Revenue August 2010 report on Working for Families noted that for the year ended 31st March 2008 126,700 families had an EMTR between 50% and 75%, 30,800 an EMTR of between 75% and 100% and 5,400 had an EMTR above 100%.  Inland Revenue presently estimates 4,000 families have an EMTR of 100% or more.

Despite the benefit increases the strain of EMTRs seem likely to get worse.  The recent Budget increases the abatement rate to 22.5 cents on the dollar from 1 April next year.  The threshold at which abatement commences will also be reduced to $35,900 from 1 April.  Eventually the abatement rate will be 25 cents on the dollar and commence at $35,000. 

The impact of abatements and tax for low income earners and beneficiaries is illustrated by this example taken from a MSD presentation made at last year’s Tax Administration in the 21st Century conference.

The left hand column shows what a non-employed sole parent with two children living in Auckland and paying $410 in rent would receive.  The right hand column illustrates the position if the parent works 30 hours a week at the then minimum wage of $14.25.

Income of solo parent with 2 children living in Auckland earning $14.25/hr

Although the parent is now earning and consequently qualifies for the In-Work Tax Credit, overall the parent’s net position improves by just over $100 per week.  In effect, the parent is earning $3.40 per hour after tax, or an EMTR of 76%.  Arguably, once transport and child-care costs are factored in, the parent’s net position may be little changed.  

The problem of EMTRs and their impact on low income earners receiving social assistance is not unique to New Zealand.  A November 2012 United States Congressional Budget Office survey noted an EMTR of 97% for some low-income taxpayers.

In 2013 the British charity CARE carried out an international comparison of EMTRs in the OECD. It reported an EMTR of 159.4% for a single person in Portugal with two children on 50% of the average wage. (According to the CARE report the EMTR for an Australian in the same situation would be 67.9%). 

The implications of EMTRs are potentially profound. High EMTRs can make it very difficult for low-income earners and beneficiaries to break out of poverty.  This is behind Child Poverty Action Group’s recent calls for an overhaul of Working for Famlies and other low income support schemes.

For those with student loans it hampers saving for a house and delays having children. Consequently some commentators are starting to question the long term merits of the current student loan scheme.

Quite apart from the fiscal impact on families, the current system is costly to administer and its complexity makes it difficult for claimants to understand their potential entitlements.  Having to deal with Inland Revenue and the MSD can also be frustrating.

Stage Three of Inland Revenue’s massive Business Transformation project intends to address these issues by digitising and streamlining the process for claiming entitlements. Although the Business Transformation changes will be welcome, and certainly of benefit, they won’t address the underlying EMTR issue for social assistance recipients.

That will require more radical treatment: maybe in the form of a Universal Basic Income along the lines of the idea promoted by Gareth Morgan.

Longer term, higher salaries and wages resulting from productivity gains and strong economic performance, should reduce the need for initiatives such as Working for Families.

Until that day many families will continue to grapple with the EMTR problem.


*Terry Baucher is an Auckland-based tax specialist and head of Baucher Consulting. You can contact him here »

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Just another lefty economist wanting to give bennies a free lunch. If I get a pay increase I will get taxed on the increase, why should not a benny? There is no such thing as a free lunch.
Student loans - you knew what you were getting yourself into. Low quality courses with low quality outcomes. Promises of high paying jobs that never existed. Maybe b4 you go to student loan territory a basic risk/reward calculation should be undertaken.
Universal income - just a way to give bludgers a free lunch. Dis-incentive to work in some cases.

you get taxed at 70 - 100% of your pay increased... that's increased _hours_ not rate.

you get taxed at 70 - 100% of your pay increased... that's increased _hours_ not rate.

re: student loans: get a grip - it simply does not work that way. I went in several times to get the "in demand skills" only to find that the tertiary place didn't have them yet, and when I got out the graduates had moved the cheese.

He makes an excellent case for cutting benefits.

Why don't the unemployed have to turn up somewhere to "earn" their benefit rather than sitting at home on the computer or watching tele? That way they won't see it as such a disadvantage to go out and work.

For someone that claims to be smart your comment shows little understanding. Come on Chris you are good with numbers so are capable of better. The example shows they have to work 30 hours per week for only $100 more, or $3.40 per hour. For their 3.40 per hour they have extra running costs in their vehicle and then extra money going out on work clothes. They are a mother first and foremost but the extra 30 hours means they are now busy and stressed, that may effect their parenting ability.

Sure there are some wider questions about how they got their in the first place, but you have voted for successive governments that have reinforced the solo mother culture.

The real answer it to make the difference between working and not working $20 per hour. Or to reduce the burden of unearned income of their weekly wage, sources such as rent. Yes, sort the other beneficiaries of government policy before you hit the disadvantaged, afterall you can't have your cake and eat it to.

If you were already working for your benefit you wouldn't have that problem.

Chris_J you need to wake up to the new 'normal'. That being the destruction of jobs right across the board - due to incresaed used of software and robotics etc. The looming issue is how do we redistribute income as it 'collects' with fewer and fewer and what do we do with those who aren't working that will prevent growing social unrest.

I wouldnt be smug, as it will affect most of us at some point.

If you can't find a job, create one.

A $2 trowel and some gloves and you can be a gardener! Do a good job and you will have a regular customer base and regular income.

All sorts of opportunities exist, just don't go washing windscreens or begging. Be sensible and do something you are good at.

Most people don't want to pay a gardener. Just because you can do something, doesn't mean people want to pay you to do it.

oh yeah, the 'just create a job' solution.

If only we'd thought of that one sooner.

So shallow,

a) just what are they going to do for 40 hours a week?
b) So you have them turning up for 40hours, is the benefit below that 40hours as a wage? hello minimum wage problem?
c) Who will supervise them?
d) Would these ppl then take jobs off actual workers? ie suppose we use them as unskilled, say street sweepers, we then make the council sweepers redundant? how has that helped really?
e) Do you really think many ppl on benefits are that happy with being on it?
f) For those who want to be on a benefit and not work, how much use would they be to an employer?
g) If we stop their benefit they start to steal stuff to survive, or mug ppl how does that help? society?


a) clean litter, maintain gardens, generally improve the place, or teach them some skills
b) benefit divided by minimum wage = hours worked
c) other formerly unemployed can supervise them
d) if they take another government funded job then this is saving us money
e) if they want money they have to learn to do something for it
f) if they want a benefit because they don't want to work they shouldn't get a benefit!
g) if they are going to steal stuff they will do it anyway. If they want an honest income then they need to do some work. It doesn't have to be hard labour, there could be a whole raft of community activities.

If your weekly income was dependent on you turning up somewhere on time, and helping someone do something, do you really think it would be the end of the world??

Because that's what normal people who work do everyday...

That would be the government creating jobs - not within this ones ability, Solid Energy is the latest case in point - Landcorp about to be the next. The only thing they know how to do well is dole out the money via the Fletcher's, Serco and other friends (friends who are guaranteed to do a bad job whilst ripping them off).

why don't you try it for six months (without job prospects at the end of that) and find out for yourself.

One thing the EMTR doesn't cover is the extra costs of having to dress-up, turn-up, and other associate costs of employment.

Try what? Sitting on my arse?

If you are receiving a benefit (unless it is for genuine sickness) you should be making an effort to find a job.

Benefits are not a lifestyle option although it seems some of the commenters here may very well be doing just that...

Not if the job gets taxed at a rate higher than the highest tax band,
If the government was really interested in getting beneficiaries working, they'd make the first 20k tax exempt, and tax the next 10 or 15 at a low rate.
As I said - they need people to take the blame...
And it works a charm - you've bought in to it.
People I work with have bought in to it.
I mentioned - in passing - to one of my colleagues the other day, that I always give some to the homeless on Queen Street when I'm out for lunch or whatnot, if I have change in my pocket.
Het response: What homeless?
I said - those begging on the street, can't really miss them. There's a bout 4 or 5 in the first 500 meters.
She said (dismissively, with absolute certainty): oh, but they're not homeless.
As if she had interviewed every single one of them and stuck a PI on their backs to see what they got up to.
See, this is what constant brainwashing does to you: you believe the lie.
There aren't many who like living on a hand out.
it erodes your self esteem like nothing else
it is just enough to starve on
it is incredibly emasculating.
it is a downward spiral
it is not a 'lifestyle choice'......

Abdicating your personal responsibility to provide for yourself food and shelter by deliberately being unemployable so as not too and preferring to imbibe other substances than food does not get my sympathy.

because everybody is the same.
And has had the same opportunities
And has the same mental abilities
Ad nothing is down to misfortune.
Tell me, how many homeless do you know? have to talked to?
You will find that substance abuse usually follows homelessness, not the other way around.
People take recourse to drugs to escape the nit-so-nice reality theu find themselves in.
Health care, especially mental health, is starved of funding. You can't put all mentally ill people in prison, so some find their way to live on the street.
I would expect people to thoroughly investigate an issue before judging.
Who knows, it could be you, someday.

I would have no problem with an EMTR of 100% but 103%, as we were subject to, became tiresome. I am, however, looking forward to your justification. Perhaps it would be my "Road to Damascus" experience, always wanted one of those.

Lets just spell this out for those privileged among us. (ie the others)

They receive an amount determined to be barely necessary for survival with no "fat" for investment or luxuries at the taxpayers expense.

The amount specified is -formally- set by policy, which -explicitly- includes an objective of poverty , as to "discourage benefits as a lifestyle choice".

And the 100 - 103% EMTR (not including work overheads) is somehow justifiable.
I too wish to hear this spiel !

And this is how national get their number of people on 'benefits' down.
It goes to show how beneficiary bashing, and blaming them for all the country's woes, is a weapon that has been successfully employed by the current government: first 2 comments on this thread blame the poor for being poor.
Like the rich saying: why don't the poor just get more money?
Why don't the unemployed just get a job?
If even a tax consultant points out that beneficiaries are targeted by right-of-centre governments in such a way that they end up paying more tax on their 'given' money than people who are taxed via income tax only - who WILL you believe?
When will it dawn on the rest of working New Zealanders that the poor are kept deliberately poor, and paraded as scapegoats, whilst corporate welfare goes on unabated?

"When will it dawn on the rest of working New Zealanders that the poor are kept deliberately poor, and paraded as scapegoats, whilst corporate welfare goes on unabated?"

Yep, keeps the people gaming the system out of the spotlight. Easy distraction for the feeble minded.

Not just corporate welfare, dont forget moral hazard as those with savings expect the tax payer to cover their deposit accounts when banks default due to excessive bad loans.

Well they (savers) can "expect" all they want - existing regulations prevent it from happening - savers get bailed in, not bailed out.

No, I think you are wrong here, the OBR was put in place to give a Govn the option of not having to bailout a failed bank, it still can I believe.

"Saved" not "savers" these are 2 differing groups.

if the govt of the day allowed the OBR to kick in without putting in itself i would expect them A to lose office and B never to be relected for a long long time as those that are savers would not forgive them so easy.
i would expect another SCF where the government would take over some of the banks bad liabilties and transfer them to a "bad bank" on the governments books
same as what has happened in a number of countries overseas

Gee - I think you're both trying to be optimistic on behalf of savers, but such optimism is misplaced.

The mechanism will work - it's designed specifically to avoid that "bad bank" scenario.

well "savers" are the ones choosing to offer _unsecured_loans_ to those institutions, so of course they will be the first ones to be losing a portion of their investment when the operation is troubled.

Isn't it funny how those who earn an income from property condemn a capital gains tax, because of its cost of administration and regard it as theft by grasping bureaucrats and politicians and yet they are prepared to condone such an unjust and punitive system of taxation, because they believe the poor must be compelled to work for fear of hunger and destitution.

any capital gains tax must be passed on as a business expense or built-in as a hidden business cost. thus the customer will end up paying it.

not sure what you saying "condones such an unjust and punitive system of taxation" - as most the "for huge EMTR" don't get their income from property but from large wages.

"and the poor compelled to work for fear of hunger and destitution."
again the property people are the ones shouting out against such things as CGT because that don't want that for the poor, and they see that the low prices they already set will be pushed up punishing the poor more than anyone else. Again it is the bigger salary people and those _supported_by_others_ including those whose revenue is by force (ie law) not by trade, who are the ones saying CGT is good and EMTR is necessary.

utter nonsense - capital gains tax must be passed on as a business expense

you think that the equity providers are going to just accept the reduced yield at surrender of their asset/inventory as some kind of social good? Either people will be willing to pay the new price, or it won't be worth selling.

Yes the high marginal tax rates are an issue and can disincentivise people from returning to the workplace - but why should people who can work and have work options not have to go and earn their living like everybody else - if the several hundred thousand working families mentioned on WTF and other supports took such an attitude- the country would collapse.

Again its about individuals taking responsibility for their own lives and obligations and not relying on the state to provide a handout - we are not talking people who would struggle to work either full or part time - but people who are choosing not to - there are thousands of vacancies advertised currently!

Like many - i studied full time and worked part time and when I gained my degree -Initially I was worse off after travel and clothes working than I would have been staying at home with my wife and two kids - but nobody is going to simply hand you a very high paid easy as job with a nice car and large house in a smart area! These are things that require HARD WORK, SACRIFICE, EDUCATION and EXPERIENCE.

And regarding the Table and your comment that arguably the net position may be little changed - that may be true purely from a financial perspective - But that does not measure the many gains in self esteem, confidence, skills, experience, networks, future prospects that are gained from being in work.

And in regards to the child being in childcare ( only up to 5 when they should be at school) there is a large amount that is free, subsidies for those in this sort of financial position and how is it any different from the thousands of Kiwi families with both parents working hard to try and get ahead

Key bailed out a finance company with 1.7 billion.
That's 1,700,000,000,000
I think that whatever the taxman is trying to claw back from the poor via eyewateringly high tax pales into insignificance.
Reserve your ire for those who deserve it.
Beneficiaries, it ain't.

I think there are 3 zeroes too many if you want to write 1,7 Bill. in numbers.

US billion has 9 zeros? UK billion, 12?...not sure about NZ? but I'd assume its the UK one.

yes, I used a million million, not a thousand million.
But I just looked it up, and we've all now adopted the short scale, apparently. So it should read a thousand million, not a million million.

lucky you for gaining your degree. Others of us did the hard work, experience, sacrifice, were leaders in our classes, and only ended up with student debt to show for it.

So how _did_ you fund your wife to stay home with young kids? How did you force her to cook food that was donated to you rather than let it rot, or feed the kid when she "didn't want to go shopping today"??

Thousands of vacancies.... well see, family is in Feilding - refuses to move - own a house here - so that limits to Manawatu/Palmerston North; unless I walk out on the family (that I just gave up a farming business after 6 years to spend some time with).
so ... lets see what I can do:

Chief Executive Officer - EquiP Ltd
Clinical and/Health Psychologist (needs degree)
Civil Maintenance (Physcial labour, Class 2 Truck & trailer license)
Service Delivery Manager (not too sure what this job is with all the corporate wank speak)
Transport Dispatcher (accurate understanding different vehicles&legal capabiltys 6am - 4pm, tue-sat)
Wanganui Collegiate - Cook (proven ability using commercial kitchen equip/food prep/pres)
Director/Whanganui Regional Museum (maori crap, work with iwi crap)
Laborer/Packers (must work public holidays, 12 hours shifts, weekends. no regular listed. yeah right)
Residential Sales Consultant ( good communicator,abilty to follow proven sales programme,selfstart)
Electrician (proven experience and quals)
Project Manager LNI(should need to point out why this one is not really unemploy/sickness bene)
Area Manager(Prev management in health&disab and/or relevant qualification)
Nurse Educator/Patient Support Nurse(Current Practicing Certificate)
Account Manager(proven sales record within building industry)
Food Manufacturing Operator(temporary,,8-12hr,could be 3am start,some weekend,on call)
Peer Support Kaimahi(minimum lvl4 Support/Mental Haelth and Addictions qual)
Project Manager - CRM(strong project management/analysis experience)
Flooring Sales Consultant(compelte sales process, proven track record in flooring, eye for colour etc)
Summer Events Delivery Team(not a role for faint hearted,physically fit,top communications skills, etc)
Coordinating Director-Center for Education Development(experienced strategic manager)
Sector Leader(Primary)(specialist knowledge and expertise in primary education,current registration)
Coordinating Director-Center for Educational Development(experienced strategic manager)
Sector Leader(Secondary)(specialist knowledge and exp Secondary Education, current registration)
Sector Leader(Primary)(specialist knowledge and exp Primary Education,current reg)
Sector Leader(Early Childhood Ed)(spec and expert Early Childhood,current reg)
Business Development Manager-Center for Educational(min 3yrs business dev, marketing, w/Ed foc)
Warehousing/Manufacturing Supervisor(proven experience lading&motivating teams, sound wareh)
Seeking 2nd year nursing students(not a 2nd yr nursing student)
The Factory Manager job("fresh bresh of air" person, good network and plugged into the community)
Business Manager(professional w/established credentials)
Sales Representative(proven experience within a sales role, ideally in building trade) x2
Senoir Structural Engineer ( yeah right )
Wanted!!!Alive and Hungry(HRV-direct sales, if you know these guys....)
CarlsJrPN-Ass Manager(developing leader empower&motivate,late nights, rotat roster,enjoy playing part in cohesive management team), "passion" for custoemr service

and so on
certified this or qualified that.
proven track record.
passion for team leadership or customer service.
great networking skills or team leadership experience/passion....

If we had that shit you think sickness/unemployed people would be looking on line??

Holy Mackerel.... My old Fujitsu Palmerston North job is advertised !

Gods that would be so cool to get back in with them, they are a great team.
Sure it's a temporary contract but I can live with that.

That is just so cool. (everyone say their prayers for me, since that means I'll have less type time here)

Are you being hoodwinked?

The Big Kahuna is back - Morgan's Universal Basic Income

Gareth Morgan was the first mover in his treatise for a Universal Basic Income - known as the Big Kahuna

Gareth Morgan has defined the narrative

Words are powerful - they affect the way we feel.
Stories are the way we humans make sense of the world, learn our values and form our beliefs. When we hear information we check to see if it accords with these beliefs and if it does not, we usually discard it.

Political parties use stories to obtain advantage.
For example, Donald Trump's focus on Mexicans entering the U.S. not only takes the focus off other more pressing issues but offers a ready made reason that suggests that preventing Mexican migration into the U.S. will solve all our ills.

In Australia, Tony Abbot did the same with his 3 word slogans "stop the boats" and "kill the tax".

With regads to the latter, the casualty was truth as the carbon tax was fully financially compensated for to every Australian and the rise in electricity prices was due almost entirely to the money spent on unnecessary wires and poles infrastructure. These facts were available but hardly got a look in in relation to the far more emotionally compelling slogans.

Now, here's the rub. The facts don't stand a chance against a compelling story, and
It is the first person to come up with that story or narrative that, thereafter, defines the discussion, including the limits of it, so that all information, including other "stories" based on other beliefs, are usually discarded.

When we encounter someone who has formed different beliefs according to their different values, that have been formed by different stories, we get locked into opposing sides in an argument.

The casualty of this situation is "truth".

It is the total silence in New Zealand on tax-avoidance by the multi-nationals that should be the narrative - but it's not - you should ask yourself - why not

It is the main narrative in Australia at the moment - and has been for some time
Here are the current affairs just from yesterday and today only

16 August 2015
Senate enquiry into Tax Avoidance

Channel 7 Investigation
16 August 2015
Video Starts at the 2 minute mark

Michael West 17 August 2015
Big Tobacco

Business Spectator 17 August 2015
multinational tax crackdown
Government to initiate a crack down on multinational tax dodgers within a month.

Note: crack-down within 1 month - what is NZ doing? - all the same culprits

Fancy that - big tobacco pays tax whereas the tech sector giants don't.

Benefits once use to be exactly that, a benefit and with responsibilities! My grandparents came from a generation who got almost nothing and expected nothing, to a society who ever needs to expand support to almost everyone and every thing (Companies)

If your $20 better off a week by working then your $20 better off. The human mind and body is far better off working than not - (does that come from our hunting and gathering background?) .

Mind you the faster and larger we can bleed this system, the faster it will collapse.

The benefit is a necessary response to the Gemstone file. Gemstone was implemented by the government of its day to stop employees having so much power in wage/union/condition negotiations.

At the time there were about 5 unemployed people (yes, five. not percent) in New Zealand, and they were that way from choice. but that didn't include women, who were classes as dependents at the time.

So it was decided to create a deliberate "unemployment pool" so employers would have choices in who they hire, and disgruntled employees couldn't be guaranteed to just walk out of one job into another just down the road.

The offshoot of that, if government creates a deliberate unemployment pool, those people in the pool would need to feed, house, and clothe themselves, so the unemployment beneficiary system was started.

Later it was Nerfed down to reduce the cost and "encourage" people to accept lower conditions and feel fear over job loss, by making it harder and lower income for being on the benefit, and conditions were instigated to ensure that those receiving a benefit were still begging for hiring.

>>> That's 1,700,000,000,000

That's $1.7 trillion. What are you talking about?

keep reading - I did correct my number further down

Is not National Super an implementation of the Universal Basic Income concept but just for the over 65's ?
Seems to work OK.

Seems to be a lot of benefit bashing on this thread. It's easy to criticise if you haven't been unemployed. I think you will find the majority of people on benefit don't want to be on it. my view is working for families should be wiped completely and taxes or gst should be lowered at the bottom end with a new top threshold over 100k to counteract any tax break for high earners. govt needs to attract business from offshore into the regions with a tax free business tax during initial year of startup.

this whole issue has more to do with jobseeker immigrants / cost of living / job opportunities than it does to do with bashing those on a benefit. It is not the easy ride many people think.

If u are on a benefit you still have job hunting costs. govt agencies could do a lot by helping to subsidise these expenses with appropriate evidence of these expenses as and when they occur

If rent wasn't so high there wouldn't be such a need for a lot of benefits. If the government were to build a whole heap of houses and push house prices through the floor, the poor, most middle class and the government would be much better off. But the rich would lose money so it won't happen.

"Government" eh?

how about you stick to spending _your_own_ money, mate.

You think that's a viable option to make those places available, do it off your own coin.
then get back to me.

This is old news, it has been evident for years, irrespective of which party was in Government that immediately preceding any tax cut, there would be a round of increases in Governmental price increases (registration, road mileage, licence fees etc) that effectively clawed back all of the gain from the tax cut, and a little more.

H*ly we really give people in NZ $700 a week after tax for doing nothing...that's like owning a $1,000,000 house and living off the rent after tax and expenses. Blows my mind!

Doesn't blow my mind at all. I was unemployed for a while and they would rather pay you that than train you for an available job. Even a short course was out of the question if your like over the age of 25. If you actually wanted to do a course they would stop the benefit and then your expected to try and live on the student allowance and pay for the course ! The result ? you just stay on the benefit. As pointed out by the time you factor in travel costs your better off not working.

I don't think you qualify if you have any assets. So you only get this amounting you rent.
Two guesses what your biggest expense is in that scenario?
We're subsidising landlords with that money.
Not the actual beneficiary.

means tested at $7000.
But you can have your own house if there's still a loan outstanding on it, the accommodation allowance then applies, with adjustments, to the loan repayments. No point forcing a sale and renting elsewhere but they do try to con people into doing so (because any cash reserve left over results in the means test kicking them off the benefit - poverty policy in play).

and no tenant or empty risk - and you can live almost anywhere in NZ you want.

getting a property portfolio that pays $700/wk net very much ties you to a spot.

that's why on a ROI point of view, social cost of benefits is very high in macroeconomic terms.
And likewise that is -why- I go on about reducing the cost of basic life is essential - the beneficairies and low income workers need to be able to exist on well under the equivalent of $1,000,000 investments. (add in the handling costs, for even more nightmares).
At the rate we're going NZ just isn't going to have a private local economy left to support such largess.

Stop complaining the tax rate on overseas savings account (like kiwi saver) is 100%.

Days to the General Election: 22
See Party Policies here. Party Lists here.