Comment

A chance to reverse our humiliating welfare system

An overhaul of our welfare system must include significant cultural change or MSD staff will continue to misapply the law and deny desperate people their entitlements, writes Catriona MacLennan

Finally, a Prime Minister states the obvious truth: culture change is needed at Work and Income New Zealand.

That change must be swift and it must be comprehensive.

Prime Minister Jacinda Ardern made her comments about the requirement for an overhaul of culture following news that a Ministry of Social Development employee told a beneficiary her debt had been suspended because she went on two Tinder dates.

The Ministry has admitted that was wrong. Its second explanation was that the benefit was immediately cut off because an allegation had been made that the woman was in a relationship and therefore not entitled to a benefit.

Both explanations demonstrate an incorrect application of the law.

The Ministry said the case was a one-off and not symptomatic of an overall cultural problem.

That is not correct.

Two decades ago, a Work and Income NZ employee told me my client should not be having sex while she was on the Domestic Purposes benefit.

That statement illustrated both that an employee had no understanding of the law governing benefit entitlement, and that she thought beneficiaries were not entitled to the basic human rights other New Zealanders enjoy.

Joychild’s report referred to incentives for Ministry employees to find fraud: they had quotas and a “Million Dollar Club” was created to reward staff who detected high levels of fraud.

Since then, there have been constant reminders of MSD’s unfortunate attitude to those it is supposed to help, as well as its misapplication of the law.

A 2001 report by barrister Frances Joychild recommended that all cases of debts established against beneficiaries said to be in relationships between 1996 and 2000 be reviewed, due to concerns about misapplication of the law.

That involved thousands of cases.

Joychild’s report referred to incentives for Ministry employees to find fraud: they had quotas and a “Million Dollar Club” was created to reward staff who detected high levels of fraud.

That mentality of suspicion of beneficiaries continues to this day.

A coroner last year said that MSD investigators had such a lack of understanding of the rules of prosecuting benefit fraud that they were not equipped to make sound and appropriate decisions.

The coroner was ruling on the death of a Lower Hutt woman who committed suicide the day after receiving a letter from the Ministry advising she was to be prosecuted for benefit fraud.

It was later found the fraud allegation was not substantiated.

The Government has the opportunity to take us back to being proud of supporting those who need help.

A former MSD investigator told the inquest that quotas for prosecutions and debt recovery were still operated by the Ministry.

Statistics show MSD has a very high prosecution rate compared with other government agencies. In 2014, it took 670 prosecutions, while ACC took four.

The Ministry has also been found to have misapplied the law relating to special benefits, and has a long history of failing to provide people seeking help with all their legal entitlements.

At regular events held by Auckland Action Against Poverty outside WINZ offices, very high numbers of people are found not be to getting all the benefit assistance provided for by law.

Community Law Canterbury in 2013 and 2014 produced three detailed reports about beneficiaries’ experiences which painted a shocking – though familiar – picture of humiliation and significant barriers to accessing benefits.

MSD is also extremely vigorous in its civil pursuit of alleged debts owed by beneficiaries.

It pursues debt recovery for years, even when it is apparent that people have no money and will never be able to repay anything.

MSD has spent more than $100,000 trying to recover money from a chronically ill woman in her mid-50s who will never work again.

The Ministry has recovered less than $2000 and will never obtain a cent more.

In another case with a lengthy and expensive history of court proceedings, MSD is arguing that loans taken out by a beneficiary were income and accordingly disqualified her from a benefit.

This is despite the fact that the High Court ruled years ago that loans were not income.

Ardern said this week that an overhaul of the welfare system was “imminent”.

It is desperately needed.

The reforms must involve cultural change from top to bottom at the Ministry. Without that, other changes will be stymied as staff will continue to misapply the law and deny desperate people their entitlements.

We need to get back to the philosophy of the 1938 Social Security Act.

Then-Prime Minister Michael Joseph Savage said that a new principle was introduced by the legislation:

“Citizens of the Dominion are insuring themselves against the economic hardships that would otherwise follow those natural misfortunes from which no one is immune.”

That view recognised that hardship was a misfortune – not something brought on oneself and accordingly deserving of punishment.

Aotearoa as a whole was proud that we were leading the world in providing social security.

Since then, we have done a complete culture change.

Nowadays, we regard poverty as being created by those in economic hardship and we have suspicious and punitive attitudes to those suffering misfortune.

The Government has the opportunity to take us back to being proud of supporting those who need help.

A major shift in culture should be accompanied by raising benefits to liveable levels, treating people with respect, abolishing sanctions, writing off debts and closing the tip line that encourages malicious reporting of beneficiaries. 

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