While many students have already been scheming how they’ll spend the Government’s upcoming $350 cost of living payment, a caveat means that some students on a student loan will be ineligible to receive the payment.
In May, as part of this year’s Budget, the Government announced that every New Zealander who was earning less than $70,000 a year and was not on a benefit would receive a “Cost of Living Payment”. A total of $350 would be paid out to eligible students’ bank accounts in 3 monthly instalments by the Inland Revenue Department (IRD), beginning August 1.
In theory, almost every non-international student should be eligible for the payment – unless your Uni side hustle is managing a large multinational corporation. However, there’s a catch: you need to have had at least some formal income at some point between 1 April 2021 and 31 March 2022, whether that’s through a job, a student allowance or dividends from the trust fund
that you definitely “earned through your own hard work”.
That means if you relied on student loans to get by last year, and didn’t have a summer job or side hustle for whatever reason, you’re out of luck. The IRD’s website makes it clear using the example of “Aki, a student”: “If Aki’s only income for 2022 was the living costs from her student loan (no Student allowance received), she would not be eligible for the Cost of Living Payment. This is because she has no net income for 2022 and no requirement to get an income tax assessment or file an Individual income tax return - IR3.” This is even though someone in this situation would meet all the publicised eligibility criteria.
This strange requirement comes because the Cost of Living Payments are basically being processed as tax refunds. As the IRD has the newest, shiniest computer system of all the Government departments, having completed a multibillion-dollar upgrade in 2019, lots of Government initiatives are now being funnelled through it, from Covid support payments to fuel tax cuts. This, however, means that some people end up falling through the cracks – such as students who were only on student loans last year.
What can’t be blamed on tax computer loopholes, though, are the others earning under $70k who are explicitly excluded from the payments: beneficiaries and working under-18s. The Green Party have called these exclusions “punitive and unfair,” and in May called on the Labour government to expand the criteria. “Poverty is a political choice. No one should be struggling to pay the power bills or feed their kids in this country,” said Green Spokesperson for Social Welfare Ricardo Menéndez March.
Most international students are also excluded from the criteria (unless you pay taxes in New Zealand), but you weren’t really expecting the government to help any immigrants not arriving on a high- class investor visa, were you?