You can also download this submission guide as PDF.
Introduction
The Social Assistance (Future Focus) Bill has received a First Reading in Parliament and has been referred for submissions to the Social Services Select Committee.
You can speak up for every child's right to a fair go by making a submission against the Social Assistance (Future Focus) Bill. This Bill threatens our most vulnerable families, but you can tell the Government that beneficiary bashing has no place in this country.
Submissions close Friday 14 May 2010.
Submission format
1. Give your name, address, phone number and email address
2. State that you WISH TO APPEAR before the select committee to speak to your submission - you can always decline later. If you are not in Wellington, request to be heard in a city nearest you.
3. Give an indication of who you are (e.g. landowner, business owner, community group member, etc). If you represent a group, outline its purpose and how many members it has.
4. Clearly state your OPPOSITION to the Bill.
5. Outline your key concerns about the Bill clearly and concisely using examples.
How to submit
When you have written your submission you can send it directly to the Select Committee
OR send two hard copies to:
Committee Secretariat
Social Services
Parliament Buildings
Wellington
Help with your submission
If you have never made a submission to a Select Committee before, there is a useful guide here (PDF).
If you want to contact us for more assistance, email ivan [dot] sowry [at] parliament [dot] govt [dot] nz or phone 09 303-0172.
Overview of the Bill
This Government Bill proposes substantive amendments to the Children, Young Persons and their Families Act 1989, the Education Act 1989, the Income Tax Act 2007, the War Pensions Act 1954, but most significantly, the Social Security Act 1964.
The most significant aspects of the amendments are to introduce part-time work testing for domestic purposes beneficiaries whose youngest child is aged 6 or over and for sickness beneficiaries who are medically certified as being capable of part-time work. The Bill also provides that unemployment benefits expire after a year unless the beneficiaries make a successful reapplication.
The Bill removes the ability for the Ministry of Social Development and unemployment beneficiaries to negotiate Jobseeker Agreements - work test requirements will be imposed on a "one size fits all" basis.
It also:
- Provides for greater regulation, rather than discretion, in the provision of advance payment of benefit in instances of hardship.
- Increases by $20 the income abatement threshold for domestic purposes benefit and invalid's benefit, but fails to implement the National party's pre-election commitment to do the same for sickness and unemployment benefits.
Much of the Bill appears to be ideologically inspired by the National-led Government's "Work First" approach to welfare.
There is no evidence to suggest the Bill will actually achieve its stated goal of moving more people into work. When questioned in Parliament, the Acting Prime Minister could not provide even a ballpark figure for the number people targeted by these changes.
The Government's own Regulatory Impact Statement on the Bill says that there is no research available to quantify the effect of the changes, and that this prevents estimates from being made of the number of people who will move from a benefit to work as the result of the proposed changes.
The Green Party considers this Bill to be irresponsible legislation that is ideologically inspired rather than evidentially based, and that has the potential to adversely impact on some of New Zealand's most vulnerable citizens.
We therefore recommend that submitters OPPOSE the Bill.
Specific Concerns
Clause 13 - Interpretation
Clause 13 makes a number of changes to the Interpretation section of the Social Security Act 1964. In particular:
Clause 13(2) inserts definitions of "employment plan" and "work-tested domestic purposes beneficiary" into the Act. "Employment" plans replace "personal development and employment plans" for non-work-tested domestic purposes beneficiaries. These definitions reinforce the "unrelenting focus on work" approach taken by the Bill, and will work to deny single parents the choice as to what extent they chose to balance their parental responsibilities with those of paid employment.
Work-testing domestic purposes benefit
The definition of "work-tested domestic purposes beneficiary" provides that a domestic purposes beneficiary will be work-tested if his or her youngest dependent child is aged 6 years or older.
The Government's argument, although not well articulated, appears to be that forcing sole parents in this category into part-time work is a "stepping stone" towards them becoming financially independent of the benefit system.
This provision is similar to one that was introduced in 1999 for domestic purposes beneficiaries, but repealed in 2003. Following the 1999 work-testing reforms there was an initial, but small, reduction in domestic purposes beneficiary numbers.
However, further and more substantial reductions continued to occur following the repeal of the work-testing regime, through until 2008-2009, when numbers began to increase again as the labour market deteriorated consequent upon international economic recession.
This would indicate that domestic purposes beneficiary numbers were responding largely to macro-economic conditions, and that the work-testing regime had little impact in the period between 1999 and 2003 when it was in force.
The Ministry of Social Development admits as much in its Regulatory Impact Statement (linked above).
However, there are a number of potentially negative implications of work-testing domestic purposes beneficiaries whose youngest child is aged 6 or over:
- The policy denies choice to parents as to how, or if, they balance their childcare responsibilities with paid employment. The Green Party believes that parents themselves are in the best position to make this decision. However, this Bill will deny parents that choice if they are in receipt of a domestic purposes benefit. They will be required to work 15 hours a week, if such work is available, whether or not they consider this is in the interest of their child (ren).
- Many parents will find it difficult to obtain quality and affordable childcare, particularly during school holidays when they will still be expected to be working but their children will not be at school. There are significant risks to child welfare of children being left "home alone" under the policy that were identified in a 2002 evaluation of the 1999 reforms (PDF, page 51). That evaluation recommended that further research be undertaken on this risk, but it appears that it has not been prior to the introduction of this Bill to reinstate the work-test.
- The "work first" approach, coupled with the abolition of Training Incentive Allowance for tertiary education, risks parents being moved off domestic purposes benefit into lowly paid, temporary, and/or casual employment to satisfy the work test. This is likely to increase labour market churn, with negative implications for both employers and the individuals concerned who are forced into such employment.
- For a new applicant for domestic purposes benefit whose youngest child is already aged 6, the work test will kick in upon the grant of the benefit. A separation is often a traumatic time for parents, with issues such as relationship property and childcare arrangements to be negotiated, and the requirement to look for work immediately on separation will add to the stress that such newly separated people face. Furthermore, in the cases of widowers, who are not eligible for widows benefit so will be applying for domestic purposes benefit if they have childcare requirements, the work test will kick in within days of their partner's death.
Clause 13(7) amends the definition of "part-time work-tested beneficiary" (who are required to work or seek work of up to 15 hours a week) to include work-tested domestic purposes beneficiaries, and Clause 13(8) repeals the definition of "personal development and employment plan". Clause 13(10) extends the definition of "work-tested benefit" to work-tested domestic purposes beneficiaries.
Suggested action: Submit in opposition to Clauses 13(2), 13(7), 13(8) and 13(10).
Benefit abatement
Clause 13(5) amends the definition of "Income Test 3". This is the income test that applies to unemployment benefit and sickness benefit, as well as to New Zealand Superannuation when an applicant includes a non-qualified partner in their NZ Superannuation entitlement.
Prior to the 2008 election the National Party pledged to relax the income tests for benefits so that all income less than $100 a week was exempt from income testing. Clause 13(5) breaches that pledge, by retaining the current income testing threshold of $80 for unemployment and sickness beneficiaries. The result is that all unemployment beneficiaries who earn $100 a week or more will be $14 a week worse off than if the Government had fully implemented its pre-election pledge in this regard. This will not only impact negatively of the personal finances of unemployment and sickness beneficiaries who work part-time, but will act as a disincentive for them to undertake additional part-time work.
Suggested action: Submit Clause 13(5) should be amended to extend the income exemption of $100 before benefit abatement commences to unemployment and sickness benefits.
Work-testing sickness benefit
Clauses 13(11) to 13(14) amend definitions to provide for the work-testing of sickness beneficiaries. The negative implications of work-testing sickness benefit are discussed in this guide under the commentary on Clause 15 below.
Suggested action: Submit in opposition to Clauses 13(11) to 13(14).
Clause 14 - Domestic purposes benefits for solo parents
Clause 14 amends section 27B of the Social Security Act to require that a domestic purposes beneficiary who is work-tested is required to comply with the work-test introduced under Clause 13 above as part of his or her entitlement conditions.
It is of note that no similar work test is proposed to be introduced for the analogous widow's benefit. This is discriminatory, and according the Attorney-General's NZ Bill of Rights Act report on the Bill, clauses 13 and 14 operate together to be unjustifiably inconsistent with the NZ Bill of Rights Act 1990.
Suggested action: Submit in opposition to Clause 14.
Clause 16 - Sickness beneficiary may be required to comply with work test
Clause 16 inserts a new section 54DA into the Social Security Act to provide that sickness beneficiaries may be work-tested for part-time work. This appears to be a knee-jerk response to increasing numbers of sickness beneficiaries, but as the Regulatory Impact Statement (linked above) reveals, there is no evidence that it is likely to be successful in reducing sickness benefit numbers.
A similar approach was taken in Australia in 2006. An evaluation in 2008 (PDF) revealed it was spectacularly unsuccessful reducing Australian disability support pension numbers:
"Although eligibility requirements for entry to Disability Support Pension were tightened, no significant change in the number of people who commenced Disability Support Pension occurred during 2006-07."
In March 2010, the Australian Minister for Families and Community Services, Jenny Macklin, said "The big stick approach had no impact on the number of people on disability support pensions. In fact, the numbers kept going up. It was a simplistic approach to a complex problem."
The Australian experience would suggest that work-testing sickness beneficiaries is unlikely to achieve its objective of reducing the growth in sickness benefit numbers.
Furthermore, the work-testing of sickness beneficiaries could have significant negative impacts:
- It assumes a medical assessment of an individual's capacity for work will reflect the reality. However, medical assessments are snapshots at the time of the assessment, and many medical conditions impact on the ability of an individual to work to an extent that fluctuates day to day or week to week.
- The assessment will, on occasion, be done by a "designated doctor" who does not know the person being assessed and has no ongoing knowledge their medical history other than what appears in file notes that may be supplied.
- The review and appeal process is intolerably slow for anyone who considers they are unfit for work he or she has been assessed as capable of undertaking.
- For some sickness beneficiaries, particularly those with mental health conditions, the added stress of an expectation to look for work, under threat of sanctions such as reduction or loss of benefit, is likely to be detrimental to their health.
- There will be reluctance among employers to employ people with poor employment records due to ill health or disability. Many of those who are employed are likely to get only often casual and/or temporary work, so their work test obligations will be ongoing.
Suggested action: Submit in opposition to Clause 16.
Clause 17 - Independent youth benefits: obligations
Clause 17 removes the requirement for the Ministry of Social Development to negotiate activities that an independent youth beneficiary may be required to undertake, and replaces this with a provision permitting the imposition of such requirements.
This appears to be a "one size fits all" approach, which, given the heavy caseloads of case managers, is likely to result in decisions being made without taking into account the individual circumstances of the beneficiary.
Suggested action: Submit in opposition to Clause 17.
Clause 18 - Substitution of "employment plans" for "personal development and employment plans"
Clause 18 repeals the definition of "personal development and employment plan" and substitutes a definition of "employment plan". This reflects the "work first" approach that underpins this Bill. It removed the goal for such a plan of "supporting the economic and social participation of the beneficiary who developed it".
Again, this is a "one size fits all" approach that does not recognise that for some domestic purposes beneficiaries, particularly those with particularly young children or children with serious impairments, a priority of preparing for employment may not be appropriate.
Suggested action: Submit in opposition to Clause 18.
Clause 25 -Expiry and re-grant of unemployment benefit
Clause 25 inserts a new section 99AA into the Social Security Act. This provides that all unemployment benefits expire twelve months after grant, and that the beneficiary must reapply and participate in a comprehensive work assessment to be re-granted an unemployment benefit.
The Green Party accepts that unemployment benefit is the one benefit that should be rigorously work-tested. However, we consider that twelve months is far too long before a requirement for unemployment beneficiaries to undertake a comprehensive work assessment is undertaken. The employability of a person who has been on unemployment benefit for twelve months will already be severely diminished.
The reapplication process will involve increased form filling and processing, and ironically, the comprehensive work assessment requirement after twelve months could have the unanticipated outcome of diminishing the efforts of case managers to support unemployment beneficiaries into work at an earlier time.
Furthermore, the reapplication process will result in a mandatory stand-down period being imposed if the beneficiary does not reapply within 20 working days after the expiry of his or her benefit but subsequently shows he or she still qualifies. This can result in beneficiaries being penalised if their reapplication is late as a consequence of administrative mistakes not of their making - for example if the notice requesting them to reapply gets lost in the mail or is not passed on to them by a flatmate.
Suggested action: Submit in opposition to Clause 25.
Clauses 26, 27 and 28 -Further provisions regarding work-testing
Clauses 26, 27 and 28 are further consequent on the "work first" approach that this submission guide rejects for the reasons described above.
Suggested action: Submit in opposition to Clauses 26, 27, and 28.
Clauses 31, 32, 33 and 34 -Sanctions for work test failures
Clauses 31, 32, 33 and 34 modify the sanctions provisions for work test failures. The penalty for first failure is ameliorated from suspension of benefit to a reduction of benefit to 50% of the main benefit level. This has some merit in the case of unemployment benefit as a complete suspension of benefit until recompliance is unduly harsh, particularly in cases where the failure may result from a misunderstanding of what the work test obligations actually are.
However, these Clauses extend the sanctions regime to work-tested domestic purposes beneficiaries and sickness beneficiaries whom, for the reasons explained above, the Green Party considers it is inappropriate to work-test at all.
Suggested action: Submit in opposition to Clauses 31, 32, 33 and 34, while noting that these Clauses would have some merit if confined solely to unemployment benefit.
Clauses 37 -Sanctions for work test failures
Clause 37 permits the Governor-General by Order in Council to make regulations relating to advance payment of benefit.
Currently the provisions relating to advance payment of benefit are discretionary under section 82(6) of the Social Security Act. The removal of that discretion by the imposition of regulations is likely to reduce the flexibility of the advance payment of benefit provisions to meet the individual circumstances of beneficiaries in immediate financial need.
Suggested action: Submit in opposition to Clause 37.
