Working for Families put on trial

A key part of the Government's Working for Families policy will today come under attack in a legal challenge alleging the policy has failed to tackle child poverty.

After a six-year battle to be heard, the Child Poverty Action Group's complaint against what is now called the in-work tax credit will finally be argued in the Human Rights Review Tribunal in Wellington, in a landmark case which is set down for four weeks.

The group says the in-work credit of $60 a week breaches the Human Rights Act and the International Covenant on Civil and Political Rights by discriminating against people because of their employment status.

The credit is restricted to single parents who work at least 20 hours a week, and two-parent families who work at least 30 hours a week between them, where no parent receives any incometested benefit.

The Government plans to call six witnesses to defend the tax credit, including two experts at the Paris-based Organisation for Economic Co-operation and Development (OECD) who will speak by video link on similar in-work payments in other OECD countries.

Both sides of the legal argument are being funded by taxpayers - the action group's case through the Office of Human Rights Proceedings and the Government's defence through the Crown Law Office.

It is only the second time a law has been challenged in the review tribunal since Prime Minister Helen Clark's Cabinet made the Government subject to the Human Rights Act in 2001. The only other case was two weeks ago when the tribunal found that an accident compensation law barring rehabilitation to accident victims after age 65 was inconsistent with the Act.

The only legal remedy available is a declaration of ‘‘inconsistency''. The Government declined to allow courts to overturn laws as in the US and Canada.

Auckland University paediatrician Innes Asher will tell the tribunal today ‘‘diseases of poverty'' among children have increased as benefits to non-working parents have fallen further behind average wages.

Hospital admission rates for babies with bronchiolitis and children with serious skin infections both roughly doubled from 1990 to 2003, when the domestic purposes benefit plus family support for a sole parent with two children dropped from about 77% to 59% of net average earnings.

Payments to sole parents with two children recovered to about 60% of the average after the Working for Families changes in 2005-06, but hospitalisations for bronchiolitis and skin infections had fallen only slightly.

A Ministry of Social Development spokesman said there were still about 200,000 children in families on income-tested benefits on March 31 - 18% of all children. Child Poverty Action said more than 80% of children in beneficiary families were in sole-parent homes.

Prof Asher said poverty affected children's health in three ways:

- Nutrition, because poor parents could not afford good food, such as fruit and vegetables.

- Environmental factors, because poor parents could not afford to keep their homes warm and dry, with good fridges and washing facilities.

- Access to health care, because poor parents could not afford to take their children to doctors, especially after-hours.

The Government argues in initial response that while beneficiaries cannot get the credit, they usually still get more state assistance through the benefit system than working families who get the in-work credit.

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