New Zealand Part Time Employment
Let’s break it down. Part-time workers, already scraping by, face immediate deductions from their benefits when they earn extra income. Accommodation Supplements, vital income for those crushed by New Zealand’s extortionate rental prices, get slashed as soon as you declare income from your part time work. For those with even higher costs, Temporary Additional Support also vanishes, leaving workers no better off than if they’d stayed at home on the couch.
A 2024 report from the Child Poverty Action Group highlights how these abatement rates create a “poverty trap,” where low-income earners lose up to 90 cents of every dollar earned through work. It’s not incentive; it’s punishment, especially when you consider that all work has overheads that 10 cents in the dollar aren’t going to cover.
In 2024, the Child Poverty Action Group reported:
Children whose families receive a benefit as their main source of income (around 200,000 children), are four times more likely than other children to live in poverty (material hardship).
Poverty due to low benefit incomes affects families of all ethnicities, but due to systemic issues such as racism and ongoing colonisation it inequitably affects whānau Māori, Pacific families and families of Middle Eastern, Latin American and African (MELAA) ethnicities.
Benefit-recipient families with children usually do not receive sufficient income and entitlements to cover typical expected costs of living (see Figure 1below).
In public or social housing where rents are lower, a typical sole-parent family of three children is still receiving ~$107 less per week than they need to cover their typical costs.
Private rentals are much more costly; four-person model families paying market rent – one adult and three children, or two adults and two children – have deficits of hundreds of dollars a week: they receive around a quarter less income (~22% to~28%) than they need to cover typical costs.
Three of the four example families in the figure above are not in public housing: their income entitlements are so low that the system locks the families into severe poverty, below the AHC40 poverty line (i.e.the families are receiving less than 40% of the after-housing-costs (AHC) median income equivalised for their family type).
Even though the entitlements for the example family living in public housing are higher, they are not high enough: this family is still locked below the AHC50 poverty line (ie the family is receiving less than 50% of the after-housing-costs (AHC) equivalised median income).
Income inadequacy is particularly profound for couples receiving benefits – not only for the examples above, but in general.
Supplementary payments
It is likely that the data and research presented in Figure 1 under-estimates costs because some rents are far greater, and disability costs (and inadequate entitlements) are not included. Real-life indicators show that bills are increasingly tough for benefit-recipient families: new benefit advances – MSD loans for approved basic-need purchases – rose to over $90 million in the quarter to March 2023 for the first time ever, and totalled $345 million in the year to March 2023.
These loans then further reduce the money families have to pay their bills: weekly debt repayments are not included in the costs above and for many families these repayments are high, due to the chronic inadequacy of income support over many years. Nearly 10% of New Zealanders owe money to the Ministry of Social Development.
Working for Families debt to IRD is also common and rising. On top of this, many families also carry private debt involving high costs and interest rates.
Hardship assistance
Hardship assistance to benefit recipients – including non-recoverable special needs grants as well as the benefit advances discussed above –has been increasing every year and topped $900 million in the year to March 2023 for the first time. Yet this assistance is another very conservative indicator of the depth of the inadequacy of benefit incomes. These grants and advances are at the discretion of Work and Income, meaning the process does not guarantee dignity, discouraging people from applying. Moreover,not all who ask for hardship assistance are successful, and they face a significant power imbalance if they wish to challenge that decision.
Abatement rates
It is difficult for many families who have the capacity for paid work to enter into paid employment. Abatement (clawback) of benefits starts early ($160, equivalent to seven hours minimum-wage work) and is steep (30c to 70c per dollar earned), meaning families cannot attempt paid work without losing financial security.
We all know that rents are a national disgrace, and the government is only worsening the cost of living crisis. Auckland’s median rent hit $660 a week in 2025, with other cities not far behind. The government’s response? Funnel billions into landlord tax breaks while renters drown in debt.
These subsidies prop up a parasitic property market, ensuring workers need Accommodation Supplements just to survive. But dare to earn a bit more, and Work and Income yanks that lifeline away. It’s a deliberate catch-22: stay poor on a benefit, or effectively work to retain 10% of your wages, which is arguably illegal under the Minimum Wage Act 1983.
The rise in part-time work is no accident. Stats NZ reported in 2025 that part-time employment grew by 4.2% year-on-year, while full-time jobs stagnated. Unemployment, hovering at 5.1%, is the highest in years, with Māori and Pacific workers hit hardest. The Coalition’s “traffic light” welfare sanctions, outlined in National’s policy, bully jobseekers into any work...often low-paid, casual jobs without any security. This isn’t about jobs; it’s about slashing welfare costs by forcing people into precarious employment. The government knows part-time workers are less likely to unionise or demand better wages, which is keeping the labour market cheap and compliant.
Then there’s the repeal of Pay Equity legislation. The Fair Pay Agreements, scrapped in December 2023, were designed to lift wages in female-dominated, low-paid sectors like care work. The Coalition’s decision to gut them ensures wages stay artificially low, entrenching gender and ethnic pay gaps. A 2024 Minter Ellison report noted that 13 pay equity settlements had been reached since 2020, but without legislative backing, progress has stalled.
Worse, the government rammed through the Employment Relations (Pay Deductions for Partial Strikes) Amendment Bill under urgency in December 2024, a move Labour’s Willie Jackson called a “cynical” attack on workers’ rights. This bill, which allows employers to dock pay during partial strikes, weakens collective bargaining and keeps part-time workers’ wages suppressed. The hypocrisy is galling, particularly because National previously supported pay equity but now champions policies that widen discrimination.
This government’s agenda is clear: manipulate the vulnerable into part-time work, trap them in poverty with benefit deductions, and prop up a landlord class while wages stagnate. It’s a well-designed system of cruelty, dressed up as economic reform. The Coalition of Chaos isn’t just failing part-time workers; it’s actively screwing them over. We need a system that rewards work, not one that punishes it...and for that to be a possibility we will need a change of government.
