Women, Māori beneficiaries paying back debt to MSD at higher rate than male, Pākehā counterparts

Social Development Minister Carmel Sepuloni.
Social Development Minister Carmel Sepuloni. Photo credit: Newshub

By Charlie Dreaver of RNZ

Women and Māori beneficiaries are having to pay back their debt to the Ministry of Social Development (MSD) at a higher rate than their male and Pākehā counterparts.

Māori on average also owe more to MSD than Pākehā.

Advocates and political parties say it reeks of discrimination and racism, and they want a debt amnesty for all beneficiaries.

More than half a million New Zealanders are in debt to MSD at an average of $3400, but for Māori that average is almost $1000 more.

Auckland Action Against Poverty's Brooke Pao Stanley said people were taking out these loans just to live.

"If you get a food grant then you don't have to pay that back, but everything else if you require support with rent, bills arrears, if your babies need uniforms, stationary, help with car repairs, all of that becomes debt for you," she said.

The repayments are set at the discretion of MSD staff.

Men on average pay back $11.09 a week, while women on average pay $16.33 a week. When split by ethnicity, Pākehā on average pay $12.78 cents weekly and Māori $16.01 per week.

The figures were obtained by Green MP Ricardo Menendez March, who said it reeks of systemic discrimination.

"A person on the benefit who has not faced discrimination can more easily navigate a conversation with a case manager to reduce debt to the utmost minimum," he said.

"This is where we see these biases at play."

Te Pāti Māori co-leader Debbie Ngarewa-Packer said the numbers were heartbreaking.

"It's just scary, it is really, really frightening. The Minister... we demand she take charge of this and explain to those and the rest of Aotearoa, what this Government is going to do to take this burden off these whānau, off these wāhine and their tamariki," she said.

Social Development Minister Carmel Sepuloni said there had been a lot of work to reduce debt for clients in a way they could afford.

She said wāhine Māori who received Government support were better off under this Government.

"On average they are better off by about $175 per week now because of changes we've made to the welfare system, because of the increases we have put in place, so we have made significant progress, but as I say there is always more work to do," she said.

She did not think bias was the cause of the higher weekly repayments for Māori and women, rather that women were more likely to take out loans and Māori were overrepresented in working-age benefits.

"I think the level of debt that different people are taking on in the system has a role to play with that, and so I think there are certainly some equity issues with regards to income adequacy in our country in general and it's reflected in the welfare system."

Brooke Pao Stanley said how much people pay weekly should not be influenced by how much they owe.

"People have a lot of debt because they need support, because benefits are already so low. And so it has nothing to do with how much people owe, it's got to do with how racist the system is."

Menendez March said payments should automatically be set as low as possible to improve equity.

"The conversation should be less about how we ensure that the person on the benefit pays their debt fastest, and it should be centered more [on] how we ensure that we're not putting somebody in hardship."

Ultimately, the Greens, Te Pāti Māori and Auckland Action Against Poverty all wanted a debt amnesty to wipe the slate clean.

Sepuloni said an amnesty would require a law change and was not something being considered.