National’s welfare policy is hot air on a cold day – it won’t happen

National’s plan to get tough on 16-18 year olds will not happen – and listening to John Key defending the policy on Morning Report today I suspect Key actually doesn’t even believe that it will be implemented the way he would like. I don’t think it will be implemented properly at all – because most things can be done without a policy change and they are just not being done now.

What would help is if the Government was as loud on the desirability of intact stable two-parent families as they were on waving a stick at teen beneficiaries whom nobody wants to employ or train. Perhaps he could ask why WINZ has put these teens in the too-hard basket, along with those who have been receiving a benefit for 10 years.

Young sole parents would be required to be in work or training – but there are not enough work or training opportunities for the ones that have not got themselves pregnant or dropped out of school.

There are between 8500 and 13,500 aged 16 and 17 not in work, training or education – and of those about 4000 are on benefits. The policy costs at least $20m a year to implement, (that’s about a few hours of borrowing). That’s $5,000 per person if each person was assisted in the first year. If only a third were assisted that’s $15,000 a person – and that’s if they are not back on a benefit after three months because there is no job follow up.

Not even a third will be assisted. The policy won’t be targeted properly, therefore it won’t be implemented correctly. This policy is not about getting people into work or training - it is about getting few people off benefits without saying how that will happen, who is going to do it, how it will be implemented and if it will be evaluated. If a vulnerable pregnant teen was supported by her parents and didn’t need a benefit, do you think the WINZ or any other government funded group will help her find training or a job?

No they won’t – even though, legally, any teen 16 and over can register with WINZ as a job seeker and should get training opportunities if they want to skill up or get a get a job – even if they are not receiving a benefit.

All the significant matters – direct crediting power, pre-loaded payment cards, budgeting advice, obligation to look for work or be in training, training on literacy and numeracy, can be done now. If John Key thinks the current system is “abandonment” this that perhaps reflects the government’s attitude to these people – abandonment, with nice words.

My earlier blog post on this topic is here.

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Key's speech to the National Party conference

At today’s National Party conference, John Key flagged some changes (some of which weren't changes) he hopes will prevent 16-17 year old's going onto the unemployment benefit. Instead they will have jobs, education or training – and receive a copy of “Playground Battle” from the feelers, as it has the song “Stand Up”, the theme song from the conference.

Actually, they`ll miss out on the feelers – and the training incentive allowance. Some will miss out on most of their benefit too, as it will be put on payment cards that can't be used on cigarettes and alcohol( which they can't legally buy anyway). If they study part time, perhaps if they get accepted in a tertiary institute in a few years, they won’t get $1000 course-related costs, like I did when I was studying.

The Government is going to amend the Privacy Act and the Education Act to require schools to reveal when 16- and 17-year-olds leave during the year, and share this information between the Ministries of Education and Social Development. That is because it has no idea where 16-17 year olds have come from – mind you the MSD has no idea when people leave the country either and are paying thousands each week to ex-pats who they think are in NZ, but have never checked.

The government will also fund community and other organisations to provide comprehensive and concentrated support.

In fact the Government has been doing this for years through programmes like Training Opportunites – but while funded for training, it is measured on employment outcomes, so the policy design wasn’t the best as if they were fully trained and didn’t get work the outcome was less positive. But it is very similar to what Key announced today. Government funding would go to organisations to 'transition' in to work or training, perhaps by building skills or training, but assessed on employment outcomes.

The implication is that these teens do not have a competent adult in their lives to manage their money and to assist them to get ahead in life. So these support providers in community groups will be these competent adults, and in some cases will pay their bills from their benefits and help them get into education, training and work – or the Ministry of Social Development will do it.

Actually, the MSD can pay money for bills for young people directly out of benefits - So why isn’t it?

Further, young people who are receiving these payments will have clear obligations, for example; to attend budgeting or parenting programmes.

WINZ offers budgeting advice. Why aren’t these young people being referred to it? Why is National announcing policy that, in part, it can implement now, but isn’t to a significant degree?

Key says “you measure a society by how it looks after its most vulnerable. You also measure a society by how many vulnerable people it creates”.

Obviously, the more vulnerable people a society creates, the harder that society has to work to look after its most vulnerable. But if “competent adults” are to be place alongside vulnerable teens, God help us if these people are WINZ case managers or similar.

Key said we can’t continue to give young beneficiaries money and trust they will do the right things with it. That approach has not worked.

So can we trust WINZ case managers to do the right thing for all vulnerable teens on benefits, and offer budgeting advice, training opportunities, and bill payments out of benefits?

No policy or legislative change is necessary – just the ability to implement and evaluate it - and tweak it further. It appears they are doing the latter only.

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Why is the Government paying benefits to those who have left the country?

About 7400 are no longer receiving benefits after failing to reapply for their benefit after 12 months and the government is saying it is a $3.5m saving. ( update its a $9.5m saving now ). According to media reports:

Half of the people who were now off it did not reapply. Of the other half, 2000 were already in work, 1400 had left the county, were in study or failed the work test.

We don’t have any idea how many were studying or how many failed the work test as the Prime Minister didn’t say and nobody appeared to ask him.

But a lot of people must have been were getting benefits they were not entitled to - like the 1400 who had left the country, and WINZ apparently had no idea that they had left the country. It’s their job to have an idea.

If thousands didn’t reapply, should they have been getting it at all? Some were in work, some had left the country. If they had left the country three months earlier, who is the benefit being paid to before it is cancelled? If they were in work, are the overpayments going to be recovered?

In such cases, while WINZ should be told if there are changes that affect benefits, shouldn’t case managers be keeping tabs on their ”clients” to ensure they are paying correct entitlements, and cutting off benefits shortly after they go to work/overseas – not months later.

John Key said it could be assumed that the people who did not reapply were in work. Yet he has no idea how many of those who did not reapply were in prison, studying, formed a new relationship, or had left the country.

So this is not a $3.5m (or $9m) “saving” – this is merely $3.5m saving less overspending, less an undisclosed amount of unrecovered overpayments paid before the benefits were cancelled.

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Our hungry kids - and our selfish parents

Was watching this programme on Campbell Live where a beneficiary on $529 a week was spending not much more than $100 a week on food and didn’t have enough to feed his three kids. He didn’t send them to school some days because he couldn’t give them lunch as he had no food.

Yet not all parents who fail to give their kids breakfast are that hard up. I have kids. They get breakfast every day. They go to school and come home and tell me that many of their classmates don’t have breakfast.

It’s not that their parents can’t afford to give their kids breakfast, it’s just that they leave for work at 7.30am and drop their kids off to school and don’t want to get up earlier to give their kids breakfast.

So the kids miss out. And the parents no doubt have breakfast at work. This is unacceptable. It is also unacceptable that schools have to feed these kids when their parents either get Working for Families payments or are earning enough to get them over the cut-off threshold.

For parents who are on low incomes, it’s tough. Its even tougher on a benefit. But you can feed your kids porridge at about $50 every three months if you buy it in bulk. The biggest cost is the milk. If parents don’t want to do this for their kids to ensure they don’t miss out on breakfast – it’s called budgeting - there is something wrong with them. For those on benefits you can get a food grant from WINZ which will pay for nine month’s worth of porridge.

Kids should not go hungry because of parent’s poor choices. But they do. It is those parents who don’t have a choice that should get the assistance – such as the man on Campbell Live. Because he deserves it. In fact, if a lot more parents cared for their kids like this dad does,and fed their kids breakfast before work, our kids would be better off. But this man didn't appear to be applying for the assistance that is available from WINZ. He should.

And he doesn't eat porridge. But he does both need and deserve more support - and its good that he is getting it.

But none of it is from the government - its to make up for his substandard benefit income.

He even got a heater to heat his house. I'm so pleased.

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Anyone got any info on this?

If a person is getting ACC, and ACC decided that, as that person could work 30 hours a week they were no longer entitled to ACC, they’d be removed from the scheme.

So what if that person gets assessed by Work and Income as not being fit for work for 15 hours a week . He is eligible for the Invalids Benefit. The person goes on the Invalids benefit, and because WINZ has said he can’t work, he appeals the ACC decision that says he could ( at least, appeals the decision regarding accident related injuries. But he loses, because ACC’s doctors say he can work 30 hours a week, even though WINZ doctors say he can’t.

And what does this say about the ACC review process? The problem is that it is pretty hard to get information on these transfers as ACC has no details on what their former claimants end up, and WINZ have few details on where their Invalids beneficiaries were prior to going on an Invalids Benefit. This could be because many are initially transferred to the Invalids Benefit from the Sickness Benefit with no reference to having recently come off ACC.

I wonder how many people have been in this situation during the past five years? And how many are now being quickly transferred to Sickness Benefits to get assessed for part time work?

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Pushing those on the DPB to work

The NZ Herald reports:

A sole parent with three young children paying the $332 average rent for a three-bedroom house in Papakura would get $206 in family support and $165 in accommodation supplement on top of the $278 DPB, a total of $649 a week.

Lets assume that she could walk straight into a job.

What would happen if she got a job for 25 hours a week at $20 per hour, or $500 per week – by no means the minimum hourly rate.

Firstly, because she is working more than 20 hours, she'd get the in work tax credit. She’d get $500 ($407 net) a week in income. Her family support will be the same, her accommodation supplement would reduce just $5.00. But the $60 In work Tax Credit bumps up her income to $833.00 - an extra $184.00 per week .

Sounds good. But even if she get 20 hours free, she`ll still be paying at least $180 a week in childcare and after school care, assuming she has two preschoolers at the right age and one child who is at school - leaving her nothing extra to pay for transport to get to work and clothes to wear to work.

Would you work for about $1.00 extra an hour? If so, what would you do if your child gets sick? What would you do if you cant get 20 hours free childcare because your childcare centre doesn't offer it or your kids are the wrong age?

If she got a job for $17.50 an hour for a 40 hour week - that’s $700 ($562 net) - she`d get $110.00 accommodation supplement and the same WFF assistance – totalling $878.00. That is $229 extra than the benefit and allowances.

Even better. But after child care costs, an income of $36,400 would leave her less than $50.00 extra to pay for transport to get to work and clothes to wear to work.

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Was Foster even entitled to an advance?

Graham Foster's story in the Sunday Star Timesdoesn't tell the full story. He was refused a Work and Income grant to pay for a $50 pullover and a $140 pair of shoes. Instead he got an advance for the amount which he has to pay back at $3.00 per week. Any advances are supposed to be paid back within a 52 week period. But not this one. Still, Foster spent two years fighting the government through the courts, costing the taxpayer tens of thousands of dollars in legal fees.

The Benefit Review Committee decision of 2008 appears to be here, and was itself appealed. (The Court of Appeal's recent decision is here). Foster wanted a lump sum non recoverable payment and reviewed a decision to advance the payment. His excuse for applying for these items was that his old jersey had a hole in it and as he sometimes suffered from mild bronchitis he didn't want to catch a chill. He said he needed to wear specially constructed inner soles and good quality shoes and he said he needed to purchase Hush Puppy shoes " that better fitted the odd contours of my feet".

His budget indicated a deficiency of income over expenditure of $49.98 per week - and budgeted more than $87 a week on food . That's in 2008. We have four in our family and don't even spend double that each week. He also brought the Listener each week instead of reading it at the library for free. Although he wanted free shoes, the Social Security Appeal Authority noted that there is no specific provision in the Special Needs Grant programme for shoes. As Foster admitted that the items were needed due to to wear and tear, this was not an "emergency" as it was not unforseen. Clothes are expected to wear out, eventually. The authority said:

We are surprised to note that the appellant spends [$30 - inserted] per week on communication, apparently for cellphone, internet and fixed line charges. This seems particularly high for someone sharing accommodation. The appellant has not explained what his need for a cellphone might be. An allowance of $15.00 per week ought to be sufficient for telecommunications. We also have questions about the appellant's allowance for transport, optometrist and newspapers. It is surprising that the appellant can afford to buy the Listener and pay for an internet connection but cannot budget for [shoes]. We are not convinced that the appellant has a deficiency in his budget of $49.98 per week. We accept that the appellant's budget is tight but we consider that the appellant could have been expected to make provision for [shoes] in his budget.We are not satisfied on the basis of the evidence available that an emergency situation existed in this instance

But they did think it was fine for him to get an advance payment, even though he was able to make provision for it. In other words, the Committee considered that as Foster had an "immediate and essential need" he should be given a loan for the shoes and jersey, even though no emergency situation existed, and WINZ had no idea if he needed them because they apparently didn't ask if he had other jerseys and shoes he could wear.

So how did they know that Foster had an immediate and essential need?

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Some beneficiaries to get more money to study

Those receiving the Domestic Purposes Benefit, Widow’s Benefit, Invalid’s Benefit or Emergency Maintenance Allowance will soon be able to get an extra $500 of recoverable assistance - but only if they study as nurses, doctors, midwives, vets and teachers.

Putting aside the unlikelihood of an invalids beneficiary studying as a doctor, wouldn't it be better to get the maximum allotment of food grants instead? They are not recoverable either. I wonder how many will be studying and getting the $500, and not get any food grants because they don't apply for them when finances are tight.

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Off the dole - and back into WINZ

National is recruiting staff off the benefit and into case management because too many people are becoming unemployed. Of the extra 300 staff, 206 are to be focussed on "finding jobs" and the rest are going to be answering phones. Could that mean they are going to be case managers or work brokers. Because case managers are not focused on finding people jobs, they are focused on paying people money.

Last year there was hardly one work broker per WINZ Office. And those answering phones merely put people through to answerphones or make appointments for case managers. Ever tried to ring a case manager that actually picks up the phone? Case managers have appointments wall to wall every day. They are over-worked, under-trained, over-stressed and under-valued.

But most of those who are employed will not be focusing on finding jobs, as the media claims. They will be focusing on putting people into short term courses and the like - and some will be irrelevant courses that most beneficiaries will not want to go on, and will not benefit from.

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I worked hard, but I may lose my home

*** what do Labour's researchers do? ***
updated
Bruce Burgess lost his $750 per week job in the recession and was turned away from WINZ because his partner worked part time. She earns $21,000 a year. WINZ turned them away,and so they wrote to their MP who so happens to be the Prime Minister.

When he got the letter he reportedly flicked it off to Paula Bennett's office who did nothing.Then the Labour Party found out about it. Instead of checking the Burgess' entitlements and assisting them, Labour told the NZ Herald who wrote this story. On the surface, it needs to be fixed up because it is appalling.I spoke with the reporter early this afternoon and told him that the family is entitled to a partial benefit.

If they are earning just $21,000, WINZ was wrong to turn them away. They are entitled to register as job seekers through WINZ and are entitled to $91.20 a week in an unemployment benefit as well as possibly an accommodation supplement to assist them with their mortgage. Couldn't the Herald find that out? Depending on their mortgage they may be entitled to further assistance. I've relayed that info on to Keys office.

Given that Labour leaked this story, I'm wondering if its pixie researchers do any research. It's latest media release says that Burgess' wife's income disqualifies the couple from any temporary access to the unemployment benefit.

That's false. And Labour now know it.

update Burgess claims to own several properties, but is not receiving income from them. And I see that John Key has relayed the above in Parliament, and while I was doing this post the Herald updated its story. I spoke with the journalist and requested he do so because the facts of the story were incorrect given entitlement of a benefit on $21k.

update2 And Labour knew all along that the Burgesses owned multiple properties but apparently never told the Herald.

more here.

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Phil Goff's idiotic idea

Phil Goff wants the dole paid to people made redundant due to the recession even if their partners are working. He wants partners income to be disregarded in means testing.

To pay the full unemployment benefit to partnered redundant workers, the whole benefit system would need to be revamped as when an unemployed person with a non-earning partner gets the benefit, half the benefit is paid to the partner, and half to the unemployed person.

Here's what could happen within the current system: A person is made redundant. She earned $35,000 a year - about $670 a week - and does not live with her partner, who has the four children and earns $80,000. Both have separate bank accounts. Instead of getting the dole as at present, the couple move in together. Both get the dole, as the benefit payment is split between partners and into each bank account, and the newly unemployed woman no longer has to pay child support. Good idea, they think. As she is unemployed, Working for Families payments are paid through WINZ. If WINZ do not note the partner's income - because that will abate the benefit instead of waiving it - WINZ would also pay Working for Families payments - as she now has the kids - and the accommodation supplement to pay for the high mortgage.

They'd get about $500.00 extra each week. On top of that, if the unemployed person's bank balance went below a certain threshold, she could get food grants and advances to pay power bills as WINZ disregard the income of her partner.

A nice little earner to ride over the recession. And no childcare to pay too as the unemployed man can look after the kids while his wife works and collects the benefit.

But there's a downside to this arrangement. Guess what it is.

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Not exactly a luxurious life

I wouldn’t get too concerned that the government is planning to stick 7000 unemployed people into McDonalds. The scheme is over a five years period, equating to 26 per week on average. That is if the 7000 figure is reached. What if they only get 4000 into McDonalds – that’s about 15 per week.

And that is about how many people are being employed at McDonalds every week anyway, due to the high staff turnover. But this deal is not driven by a desire to get people work. It is driven by a desire not to pay so much money on benefits, as John Key explains:

When we spend a lot on benefits it means there are a lot of New Zealanders not really earning a lot. Life on a benefit is not exactly a luxurious life.

When lots of people work at McDonalds, it means there are a lot of New Zealanders not really earning a lot. Working at McDonalds is not exactly a luxurious life.

What if they were to offer a McDonalds fulltime position - 30 hours a week in WINZ language - to a main unemployed breadwinner with children? If they were to get $15.00 an hour, they`d get $450 a week ($23,400 a year), compared with a benefit payment of $18,850 a year before tax. That's an extra $87.50 a week.

Beneficiaries can earn $80.00 each week and retain the benefit. Effectively squared up. But the person in this example will be spending money on transport to get to work so he is worse off by working at McDonalds.

Would you do it?

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