Friday, August 2, 2013

The new work bonus: bringing beneficiaries greater results

It's no secret that National governments have never had much affection for the welfare state, especially this one and its 1990s predecessors. Something about how looking after the vulnerable means people don't turn into thrusting, money-making entrepreneurs who create wealth and avoid tax. It is notable that after 30 years these entrepreneurial thrusters have not emerged in their dozens, and certainly not in sufficient force to provide decent well-paid jobs for their fellow citizens.

Not to be deterred by the bleeding obvious, this National government have over the last several years gutted the welfare system. This shredding of the social safety net has been marketed as concern for a nebulous group known as 'vulnerable children'. The government has never defined a 'vulnerable' child and has made this more difficult for itself by treating the measurement of child poverty as something of a joke.

Minister of Finance Bill English is adamant that reducing the incomes of the poorest will save the country squillions as the government works towards its goal of a balanced budget.

So it was somewhat surprising to see the Minister of Social Development in parliament on the 31st of July that saying that as a result of the reforms the government "would expect to get greater results for New Zealanders and their families". This is curious: I went to a talk given by a frontline community worker this week and she was firmly of the view that the results for New Zealand families she is seeing are the worst they have been since the early 1990s. Then there was the usual boasting about something called the "investment approach" which is, as far as anyone can see, about getting people into any sort of unsuitable job and ticking a few boxes. But mostly we were surprised to learn about something called "a new work bonus for those who choose to move into work sooner than required". Hot diggity dog! So why aren't feckless sole parents flooding into the streets to take up jobs flipping burgers till midnight?

Because the new work bonus is somewhat enigmatic. Oh yeah, and in keeping with this government's stingy approach to the poor, it's, well, stingy. 

The first thing we had trouble with was finding it in the latest Social Security amendment act. It transpires that it's not there. There's a raft of sections on stuff the government considers important such as drug testing beneficiaries but nothing about a work bonus. So we went to the WINZ website where we did eventually manage to find it hidden away in a dusty corner. According to the website, the relevant legislation is section 24(1)(d) of the Social Security Act 1964. But this section is a generic section concerning money payable from the Crown bank account, and was not amended under the 2013 amendment act. In fact section 124(1)(d) hasn't been amended since 1998. So for a layperson (ie most of us) the legal basis for this payment is unclear (although the Act does say "any money that may be appropriated by Parliament for the purpose of granting special assistance under any welfare programme established and approved by the Minister..." so that's probably good enough). But this also means if Paula or a future Minister changes their mind, it can be whipped away. But while interesting to a particular sort of legal mind, this begs the question of how much better off sole parents who go back to work before they have to will be. And the answer, gentle reader, is not much. Here's the rates (again from the WINZ website) (note this is a non-taxable allowance):
Sole parent support

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6
Sole parent $295.37 $195.37 $95.37 Nil Nil Nil

Supported living payment

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6
Single, 16 - 17 years $208.58 $108.58 Nil Nil Nil Nil
Single, 18+ years $257.75 $157.75 $57.75 Nil Nil Nil
Sole parent $338.60 $238.60 $138.60 $38.60 Nil N
Married, civil union or de facto couple (with or without children) $429.58 $329.58 $229.58 $129.58 $29.58 Nil

Each $214.79 $164.79 $114.79 $64.79 $14.79 Nil

Beneficiaries! Throw off the shackles of dependency, start working earlier than you might have otherwise, and reap the rewards! In the case of a sole parent that's enough for a couple of outfits from Slappers 'R' Us and a couple of weeks train fare in the likely event you have to commute.

But there's something else going on here.
Supported Living Payment is for people who are not able to work because they are:
  • permanently and severely restricted in their capacity for work because of health condition, injury, or disability or totally blind or
  • caring for a person who requires full-time care and attention at home.
In other words they are the ones least likely to find work or are already working looking after someone else. But fear not. This is not as pointless as it seems because an unremarked feature of the new Act is that work and other so-called social obligations not only apply to beneficiaries, they apply to their partners as well. Yes, it's all very nasty and has no policy justification; certainly this government has never produced any.

Will any of this make vulnerable children less vulnerable? We doubt it. Because none of it addresses the more fundamental issues of low income, lack of employment and, often, poor housing and transience. It's just another sign of how out-of-touch this government is with the needs of thousands of low-income New Zealand families and children.