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Social Security Amendment Bill measures lack justification

13 November 2013

Proposed new measures in Social Security Amendment Bill lack justification, may breach international human rights obligations

Proposed amendments to the Social Security Act lack justification and may breach international human rights obligations, the New Zealand Law Society says.

In its submission to the Social Services Committee the Law Society raised concerns over aspects of the Social Security (Fraud Measures and Debt Recovery) Amendment Bill.

Under the changes, the spouse or partner of a beneficiary who has committed fraud will be liable for the full amount of money so obtained if they benefited, directly or indirectly, from the fraud knowingly, or ought to have known they were benefitting from the fraud. Proposed section 127A will make it a criminal offence for a spouse or partner to knowingly or recklessly benefit from a beneficiary’s fraud.

The Law Society’s Jeremy Finn says while there is no objection to proper accountability in relationship fraud, the amendment imposes a more stringent "ought to have known" standard on partners of fraudulent beneficiaries compared to those partners of other fraudsters.

“The Criminal Proceeds (Recovery) Act 2009 establishes a carefully considered regime for the recovery of benefits derived directly or indirectly from ‘significant criminal activity’. This proposed departure from the Act should be subject to careful scrutiny. No justification is apparent in the Regulatory Impact Statement for the proposed more stringent standard.”

He adds careful scrutiny is also required for proposed section 127A as there are already laws in place to deal with such actions, and the proposal represents a departure from the general principles of criminal law.

“There exist a number of options to penalise positive acts or intentional omissions by a fraudulent beneficiary's spouse or partner to assist that beneficiary to obtain a benefit or level of benefit by fraud or other offending, to conceal that offending or to launder money received.”

The Law Society’s Joss Opie says the Social Security Act currently gives the Ministry of Social Development discretion to whether welfare debt should be recovered. The Bill proposes to replace that discretion with a duty to take all reasonably practicable steps to recover debt. It also proposes that in some circumstances, MSD’s chief executive may disregard "relevant considerations" when recovering debt, including the effect of recovery on living standards.

This may impact on New Zealand’s compliance with its obligations under the International Covenant on Economic, Social and Cultural Rights and UN Convention on the Rights of the Child. These include an obligation to realise the right of everyone to an adequate standard of living including those on social welfare and their children.

“In the Law Society’s view, there would need to be very compelling justification for welfare debt recovery to take precedence over international human rights obligations and other relevant considerations. Such justification is not evident,” says Mr Opie.

The Law Society says it has been constrained in submitting on the human rights implications of the Bill as a consequence of the apparent redaction of the human rights analyses in the relevant Cabinet papers.


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