Do sticky child poverty numbers call for a stronger approach?

Relative poverty is experienced when households have an income significantly below that of their peers, relative to the number of people in a household. Absolute poverty measures whether a child (or a household) has access to an essential good or a service, and whether the reason for that lack of access is related to income.

Under the 2018 Child Poverty Reduction Act (CPRA), the government is required to collect and publish data on child poverty. There are three primary measures used by the government to assess if it is achieving its targets for reducing the incidence of child poverty:

• Low income before housing costs (BHC): Children living in households with less than 50 percent of the median equivalised disposable household income before housing costs are deducted
• Low income after housing costs (AHC):  Children living in households with less than 50 percent of the median equivalised disposable household income after housing costs are deducted
• Material hardship: Children living in households that experience material hardship, which is defined as having a DEP-17 score of six or more out of a list of 17 essential items. The list includes items such as not being able to afford two pairs of shoes or home contents insurance, going without fresh fruit or vegetables, postponing or putting off visits to the doctor or dentist, being unable to pay electricity, gas, rates, or water bills on time in the past 12 months, or borrowing from friends or family to meet everyday living costs. 

The data used to generate child poverty statistics is derived from the Household Economic Survey (HES). This survey of about 19,000 households around New Zealand is weighted to reflect the general population. The data comes with a margin of error, which makes establishing definitive facts about child poverty levels difficult.

However, Statistics NZ is required to assess if the government is achieving its targets for child poverty reduction. 2024’s child poverty release was the first time that the government was judged to have missed its targets on all three measures. This 2024 release includes annual financial data for the years ending June 2023 and June 2024. 

In 2024, 17.7 percent of New Zealand’s children lived in households with low income after housing costs. This number fell between 2015 and 2022, but for the past two years it has trended higher. This is likely to be partly a response to higher costs of living and higher rental costs. 

In 2024, 149,900 children (12.7 percent) lived in households with low income before housing costs. Similar to the after-housing cost data, this measure improved between 2015 and 2022, except for an unexplained spike in 2018, before getting worse again from 2022-2024. Over the past two years, the trend has reversed again, showing a further decline. As a result, child poverty has regressed to levels seen in 2020 or 2021. 

In 2024, 156,600 children (13.4 percent) lived in material poverty in New Zealand, representing one in seven children. This is the highest number since 2015, when one in six children (17.5 percent) lived in material poverty.  In the 2022 financial year, one in 10 children (120,300 children) were estimated to be living in material poverty. 

Material hardship is particularly prevalent in Māori and Pacific Peoples households, where close to one in four and one in three children, respectively, were recorded as living in material poverty in 2024. Child poverty rates were also higher in households where a disability was registered, with one in four children living in material poverty. This makes disabled children, or children living in a disabled household, almost twice as likely as non-disabled children to live in material hardship. 

Children living in households in material hardship, June 2024 (%) 

After six years of the government actively working towards reducing child poverty in New Zealand, with little statistically significant change, the government should consider stronger and more targeted measures to address the material hardship too many families are facing. The current economic plan for continued austerity is unlikely to ease the financial pressure on families. Striving for economic growth via increased immigration targets and reducing business compliance costs is also unlikely to ease the financial pressure on families or lift children out of poverty.