Child poverty reduction measures and targets

The Child Poverty Reduction Act 2018

The Child Poverty Reduction Act establishes a framework for measuring and reporting on child poverty. The Government must set ten-year (long-term) targets against four primary measures, as well as three-year (intermediate) targets for tracking progress.

• Material hardship (the proportion of children living in households lacking 6 or more items on the DEP-17 material hardship index).
• Low income before housing costs (the proportion of children in households with disposable incomes less than 50% of the median in a given year).
• Low income after housing costs (the proportion of children in households with incomes less than 50% of the median income in 2018, after deducting housing costs and adjusting for inflation).
• Poverty persistence (the proportion of children living in households with less than 60% of the median household equivalised disposable income before housing costs are deducted (relative rate), in the current year and for at least 2 of the previous 3 years). The Act requires reporting on persistent poverty from 2025/26 onwards. 

The Act also establishes six supplementary measures of child poverty.

The Government Statistician is responsible for defining a number of concepts and terms under the Child Poverty Reduction Act.

See the Government Statistician’s definitions of concepts and terms.

“Reducing child material hardship” as a Portfolio Target

Of the various measures set out in the Child Poverty Reduction Act 2018 (the Act), material hardship is the one the Government is most focused on. This is because it is easy to understand, and is based on children’s lived experience of whether they have access to the basics.

To reflect this priority, the Minister for Child Poverty Reduction has established a Portfolio Target based on the Act’s material hardship primary measure.

The target is to reduce the child material hardship rate to 11% by 2026/27. This aligns with the current third intermediate material hardship target required under Act, agreed to by Cabinet. Achieving the target will lift around 17,000 more children out of material hardship by 2027.

The Government has also further reinforced a focus on “reducing child material hardship” by making it one of the three priorities for cross-government work identified in the Child and Youth Strategy 2024-27.

Targets

In 2019 the previous Government set ten-year targets for the three primary measures for which data was available at the time (before and after housing costs income poverty, and material hardship), along with the first three-year targets (for 2018/19 to 2020/21). The second set of three-year targets (for 2021/22 to 2023/24) was set in June 2021 and the third set of three-year targets (for 2024/25 to 2026/27) was set in June 2024.

Ten year longer term targets:

By 2027/28, the target is to reduce the rate of children in poverty to:

• 6% on the material hardship measure
• 5% on the before-housing-costs income poverty measure
• 10% on the after-housing costs income poverty measure.

See a copy of the New Zealand Gazette notice for the ten-year targets and first set of three year targets.

Third set of three year intermediate targets:

By 2026/27, the Government aims to reduce the proportion of children in poverty to:

• 11% on the material hardship measure
• 12% on the before-housing-costs measure
• 14% on the after-housing costs measure.

See a copy of the New Zealand Gazette notice text for the third set of three-year targets – 27 June 2024.

Progress to date on the ten year targets

Information about progress against the child poverty reduction targets can be found here.

Poverty persistence targets

Under the Act, the Government is also required to set three-year (2026-2028) and ten-year (2026-2035) targets.

In November 2024, the Government Statistician defined persistent poverty as the number of children living in before-housing-costs income poverty in the current year, and at least two out of the three previous years. To help the setting of targets, Stats NZ also published baseline estimates showing that, in 2023, about one in ten (9.4%) New Zealand children lived in households experiencing persistent poverty. Read the Stats NZ update here.

Rates were then set on 13 December 2024:

• For the first three-year (2026-2028) target period the target is set at 10% by 2028.
• This target recognises that persistent poverty rates are expected to climb in the short term due to the uncertain economic conditions. The rate has been set with the aim of keeping rates steady and preventing increases.
• For the first ten-year (2026-2035) target period, the target is set at 8% by 2035.

The intent is to review the persistent poverty targets again early in 2027 after the first official statistics on persistent poverty are published by Stats NZ and when a more up-to-date picture of the latest, official, rates and the outlook are expected.

See a copy of the New Zealand Gazette notice for the child poverty persistent targets.

See a copy of the press release about the setting of the persistent poverty targets.

Child Poverty Related Indicators

The Act also requires the Government to report annually on one or more Child Poverty Related Indicators (CPRIs). These are measures related to the broader causes and consequences of child poverty, and/or outcomes with a clear link to child poverty.

The CPRIs were first set in 2019. They were reviewed in 2022 and then again in November 2024. The five current CPRIs are:

The CPRIs are correlated with poverty in the here and now, and also focus on wider and longer-term drivers and consequences of child poverty over the life course. The CPRIs are aligned with the Government Targets that are relevant to children. They have been designed to drive cross-agency accountability for making a difference to the lives of children. They will be reviewed again in 2027.

See a copy of the Gazette notice for the refreshed Child Poverty Related Indicators as of 21 November 2024