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Government proposal would penalise the poor

25 May 2006

Government proposal would penalise the poor

A Government proposal to assess the income of beneficiaries on a week by week basis could have devastating effects on the income of some of New Zealand's most vulnerable families, Green Party Social Development Spokesperson Sue Bradford says.

"Currently, those earning money over a short period of time from say, seasonal work, have the option of an annual assessment, which leaves their benefit largely unaffected. A weekly assessment though, would cut into their benefit while they are earning, and gouge a huge chunk out of their meagre overall income," Ms Bradford says.

"I thought we had made progress in recent years is recognising that vicious abatement levels stop people from seeking work. This proposal would turn back the clock.

"It would be a nightmare for people with variable earnings. If say, they make $4,160 from seasonal work, an annual assessment makes little impact, but an abatement regime based on that temporary weekly income of $320 a week would see $128 a week abated, taking out a huge $1664 amount over the entire period.

"At the very least, this measure would make a mockery of former Social Development Minister Steve Maharey's assurance that no one would be worse off as the Government shifts to a single core benefit," Ms Bradford says.

"We hear a lot of complaints about business compliance costs. This system would be worse. Beneficiaries would have to make a weekly declaration of earnings, have their benefits for the next week adjusted, and then re-adjusted back again to match the small fluctuations in their income.

"Similarly, this measure would tie up departmental staff in the processing of details, and that is bound to be far more costly than the amounts at stake. It would open the door to overpayments, underpayment and recovery costs. The better option would be to let the beneficiary continue to choose whether to have a weekly or annual adjustment.

"What we shouldn't be doing is forcing everyone into a one size fits all abatement scheme. Such proposals fore-shadow the bad outcomes we are likely to see more of, if the Government blindly pursues its single core benefit policy."


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