Govt to address relationship tests
When Leigh was made redundant after 19 years with her employer, she wasn’t sure what to do.
Her partner is self-employed and also facing a downturn in work because of Covid-19.
They have two young children and a mortgage.
Leigh, whom Stuff has agreed not to identify, said it seemed logical that they would be able to access Government support.
‘‘Devastated with the loss of my job and how we were going to pay the bills, I thought to myself ‘it will be all right, I shall seek assistance from the Government at this time of need’. Well, after speaking to a MSD representative I was advised I am not entitled to an out-of-work benefit.
‘‘My partner’s weekly wage before tax is about $450, so $1800 per month. Our mortgage is $770 per month. Food and toiletries for a family of four are $800 per month. How on earth would we be able to pay the rest of our monthly bills on the remaining $230? Keeping in mind my partner still has to pay taxes.
‘‘I am 40 years old, paid taxes all my life, and to be told this was shattering.’’
It’s a story that’s becoming more common – Wellington woman Michele Cairns said she was distressed to find there was no assistance available to her when she lost her job.
On Jobseeker Support, couples can only earn up to $90 a week between them before it starts affecting the amount that is paid.
A single person can earn up to $90 individually.
Changing the relationship rules was a recommendation made to the Government by the Welfare Expert Advisory Group last year, along with increasing benefit rates.
University of Auckland associate professor Susan St John said it was an antiquated policy that was out of step with modern work patterns and relationships.
A spokeswoman for Social Development Minister Carmel Sepuloni said entitlement to most benefits and social assistance was reliant on the ‘‘couple’’ unit of assessment.
‘‘Moving to an individual unit of entitlement would be very complex however it is something that is in our medium to long-term work programme.’’
Gareth Kiernan, chief forecaster at Infometrics, said the problems people were encountering were more a sign of a high level of housing costs rather than the structure of the benefit system.
Being a two-income household used to be a way to get ahead financially, he said, but it was now not a choice for most families. ‘‘The fact that everyone has gone down that path has meant that no one has ended up better off.
‘‘We’ve seen over the last 30 to 40 years that the increased prevalence of two-income families has contributed to the increase in house prices to the point where it’s virtually impossible for a first-home buyer to get into the market with just one income.
‘‘The combination of higher house prices and increased tenant ability to pay – due to having higher incomes – has also flowed through into higher rents, although obviously rents have not risen as far or as fast as house prices on average.’’
Government attempts to help had often increased the cost of living. ‘‘Specific housing assistance, such as the accommodation supplement, has typically resulted in higher rents over time. Other initiatives such as Working for Families have probably tended to push house prices up, ultimately leaving people more dependent on Government assistance to survive than they were before.’’
A universal basic income (UBI) could be a way around the problem, he said, although it could be difficult to implement.