What is in-work poverty? The definition of in-work poverty In-work poverty can be defined in many ways; however, the NZWRI Research defines it as occurring when one or more person in a household is receiving wages or salaries for at least seven months out of a 12-month period, yet the household’s income is still below a pre-defined poverty line, i.e. the members of the household are experiencing poverty. In-work poverty prevalence is the proportion of working households that fall below a specific poverty threshold. In the NZWRI Research, in-work poverty was measured at a threshold of 60 percent of median household income before housing costs. A household2 was defined as being in poverty when their monthly net equivalised income (before housing costs) was below 60 percent of the median income poverty line as at March 2013. The concept of working poverty or poverty in working households In the NZWRI Research and in formal economic terms, we refer to the concept of in-work poverty. This is what many people refer to as ‘working poverty’, and what we refer to throughout this report as ‘poverty in working households’. It is important to note that poverty in working households is an experience, not an identifier. While it is often a life-long situation for many, it does not have to be and should not be. It is not an irremovable personal characteristic; it is the resultant outcome of a system that is failing to realise human rights for the most vulnerable in our communities. It is not a label to be applied to individuals or groups, but rather a phenomenon which indicates that something, or many things, are not working and a sign that significant structural and policy changes are needed in order to realise human rights and ensure human dignity. The experience of poverty in working households is avoidable. Poverty in working households can be alleviated and eliminated by adopting a human rights approach; failure to do so is a violation of our obligations under international human rights law. The problem of poverty in working households in Aotearoa New Zealand The NZWRI Research provided a detailed insight into the prevalence of in-work poverty in Aotearoa New Zealand and the characteristics of in-work poor households. The key findings of the NZWRI Research were that the overall in-work poverty rate in Aotearoa New Zealand was 7 percent before housing costs. In other words, amongst working households, the proportion of households in poverty was 7 percent as at March 2013. This was equal to 50,943 households. This figure was based on the calculation of a household’s income, which included government assistance such as the Working for Families tax credit (WfF) and Accommodation Supplement (AS). To assess the impact of these two income sources on the in-work poverty prevalence, the research modelled a scenario whereby WfF and AS were excluded from household income and found that the rate of in-work poverty increases from 7% to 9.2% without these two sources. This demonstrates the significant impact that these government assistance programmes have on lifting household income. The in-work poverty rate varies greatly across several demographic dimensions – for example, it rises to 12.3 percent for single-parent households and to 19.9 percent for two or more family households where only one adult is working. Single parents, children, Māori and Pacific people, ethnic minorities, households with low educational attainment, disabled people, and renters are more likely to be experiencing poverty in working households. He Urupare Tika Tangata mō te Pōharatanga ō ngā Whānau Whaimahi 3