An Auckland University researcher says low benefit rates are forcing the most vulnerable people into a poverty trap as they borrow from WINZ to pay for necessities such as school uniforms, utility bills and car repairs.
Law professor Hanna Wilberg says it falls well short of welfare payments providing for an adequate standard of living and a minimum level of participation in society, as recommended by the 1988 Royal Commission on Social Policy.
While WINZ has the option of making such loans non-repayable, in most cases they have to start being repaid straight away.
“If you get one of those grants this week, next week you start repaying it by deductions from your benefit, and every time you get one of those one-off grants a further weekly deduction to your benefit is added so every time you run out of money, from the next week you get even less,” Professor Wilberg says.
She says people should request the loans be non-repayable, or Government could treat them like student loans which are repaid when someone starts earning over a certain income threshold.
