Other Income

Other income declared by recipients of a main benefit

People receiving a main benefit have historically been able to earn up to $80 per week (before tax) before their benefit payments are reduced. In addition, from 1 July 1996, clients receiving a Domestic Purposes Benefit, Widow's Benefit or Invalid's Benefit have faced lower abatement rates than clients receiving an Unemployment Benefit or a Sickness Benefit. This aims to give those less able to take up full-time employment an incentive to take up part-time employment.

The assessment period for the income test is:

• annual for Domestic Purposes Benefits, Widow's Benefits, Invalid's Benefits, Transitional Retirement Benefits, and income-tested New Zealand Superannuation or Veteran's Pensions (these clients may, however, elect a weekly income assessment)
• weekly for all other main benefits (unemployment-related benefits, sickness-related benefits, Emergency Benefits), and for all supplementary benefits.

In addition to the $80 per week (before tax) income exemption:

• people receiving an Invalid's Benefit can earn $1,040 per year of personal earnings (before tax) without having their benefit payments reduced (special conditions apply for people receiving an Invalid's Benefit because of blindness)
• people receiving a Widow's Benefit or a Domestic Purposes Benefit - Sole Parent who are paying for childcare can earn $1,040 per year (before tax) before their benefit payments are reduced
• people with a severe disability may have some or all of their personal earnings exempted from an income test.

As long as a non-qualified spouse is not included in their payment, people aged 65 years or over and receiving New Zealand Superannuation or a Veteran's Pension are not income tested or asset tested. All Veteran's Pension recipients aged under 65 years are, however, subject to an income test.

Clients not subject to an income test can earn other income without having their benefit or pension abated. Some supplementary benefits (eg Accommodation Supplement) are reduced when people receive other income. This may occur even if they are receiving a benefit or pension that is not income tested.

From 1 October 2004, people receiving a main benefit and an Accommodation Supplement have not had their Accommodation Supplement reduced due to the receipt of other income. Once clients receiving an Accommodation Supplement cease receiving a main benefit to enter paid work, however, they are liable to have their Accommodation Supplement reduced according to the amount of income they are receiving.

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Trends in the number of recipients of a main benefit who declared other income

Decreases since 2004 in the number of recipients of main benefits who declared other income (see table 2.20) reflect in part decreases in the number of main benefit recipients. Since 2004/2005, the proportions of working age recipients of main benefits declaring other income has decreased slightly (from 22% to 19%). Over this period, around 64% of those clients declared income of over $80 per week before tax.

Table 2.20 Trends in the levels of other income declared by recipients of a main benefit

Level of other income declared1	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
	Working age recipients of a main benefit2
Total working age clients not declaring income	243,294	227,146	221,793	207,365	208,380
Income declared3
$1.00-$39.99	12,787	11,618	10,632	9,565	8,813
$40.00- $79.99	11,918	11,055	10,255	9,451	8,588
$80.00-$119.99	13,605	13,468	12,548	11,233	9,894
$120.00-$159.99	7,484	7,306	6,947	6,195	5,863
$160.00-$179.99	3,022	2,868	2,714	2,575	2,245
$180.00-$199.99	2,852	2,811	2,610	2,548	2,580
$200.00 or over	14,398	14,194	12,800	12,077	11,954
Total working age clients declaring income3	66,066	63,320	58,506	53,644	49,937
Total working age recipients	309,360	290,466	280,299	261,009	258,317
	Other recipients of a main benefit2
Other clients declaring income3	1,143	1,330	1,391	1,436	1,555
Other clients not declaring income	9,618	9,593	9,551	9,124	9,100
Total other recipients of main benefits	10,761	10,923	10,942	10,560	10,655
	All recipients of a main benefit2
Total	320,121	301,389	291,241	271,569	268,972

Notes

1. Income per week before tax; based on last declaration effective in the year ended June. The income declarations referred to here may include income received over part or all of the year ended June, and may also include income received over parts of earlier or later years.
2. Numbers of clients recorded in SWIFTT as receiving a main benefit at the end of June.
3. Numbers of recipients of a main benefit with one or more income declarations effective in the year ended June.

Since 2004, the proportion of these benefit recipients who were receiving an unemployment-related benefit has decreased (from 21% to 7%), while the proportions receiving sickness-related benefits and Invalid's Benefits have each increased (see table 2.21). These changes reflect patterns in benefit use.

Table 2.21 Trends in the types of main benefit received by working age clients declaring other income

Type of main benefit received when income declared1	Working age recipients of a main benefit who declared other income2
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Unemployment-related benefits3	13,889	10,189	7,725	5,032	3,291
Carer's benefits4	26,068	26,229	23,753	21,790	20,235
Sickness-related benefits5	6,117	6,551	6,550	6,598	5,925
Invalid's Benefit	15,592	16,389	16,784	16,935	17,657
Widow's Benefit	3,942	3,589	3,298	2,901	2,558
Emergency Benefit	458	373	396	388	271
Total	66,066	63,320	58,506	53,644	49,937

Notes

1. Type of main benefit received at the time when the last income declaration effective in the year ended June was made.
2. Numbers of working age recipients of a main benefit with one or more income declarations effective in the years ended June. The income declarations referred to here may include income received over part or all of the year ended June, and may also include income received over parts of earlier or later years.
3. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to people in training, and Independent Youth Benefits.
4. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone, and Emergency Maintenance Allowances.
5. Comprises Sickness Benefits and Sickness Benefits - Hardship.

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