Family Affairs

May 2010 - Benefits in the Spotlight

Benefits are in the spotlight again and major changes to several Acts are proposed. Children, Young Persons, and Their Families Act 1989, the Education Act 1989, the Income Tax Act 2007, the Social Securities Act 1964 and the War Pensions Act 1954. While no one doubts the need for change in today's fiscal climate, benefit cuts from the 1991 budget, and the hardship they caused, are still fresh in many people's minds. Beneficiaries are individuals with their own needs and requirements.

Many of the proposed changes will remove the words 'personal development' from the legislation which if interpreted correctly implies that the Ministry of Social Development need not take an applicant's personal circumstances into consideration when assessing an application for a benefit. Is this a correct interpretation of the proposed changes? If it is, why? Are applicants not to be assessed individually?

Raising the level of earned income allowed before affecting the benefit rate is a great step, but as this earned income is assessed by the gross amount earned and taxed as secondary income, the level of benefit entitlement leaves the beneficiary with less take home income and no better off. Is this going to be changed? If not, why not?

Ensuring every beneficiary who receives one of the targeted benefits undertakes training and is required to work a minimum of 15 hours a week is a big ask in today's post-recession climate and will require great commitment from employers and training providers alike. What incentives will be put in place to safeguard those already in paid employment who earn a higher income than those who will be training to join them in the workforce?

While the proposed changes will take time to target every beneficiary, help will be needed to ensure those same beneficiaries are not disadvantaged by the changes. How many long-term beneficiaries have appropriate clothing to join the workforce, the ability to maintain travel costs, childcare funding over and above the current free 20 hours being offered, especially during school holidays when more childcare hours are needed, and backup if a child is sick? Many unforeseen events can occur and safety nets need to be in place.

What happens to those who fail to meet the required conditions to continue to receive assistance. The suggested plan of attending budgeting sessions requires trained budgeters, In many places the waiting list for budget advice is long and pleas for more budgeters has been unheeded. Where will that help come from?

Many more staff will be needed on the ground. Training will be needed to understand the changes and give support to those affected by the proposed changes. Maybe those who have been there can have first option on those positions.