Sunday, June 19, 2016

Lindsay Mitchell: Free-for-all benefit system is untenable

Barrister Catriona MacLennan recently recommended improvements to the social welfare system via the current rewrite of our social security legislation. She wants to “…ensure all New Zealanders in hardship receive the help they need.”  The original intent of social security was to alleviate unforeseen hardship. Not self-imposed hardship. One in five babies  born onto welfare every year is not unforeseen hardship.

She wants “…the reduction of poverty [to be] the aim of social welfare, rather than the current focus on reducing the number of beneficiaries.”

Even Labour believes (or used to under Clark and Cullen) that paid employment is the best way out of poverty. That’s why they created the In Work Tax Credit. The correct “focus” is getting people into work to reduce poverty. Reducing beneficiary numbers is a by-product.

Next Ms MacLennnan asks that the bill recognize,”… the value of parenting.” Our welfare system “… is preoccupied with ensuring as many people as possible enter the paid workforce… a short-term approach [that] fails to take account of the long-term value to the community of parents spending time with their children.”

Fact: Children seen in the benefit system before age two account for 83% of all those with a substantiated finding of maltreatment  by age 5. More welfare will not equal better parenting.

Her next suggestion is suspending financial penalties for mothers who “…cannot name the fathers of their children …”  Docking their benefits punishes the children, she says.

Cannot is mostly 'do not'. Abolishing this disincentive would  increase the single parent benefit bill in two ways. By paying existing mothers who do not name fathers more money, and, going forward, recouping less money via child support from increasing numbers of unnamed fathers.

Deletion of the phrase "long-term welfare dependency" from the bill is the next demand. “This makes welfare a burden, rather than the responsibility of the community and an investment in the future wellbeing of New Zealanders.”

In other words, stop differentiating between those people who use welfare as a temporary stop-gap (for which they paid taxes) and those who remain on welfare for years, if not their entire working-age lives, as a matter of choice. Who does this protect?

The next recommendation for the bill requires Ministry of Social Development to provide all beneficiaries with all the assistance to which they are entitled. “Currently, people seeking help face major difficulties in obtaining their legal entitlements.”

But then MacLennan asks the government to, "Write into law a provision that grants, advances on benefits and other additional assistance are not recoverable by MSD from beneficiaries. If people were not in desperate need, they would not be receiving such help. “

Are they or aren’t they receiving help? Which is it?

Whatever the case, no requirement to repay grants and advances would be open slather.  Why not just issue every beneficiary with unlimited credit?

It gets worse. The new legislation should, “Stop sending mothers convicted of benefit fraud on the basis of a confusing and inconsistently-applied legal test to jail... In addition, if the debt established against them cannot be repaid within two years, it should be written off."

Let’s take stock.

No penalties for unnamed fathers, no repayments of grants and advances, no repayments of fraudulently acquired benefits, and no jail terms. Why not just throw the rule book out the window?

Finally the writer wants “…benefit rates liveable, rather than keeping them very low to punish those who cannot - for many reasons - either find or perform paid work.”

The average sole parent with two children living in South Auckland is receiving around $670 weekly – above the minimum wage. If he/she takes in a lodger or shares with another sole parent the household income will be even more "liveable".

Even the Greens wouldn't adopt MacLennan's policy prescription. It's utterly untenable.


Barend Vlaardingerbroek said...
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The trouble with the assertion that "paid employment is the best way out of poverty" is that all too often, paid employment is the way into working poverty.

As noted, the benefit package of $670 for a solo parent with 2 brats is way above the minimum wage, which is probably all most such people would be able to commandeer in the work force. I'm with Lindsay with respect to the overall case she is making, but these figures present us with a real-life paradox that we need to factor in.

Lindsay Mitchell said...
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Hi Barend

Couple of points. In the same situation but working, because of the In Work Tax Credit, the sole mum will always be better off in a job, if only slightly. But what really makes people financially better off is forming two-income partnerships. Getting into the workforce increases the possibility of meeting a new partner (and not one who is bumming around on the dole).

Anonymous said...
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Catriona MacLennan comes across to me as someone who despite here clearly high intelligence is driven primarily by ideology. Personally I take most things she says with a pinch of salt.

Anonymous said...
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So you can get a benefit for life, never have to repay a debt or suffer any penalty for committing a crime. Sounds like utopia. How many others has the author got to fund it?

Bob Culver said...
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We live in a crazy world. Those with exceptional ability can do very well, esp if unprincipled. For those in the middle it is a grind. For a reasonable life style the natural role of parenthood has to be postponed. Those with modest skills are doomed to tedious insecure work. Those at the bottom but possessed of logic have fathomed that breeding can ensure a life of certain support and secure housing without the tiresome burden of work. It is a huge dilemma. Reduced welfare supposedly punishes children. So these are effectively used as hostages. Easy welfare enables and encourages the disfunctional “families” as recently and regularly in the news to breed disproportionately. The situation does not promise a good future for NZ. Curiously deprivation and maltreatment seemed less prior to the DPB. My own family can trace back to a family brought up in the poor house in the 19th century. The draconian treatment seemed to do no harm; all developed into model citizens, unlike the products of todays welfare.

Dave said...
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Our future as a race and nation are doomed. Thousands of the least capable having large numbers of children, thanks to the big incentives being paid to the poorly educated, abusive, and ignorant, meanwhile here, as in most developed nations those who can afford children and provide them with a quality well educated upbringing are having fewer children in fact not even replacing themselves. End result we have a dumbing down of our nation, increasing massive social problems and a growing class of beneficiary's who will breed even more of a problem.

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