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Working Towards Employment Amendment Bill

19 December 2001 Speech Notes

Social Security (Working Towards Employment) Amendment Bill first reading

Mr Speaker, I move that the Social Security (Working Towards Employment) Amendment Bill be now read a first time. At the appropriate time I will be moving that the Bill be referred to the Social Services Committee.

This Bill amends the Social Security Act 1964, an Act which has its genesis in the historic legislation of 1938, passed by the First Labour Government. In the spirit of that legislation, this Bill also seeks to provide security and independence. This Bill represents the second statutory instalment in the Labour Alliance Government’s development of a new approach to social security – social security through social development.

Mr Speaker, a social development approach means a fairer system. It means a simpler and more effective system. It means supporting beneficiaries to move into sustained paid employment.

Social development requires the Government to invest in people. It requires taking into account individual circumstances and family responsibilities. It requires a focus on long term sustainable social and economic outcomes.

Mr Speaker, this Bill, in line with the social development approach, makes changes to the Social Security Act in two main areas. First of all, the work-test for those on the DPB and Widows’ Benefit will be removed. This will be replaced with a new planning process. Secondly, changes are being made to benefit debt policy. Other smaller changes are also included.

Mr Speaker, this Government is committed to supporting families and children. The changes in this Bill are aimed at assisting parents who are bringing up children on their own. It is also aimed at those older recipients of the DPB and Widow’s Benefit who have spent many years caring full-time for others and are now on their own.

Mr Speaker, this Government is committed to tackling poverty and social exclusion.

We want to move away from forcing sole parents and former carers into low paid jobs that go nowhere and provide no more income than on benefit. We want to move away from an era of stigma and blame. They and their families deserve better. And they will get better from this Government.

In addition to the changes in this Bill, we will move progressively to “make work pay” by ensuring that people are always better off in work than on a benefit. We will ensure that the supports like childcare and education and training opportunities are there for people.

Mr Speaker, both parties who form the Labour/Alliance Government promised to remove the work-test for those on the DPB and Widow’s Benefit. This will happen on 26 August next year.

The work test fails to adequately support sole parents and former carers to get and keep a job. It is punitive, and it does not work.

I welcome debate on how best to support sole parents to improve their situation. However, the assumption that they lack motivation and have to be compelled to do paid work is false. Empirical evidence for New Zealanders and overseas tells me that sole parents are highly motivated and want to be financially independent. They see paid employment as the best means to achieve independence. International evidence through programme such as Britian’s New Deal for Lone Parents, the Australian Jet programme and New Zealand’s COMPASS programme show that enhanced case management is the best way to support their aims.

Over the past decade there has been a significant increase in the employment of sole mothers. This trend has been heavily influenced by a demographic changes and an improvement in labour market conditions. Removing the worktest will not reverse this trend.

Arbitrary tests based on the age of a child are as blunt as they are inequitable. Sole parents and former carers are a diverse group requiring different types and levels of assistance. Evidence shows that they will go back to paid work when they are ready. However, what counts as “ready” involves a whole range of factors such as work skills, experience, finances and family.

Some may be ready for immediate movement into training or paid work. Some may experience significant restraints due to their family and caring responsibilities.

Many are already doing a splendid job with minimal assistance, others are struggling and will require intensive, ongoing support.

Mr Speaker, social security through social development requires a flexible, responsive service for beneficiaries. We want to support them through difficult times and towards better times. We want to provide opportunities for them to move into sustained paid employment at a time that is right for them.

From August next year I will introduce enhanced case management for domestic purposes and widows beneficiaries.

This model of case management draws on similar successful models from the UK, Australia and the New Zealand Compass programme. These programmes have demonstrated that enhanced case management can be effective in supporting sole parents towards and into paid employment.

Mr Speaker, under this new approach, case managers will work alongside sole parents and former carers to help them identify their strengths and needs. The Work and Income service of the Ministry of Social Development will provide individually tailored assistance. There will be an emphasis on the case manager and the beneficiary working together to ensure that beneficiaries have the information and support they need to meet their goals.

Mr Speaker, this Government believes that while people are on benefit they should be planning for their future and building their skills and knowledge. From August next year, recipients of the Domestic Purposes Benefit and Widow’s Benefit will be required to plan for their future through the development of a Working Towards Employment Plan.

The planning process is not work-testing by another name. It is a goal setting process. It emphasises building personal capacity and accessing opportunities. It is about building human capability.

Each Plan will be different. Employment-related goals will be included when the time is right for each beneficiary. It will be the beneficiary’s Plan not Work and Income’s Plan.

This approach is not about what the beneficiary must do but about what they can do.

However, while the beneficiary decides the shape of the Plan, they will not have a choice about whether to plan for their future or not. This government is committed to providing more effective support. In turn, we expect beneficiaries to take advantage of the opportunities available. Those who persistently refuse to participate in the planning process will be required, in law, to meet their obligations to themselves and to the tax-payers of this country.

Mr Speaker, this government is committed to making work pay. We want more sole parents and former carers supplementing their benefit income through part-time work.

From August next year those on DPB and Widow’s Benefits will have a single abatement regime. For all these people income between $81 and $180 will be abated at only 30%- for some it is currently abated at 70%. This change will allow more beneficiaries to increase their paid work income and keep more.

Mr Speaker, this Government is committed to encouraging paid employment and reducing poverty. This Bill puts in place policies that prevent benefit debt, particularly for those entering employment. This change makes the system fairer and simpler for all beneficiaries.

The Bill provides for regulations to be made that will allow debts to be written off or debt recovery to be suspended to assist beneficiaries to move into and stay in sustained employment. Writing off debts or suspending the recovery of debts when a person moves into work is another way we will invest in people.

The Bill also makes it fairer and more transparent about when Work and Income can recover a debt if it has made a mistake. Following recent High Court decisions, debt recovery provisions in the Act will be extended to define the word “error”.

Mr Speaker, the Bill extends the scope of current debt provisions by explicitly preventing Work and Income from recovering a debt when the Service has not done the right thing. I believe that Work and Income should, as a matter of course, give beneficiaries correct information. Work and Income, should also, as it is obliged to do under the Act, investigate an application for a benefit and ensure that the person is given their correct entitlement. When Work and Income is at fault by not giving beneficiaries correct information or correct entitlement then that debt should not be recovered.

Mr Speaker, the Bill also makes changes to when payment of New Zealand Superannuation and Veteran’s Pension for a single person stops when the person dies. With this change there will be discretion to extend payment up to a further 4 weeks.

This Bill sets the scene for a social development approach to social assistance and social security. The changes in this Bill are about investing in people. They are about providing opportunities. They are about the Work and Income working alongside beneficiaries. They are not about telling beneficiaries what they must do and pushing them into low-paid dead end jobs. They are about helping beneficiaries to focus on what they can do to build a better future for themselves and their families.

Mr Speaker, I commend this Bill to the House.


At end of debate and after Bill has been read a first time:

I move that the Social Services Committee consider the Social Security (Working Towards Employment) Amendment Bill.

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