Child poverty reduction and wellbeing legislation

The purpose of recent child poverty reduction and wellbeing legislation is to encourage a Government focus on child poverty reduction specifically, and child wellbeing more generally.

This significant legislation was passed into law on 20 December 2018 with near unanimous parliamentary support. The Child Poverty Reduction Bill (which was divided into two bills at its final reading) became the Child Poverty Reduction Act 2018 and the Children’s Amendment Act 2018, helping to ensure enduring commitment to reducing child poverty and improving child wellbeing.

The Child Poverty Reduction Act

• The Child Poverty Reduction Act 2018 requires the government of the day to:
• set long-term (10-year) and intermediate (3-year) targets on a defined set of child poverty measures
• report annually on the set of child poverty measures
• report each Budget day on how the Budget will reduce child poverty and how the government is progressing towards its targets
• report on child poverty related indicators.

Measures

The legislation establishes a robust and balanced suite of measures that will track progress towards the targets, allow some international comparison, and provide a good picture of the impact of policy decisions on the lives of children.

There are four primary measures of poverty and hardship for which the Government must set targets:

• Low income before housing costs (below 50% of median income, moving line)
• Low income after housing costs (below 50% of median income, fixed line)
• A measure of material hardship (reflecting the proportion of children living in households with hardship rates below a standard threshold)
• A measure of poverty persistence (currently being developed, reflecting the proportion of children living in households experiencing poverty over several years, based on at least one of the measures above).

There are also six supplementary measures (see documents below for more information). These allow further international comparison, and ensure that trends at different levels of severity can be monitored and reported on. Governments are not required to set targets for the supplementary measures in the Act, but may choose to do so.

See the child poverty statistics for the year ended June 2018.

Targets

The Act requires the Government to set and review targets for child poverty reduction based on the four primary measures. The Act requires 10-year targets to be set, and 3-year intermediate targets that support the 10-year long-term targets.

In early 2018, the Government announced its targets for the three primary measures for which data is available:

Ten year longer term targets:

• Reduce the proportion of children in low income households (before housing costs*) from roughly 15 percent of all children to 5 percent – a reduction of more than half, from 160,000 to 60,000.
• Reduce the proportion of children in low income households (after housing costs*) from roughly 20 percent to 10 percent – a reduction of 90,000 children, from 210,000 to 120,000.
• Reduce the proportion of children in material hardship* from between 13 and 15 percent now to 7 percent – a reduction of 70,000 children, from 150,000 to 80,000.

Three year intermediate targets:

• Reduce the proportion of children in low income households (before housing costs*) by 6 percentage points by 2020/21 - a reduction of around 70,000 children.
• Reduce the proportion of children in low income households (after housing costs*) by 4 percentage points by 2020/21 – a reduction of around 40,000 children.
• Reduce the proportion of children in material hardship* by 3 percentage points by 2020/21– a reduction of around 30,000 children.

*Refer to the measures for more detail

The baseline year for these targets will be 2017/18, making the first set of three year targets due to be achieved in 2020/21. These targets will be formally confirmed in early 2019, once baseline rates for 2017/18 are released by Statistics New Zealand.

See the Child Poverty Reduction Act 2018.

Children’s Amendment Act 2018

Amendments to the Children’s Act (2014) require successive governments to develop and publish a strategy to improve the wellbeing of all children and young people, with a particular focus on child poverty and those with greater needs.

It will set out the desired outcomes for our children and young people and the actions to achieve them.  It will also clearly outline how progress can be measured and reported on so that we can all see the difference being made and where more work might be needed.

See the Children’s Amendment Act 2018

Find out more about the Child and Wellbeing Strategy

More information

The Child Poverty Reduction Bill's page on Parliament's website includes a link to the Bill itself, Supplementary Order Papers and a timeline of its progress through the House and Select Committee process.

Child Poverty Reduction Bill documents include a number of background documents related to the Child Poverty Reduction legislation, including the setting of child poverty reduction targets.

Prime Minister’s press release announcing the targets.