Unsupported Child's Benefit and Orphan's Benefit

Overview

Unsupported Child's Benefits and Orphan's Benefits are available to a caregiver aged 18 years or over who is not a natural parent, adoptive parent or step-parent and who is available to care for the child or children for at least 12 months.

These benefits are not taxable, but are income tested on any income the child receives other than personal earnings. The child is not work tested, and the child's caregiver is not income tested for these benefits.

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Eligibility for an Unsupported Child's Benefit and Orphan's Benefit

Unsupported Child's Benefit

An Unsupported Child's Benefit is available to the principal caregiver of a child whose natural, adoptive or step-parents are, because of a family breakdown, unable to:

• care for the child, or
• provide fully for the child's support.

Residency tests apply, and the child must be expected to be in the care of the client for at least 12 months.

Orphan's Benefit

An Orphan's Benefit is available to the principal caregiver of a child whose natural or adoptive parents can't support the child because they:

• are deceased
• suffer from a serious long-term illness or incapacity that means that they can't care for the child, or
• can't be found.

Residency tests apply, and the caregiver must intend to be the principal caregiver of the child for at least 12 months. No breakdown in the child's family needs to be established.

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Trends in the number of clients receiving an Unsupported Child's Benefit or an Orphan's Benefit

Increases since 2004 in the number of clients receiving these benefits (see table 4.5) largely reflect growth in numbers receiving an Unsupported Child's Benefit. Virtually all of the recipients of these benefits since 2003 were receiving an Unsupported Child's Benefit. Over this period, an increasing proportion of these clients were not receiving any pension or main benefit (55% in 2008, compared with 49% in 2004) (see table 4.6).

Table 4.5 Trends in the number of clients receiving an Unsupported Child's Benefit or an Orphan's Benefit

Benefit received at the end of June	Clients receiving an Unsupported Child's Benefit or Orphan's Benefit1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Unsupported Child's Benefit	6,682	6,908	7,125	7,205	7,439
Orphan's Benefit	369	371	377	382	334
Total	7,051	7,279	7,502	7,587	7,773

Note

1. Numbers of clients recorded in SWIFTT as receiving an Unsupported Child's Benefit or Orphan's Benefit at the end of June.

Table 4.6 Trends in the types of pension or main benefit paid to clients receiving an Orphan's Benefit or an Unsupported Child's Benefit

Type of pension or main benefit paid at the end of June	Clients receiving an Unsupported Child's Benefit or Orphan's Benefit1
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
Unemployment-related benefits2	386	300	239	172	133
Carer's benefits3	1,046	1,007	1,005	995	1,030
Sickness-related benefits4	318	341	360	369	311
Invalid's Benefit	648	713	671	692	747
Widow's Benefit	169	145	145	143	134
Emergency Benefit	166	197	223	215	129
New Zealand Superannuation	853	896	948	917	967
Veteran's Pension	12	17	13	12	16
No pension or main benefit	3,453	3,663	3,898	4,072	4,306
Total	7,051	7,279	7,502	7,587	7,773

Notes

1. Numbers recorded in SWIFTT as receiving an Orphan's Benefit or an Unsupported Child's Benefit at the end of June.
2. Comprises Unemployment Benefits and Unemployment Benefits - Hardship paid to unemployed people and to trainees, and Independent Youth Benefits.
3. Comprises Domestic Purposes Benefits - Sole Parent, Domestic Purposes Benefits - Care of Sick or Infirm, Domestic Purposes Benefits - Women Alone and Emergency Maintenance Allowances.
4. Comprises Sickness Benefits and Sickness Benefits - Hardship.

Table 8.1 shows trends since 1940 in the number of people receiving an Unsupported Child's Benefit or an Orphan's Benefit.

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Trends in the number of children covered by an Unsupported Child's Benefit or an Orphan's Benefit

Please note that the number of children covered by an Unsupported Child's Benefit or an Orphan's Benefit may differ from the number of clients receiving those benefits. This is because clients may receive these benefits for more than one child.

The number of children covered by an Unsupported Child's Benefit or an Orphan's Benefit has increased since 2004 (see table 4.7). Of the children covered by these benefits over this period, between 67% and 70% have been aged under 14 years.

Table 4.7 Trends in the ages of children covered by an Unsupported Child's Benefit or an Orphan's Benefit

Age of child at the end of June	Children covered by an Unsupported Child's Benefit or Orphan's Benefit1,2
	2004 Number	2005 Number	2006 Number	2007 Number	2008 Number
0-4 years	1,107	1,193	1,299	1,364	1,467
5-9 years	2,554	2,637	2,736	2,863	2,978
10-13 years	2,608	2,746	2,862	2,929	3,002
14-17 years	3,024	3,056	3,133	3,127	3,121
18-19 years	69	100	117	121	104
Total	9,362	9,732	10,147	10,404	10,672

Notes

1. Numbers of children recorded in SWIFTT as being covered by an Unsupported Child's Benefit or an Orphan's Benefit being paid at the end of June.
2. A client can receive Unsupported Child's Benefit or Orphan's Benefit payments for more than one child. Therefore, the number of children covered by Unsupported Child's Benefits or Orphan's Benefits paid at the end of June may not equal the number of clients receiving an Unsupported Child's Benefit or Orphan's Benefit at the same date.

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Trends in the proportion of children aged under 18 years covered by an Unsupported Child's Benefit or an Orphan's Benefit

Each year since 2004, around 1%of all children aged under 18 years in the New Zealand population have been covered by an Unsupported Child's Benefit or an Orphan's Benefit at the end of June (see figure 4.3) Throughout this period, 10-17 year olds have been more likely than younger children to be covered by one of these benefits.

figure 4.3 Trends in the proportion of children aged under 18 years covered by an Unsupported Child's Benefit or an Orphan's Benefit, by age

Note

1. Proportion shows:
   1. number of children in age group recorded in SWIFTT as being covered by an Unsupported Child's Benefit or an Orphan's Benefit at the end of June, divided by
   2. Statistics New Zealand final estimate of the resident population in age group at the end of June.

See table A3.15 for a summary of the SWIFTT data underlying figure 4.3

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Trends in Unsupported Child's Benefits and Orphan's Benefits granted

The number of Unsupported Child's Benefits and Orphan's Benefits granted each year has increased over the last year, after decreasing over the previous two years (see table 4.8). Of the clients granted these benefits since 2003/2004, around 56% have had at least one dependent child aged under 14 years, including between 32% and 35% with a child aged under 10 years.

Table 4.8 Trends in the age of the youngest dependent child cared for by clients granted an Unsupported Child's Benefit or an Orphan's Benefit

Age of youngest dependent child when benefit granted	Unsupported Child's Benefits and Orphan's Benefits granted1
	2003/2004 Number	2004/2005 Number	2005/2006 Number	2006/2007 Number	2007/2008 Number
0-4 years	563	605	593	614	698
5-9 years	487	502	465	471	527
10-13 years	753	767	706	646	792
14-17 years	1,465	1,403	1,380	1,346	1,605
18-19 years	4	1	2	5	15
Unspecified	0	0	1	0	0
Not Applicable2	5	11	7	11	11
Total	3,277	3,289	3,154	3,093	3,648

Notes

1. Numbers of successful applications for Unsupported Child's Benefits or Orphan's Benefits recorded in SWIFTT during years ended June.
2. Clients may continue to receive an Unsupported Child's Benefit or an Orphan's Benefit for a short period after the child in respect of whom the benefit was paid has left their care.

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Expenditure on Unsupported Child's Benefits and Orphan's Benefits

Increases since 1995/1996 in combined annual expenditure on Unsupported Child's Benefits and Orphan's Benefits (see table 4.9) largely reflect increases in the number of children covered by these benefits. Increases in expenditure in 1996/1997, 1997/1998, 2004/2005 and 2006/2007 also reflect in part the impact of adjustments to the core rates of payments of these benefits.

Table 4.9 Trends in combined annual expenditure on Unsupported Child's Benefits and Orphan's Benefits

Year ended June	Expenditure on Unsupported Child's Benefits and Orphan's Benefits1,2,3 ($m)
1995/1996	23
1996/1997	27
1997/1998	30
1998/1999	33
1999/2000	36
2000/2001	39
2001/2002	42
2002/2003	47
2003/2004	51
2004/2005	56
2005/2006	65
2006/2007	70
2007/2008	81

Notes

1. Expenditure on Unsupported Child's Benefits and Orphan's Benefits in years ended June, including expenditure on other supplementary benefits received by clients receiving an Orphan's Benefit or an Unsupported Child's Benefit.
2. Expenditure figures shown are adjusted to payment periods based on a standard 30-day month, and smoothed using a two-month moving average. Unsupported Child's Benefits and Orphan's Benefits are not subject to taxation.
3. Expenditure data in this table differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

The slight decrease in monthly combined expenditure on Unsupported Child's Benefits and Orphan's Benefits evident at the beginning of each calendar year (see figure 4.4) reflects a seasonal dip in applications in January, combined with ongoing cessations as children turn 18 years of age. The increase in April 2005 reflects a one-off $15 increase across all the payment rates which replaced the usual annual general inflation adjustment. A further $20 increase across all payment rates was made in April 2007, also replacing the usual annual general inflation adjustment.

figure 4.4 Trends in combined monthly expenditure on Unsupported Child's Benefits and Orphan's Benefits

Notes

1. Monthly expenditure on Unsupported Child's Benefits and Orphan's Benefits, including expenditure on other supplementary benefits received by clients receiving an Orphan's Benefit or an Unsupported Child's Benefit.
2. Expenditure shown is adjusted to payment periods based on a standard 30-day month, and smoothed using a two-month moving average. Unsupported Child's Benefits and Orphan's Benefits are not subject to taxation.
3. Expenditure data in this graph differs from, and should not be cited as, MSD's official measure of expenditure on financial assistance provided to clients.

Table 8.2 shows trends since 1940 in combined expenditure on Orphan's Benefits and Unsupported Child's Benefits, including expenditure on other supplementary benefits received by clients receiving these benefits.¹

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¹In Table 8.2, expenditure from 1996 onwards reflects deductions for debts established and for clients receiving overseas pensions as well as Unsupported Child's Benefits or Orphan's Benefits. These deductions are not reflected in the data shown in table 4.9 and figure 4.4

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