Report: Education key to breaking poverty cycle

Report: Education key to breaking poverty cycle

A new report says work and education are the best escapes for up to 15 percent of New Zealand families permanently stuck in the poverty cycle.

The Heart of Poverty study from Maxim Institute looked into what leads families into poverty and what has been proven to help them break out.

Researcher Kieran Madden told Newshub educating children is the key to stopping intergenerational poverty.

"It transmits advantage across generations," he says.

"The longer families stay in poverty, the worse outcomes happen to them, so it's more difficult for them to get out."

Mr Madden says poverty simply comes down to not having enough money and is most often caused by the family income earners losing their jobs.

"Poverty is best understood as a relationship between resources and needs," he says.

"If family's resources drop or their needs rise, they'll likely be in poverty. In a market economy, income is how family's provide for their needs so more money is part of the piece of the puzzle."

The Minister for Social Development, Anne Tolley, says the Government recognises there is an issue surrounding children in hardship, but adds the numbers in benefit-dependent households has fallen by more than 42,000 in the past three years.

On the issue of income she points out that the Government was the first to increase benefits for 43 years.

"Beneficiaries with children have seen benefit rates rise by $25 a week after tax, with most families receiving on average $23 a week extra," says Ms Tolley.

"We've also increased Working for Families payments to low-income families not on a benefit."

The changes to benefits came into effect on April 1 and the minister says around half a million children will benefit.