Opinion: Yes, the welfare system does need a 'reset' - in favour of beneficiaries

  • Opinion
  • 24/02/2024

OPINION: I have lived in the borderlands between work, study and the benefit all my adult life.

Because of my disability, cerebral palsy, I receive a Supported Living Allowance, or the Invalids Benefit as it was called before.

I’ve studied for degrees in maths, computer science and theology, and am now working toward a PhD in the latter. At times, I have worked part-time and studied part-time.

Only once have I been on the benefit while neither working nor studying, which coincided with a severe bout of depression 15 years ago.

If I can say one thing about relying on a benefit, it’s that the Ministry of Social Development (MSD) does not make it easy for you.

And I fear that this week’s announcement of a “reset” of our welfare system, which will see beneficiaries closely monitored and sanctions more readily imposed, will only make things harder.

Last year, I found out that sanctions for beneficiaries were very much already in place. I left the country for three days to attend a conference in Sydney related to my studies, and because I’d forgotten to let the MSD know, my wife and I faced a total benefit loss.

This was an honest mistake, and thankfully it was able to be sorted out upon my return to New Zealand. But it was incredibly stressful to go from depending on money to suddenly losing it, and the experience served as a sobering reminder that one slip-up could result in the loss of my livelihood.

As a theology geek, I tend to find wisdom in obscure Biblical passages. And one apt piece of wisdom, traced to well over three millennia ago, is the command in Leviticus to use “fair scales” for selling grain. The principle is that when the scales are fair, both the seller and the purchaser can trust the deal.

Immanuel Koks
Immanuel Koks Photo credit: Immanuel Koks

In my view, the MSD scales are already weighted in the Government’s favour, and tightening up on sanctions will just make a difficult system more unjust.

In announcing the ‘welfare reset’, Social Development Minister Louise Upston said that, compared to when Labour came to power in 2017, “70,000 more people are on the Job Seeker benefit at the same time that we've seen a 58 per cent reduction in the use of sanctions.”

The impression this gives is that sanctions are a last resort – and that only those ready for work, but not attempting to find work or get training, are being targeted.

But if sanctions are the last resort, it makes no sense that they are the first measure deployed to reduce welfare dependence. The first step that should be taken is to make it easier to transition from the benefit to work or study.

One of the system’s strengths is that a person’s total income support comprises a bespoke set of main benefits and additional payments, like the accommodation supplement or disability allowance.

And yet, each part of the total benefit is means-tested at different rates and in different ways – and things get even more complicated if you receive Working for Families tax credits. 

Any responsible person starting a new job will ask what it will do to their weekly income. Good luck working that out if you are on a benefit.

If you’re lucky, the information you need to work it out might be buried deep in the MSD website. But then there is often ‘case manager discretion’, which clouds things further.

MSD’s systems are set up to work best for people who work on a weekly wage, because you need to declare income as weekly wages. If you work in the gig economy, where your income goes up and down weekly, your benefit will jump around with you. Every time it does, you must trust that MSD will work out the new rate correctly.

I don’t know how often I have been left scratching my head reading letters from MSD that say something like, ‘You declared that you and your wife earn X, so therefore, your weekly benefit will be Y per person’ – with no explanation of how they get to that number.

As an academic with a mathematics degree, working with numbers and reading wordy government letters shouldn’t faze me. But I have spent hours working my way backwards to try and understand, because the MSD never tells me what it has done to explain how they calculate my weekly benefit.

Showing the working should be among the most basic components of what they do.

If the Government wants to help people off benefits, the first step is to make the process to determine how income from work will affect your benefit as streamlined and straightforward as possible.

The second step is to ensure that overall, people are rewarded in their back pocket if they do the mahi to get work – and then, crucially, to make sure people are supported at work.

So my message to the Government is simple: If you are serious about getting people into work, clear the pathway through the borderlands between the benefit and work by making the system work for them.

If you don’t, then stop putting pressure on beneficiaries who find it too hard or too scary to get work. Perhaps they don’t know if they will be better off.

Immanuel Koks is a theologian and disability scholar. He is currently studying for a PhD.