We’re all going to be on the ‘benny’ eventually
Taxpayer-funded bureaucracy has a long memory, unlimited funding to fight a test case, and access to vast amounts of administrative data.
Every man, woman and child will one day be a beneficiary. Even if you manage to avoid the benefits system until age 65, applying for national superannuation brings you into contact with Work and Income, and many face the possibility of needing means-tested residential aged-care subsidies in their twilight months.
So it’s best to know something of the system on which you will depend on for money.
The Green Party’s benefits policy – including increasing core benefits by 20 per cent and ending the ‘‘punitive’’ sanctions and investigations it says have not worked – has put the welfare system in the spotlight.
Pensions expert and child poverty campaigner Susan St John believes most people no longer think of the benefits system as a mutually beneficial ‘‘social insurance’’ scheme.
She thinks that’s a mistake, because it’s not possible to take out private insurance against the kinds of misfortune that can lead to long-term dependence on benefits.
‘‘There’s been so much ideologisation and people are just so much of the view that you should stand on your own two feet,’’ St John says.
At the other end of the political spectrum is ACT, which finds it ‘‘unacceptable’’ that more than 300,000 people are on a benefit of some kind.
Its policy is for ‘‘a lifetime limit of three years for support under jobseekers benefit’’, with ‘‘income management’’ being applied to beneficiaries when those limits are reached.
Ask St John, or Vanessa Cole of advocacy service Auckland Action Against Poverty, whether the Work and Income bureaucracy can be gruelling and dehumanising to deal with.
The Ministry of Social Development says Work and Income is committed to ‘‘excellent service’’, but it no longer publishes its ‘‘customer satisfaction’’ survey, and advised Fairfax Media to file an Official Information Act Request for it.
It’s essential to know your obligations. A person who misunderstands benefit rules can sleepwalk into a serious problem.
One absent-minded professor from Victoria University, whose case came before the Social Services Appeal Authority, found himself branded a benefits debtor.
He was over 65, so despite still working, he was drawing NZ Super.
The trouble began when he headed off on study leave to Australia for a year.
The rules state that superannuitants can be absent from New Zealand for no more than 30 weeks, and during that time they will be paid NZ Super for only the first 26.
The authority did not believe the professor’s claim he was an elderly person suffering from Alzheimer’s, and ordered him to repay $6415.54.
Although most of the rules are clear for those who read them, and details are published on Work and Income’s website, St John says the regulations are sometimes ‘‘fuzzy’’.
She says one fuzzy rule being fought through the higher courts now is whether loans a beneficiary takes out can be counted as income during means-testing.
The woman at the heart of those proceedings has found herself subject to a lengthy and personally traumatic higher court test case, though she’s not accused of fraud as her case manager told her that loans were not considered income.
Taxpayer-funded bureaucracy has a long memory, unlimited funding to fight a test case, and access to vast amounts of administrative data.
The absent-minded professor was caught thanks to datamatching between government departments.
The system is also patient, and has the time to delve into people’s lives through asset tests, including looking back many years to check what money has been put into family trusts.
Underpinning the system is the requirement for repayment of ‘‘debts’’ – money beneficiaries were not entitled to.
St John believes the outcomes are not always fair. She points to ‘‘Kathryn’’, whose story was publicised by the Child Poverty Action Group. She was found guilty of benefit fraud, imprisoned, released, and then required to repay the $117,598.84 she had received from the benefits system (which does not round amounts to the nearest dollar).
She was judged by Work and Income to have been living in a relationship in the nature of marriage between January 1994 and November 1999. Had Work and Income known about the relationship, she would not have been paid the money.
The woman, who was raised in a loveless, abusive home, and lost a baby to murder by a partner, denied the relationship was in the nature of marriage, but the court decided it was, so she had to pay the money back.
Ensuring no-one is overpaid can result in tough outcomes.
On her release from prison Kathryn, who had a young, dependent child, faced recovery action from Work and Income.
The authority said: ‘‘If money obtained by fraud is not recovered it would be difficult to justify recovery of debt which has not arisen as a result of fraud. We agree with the submission made on behalf of the Chief Executive that if hardship to the beneficiary and her dependent child was a reason for foregoing recovery of debt incurred as a result of fraud then the integrity of the system for social support in New Zealand would be undermined.’’
In another authority case from June last year, a man found himself a debtor to Work and Income to the tune of $63,384.
The man had suffered a head injury at work, but had to scrape by on the benefit between September 2009 and January 2015 ‘‘while he pursued Accident Compensation payments’’.
When ACC accepted, the benefits had to be repaid. ACC reimbursed most, but despite his lengthy battle with one government bureaucracy while incapacitated, he found himself in a new fight with another. Work and Income wanted $16,281.34 back.
Cole says current benefits levels are insufficient to live on with dignity, and applauds the Greens’ proposal to lift them.
The system is set up to deliver the minimum level of benefits to which people are entitled, but as some entitlements – such as food grants – are discretionary, things can get complicated.
Case officers spend time listening to appeals for food grants, which may then go to a higher manager, and often to review, Cole says.
‘‘It often costs more money to go through the system than it would be just to give people what they are entitled to.’’
The scrutiny over people’s budgets can be minute, and on occasion, entire panels of experts can pore over someone’s low income and expenditure.
In one authority case, a man suffering from post traumatic stress disorder – no details were given – which left him with ‘‘severe hypervigilance’’ moved to a rural property because of the stress of living in a built-up area.
He paid $250 a week for a twobedroom house, but struggled to make ends meet, and wanted his benefits raised.
Several benefit reviews later, his meagre budget ($250 for rent, $34.61 for power, $18.46 for medicine, $17.38 for internet, $18.46 for travel, $4.15 for cellphone, $9.23 for funeral insurance, $34.61 for food, $23.07 to pay court fines, and $5.43 for WOF and rego) was scrutinised by the three-member authority panel.
It found the median onebedroom house rented for $192, and the man lost his appeal.