Comment

The welfare system is an economic shock

The new benefit only for people who have lost their jobs due to Covid-19 goes against everything the Government has said about our team of five million all being in this together, writes Jess Berentson-Shaw

With the announcement of the new Covid-19 relief payment for people who have been put out of work, I am thrilled people in this Government understand a high trust environment is critical to supporting people who have experienced a financial blow.

A Government that gives people the money they need, offers quality support to enable them to make their own decisions about how best to move forward, and then gets out of the way, is exactly the sort of approach that works, and that will help us get through the impacts of Covid19.

The new payment does all this. It gives people a reasonable amount of income to support themselves and their families - $490 a week tax free for a person who was working 30 hrs a week or more.

Importantly, people in policy have recognised that in our current economic environment a partner cannot support a person unless they too have a decent income, so the new payment doesn't get reduced based on your partner’s earning until they bring in $2000 a week. 

You can still get income from other sources including Superannuation, the In Work Tax Credit of working for families, and from other sources of income, such as rent or interest. I am assuming people don't have to spend all their savings before they can get it either. All practical things that will keep people out of debt, help them stay in their homes, and ensure that anyone else they support, like their children, won’t be too badly affected.

As a policy it's compassionate and practical. It limits the stress people will experience. It says “we trust you”. It won’t lock people into poverty. It's based on everything we know that works about good support systems by our governments.

However, what is neither compassionate nor common sense, is that the same approach is not being used by people in this Government for people and families who are already on our lowest incomes. People with a disability, people raising children on their own in part-time low paid work, people who have been fired from precarious work, those who have suddenly become ill, or whose relationships have broken down.

... people have designed the welfare system in a way that it too is a source of ongoing financial shocks for people who need it.

These people have to use all their savings, borrow from family, then from payday lenders. They have to ask those they are barely in a relationship with to support them financially. These people have to put their children in low quality childcare to go and get low paid work that does little for our overall wellbeing as a country. And to top it off they get half of what those on the new payment get.

The contrast is stark. And it is, and has been known for decades, to be an approach that locks people into poverty.
 
People already on low incomes are being exposed to economic shocks every day

Finance Minister Grant Robertson gave the following justification for this divisive practice: "It's about the fact that there has been a sudden and unexpected change in these peoples' lives. Yes, unemployment is difficult at all times, but this is a recognition that this came from nowhere."

Yet the reality is that people using our welfare systems before Covid-19 are there because they too suffered serious economic shocks. It’s just no one has chosen to acknowledge them. These shocks range from a partner leaving, an illness or ongoing disability, or being made redundant, or suffering childhood and intergenerational trauma.

The greatest irony is that people have designed the welfare system in a way that it too is a source of ongoing financial shocks for people who need it.

... with this policy only some of us get to be in that waka while others get swept away and further into poverty.

Income support has reduced in real terms year on year since the welfare reforms of the 1990s. There is an environment of low trust, marked by sanctions, exceptions, rapid abatements and outdated and harsh relationship rules. The attitudes from the rest of society about the value of people who are locked into poverty and the racism that is deeply embedded in all of this makes the system unfit for people.

The research is very clear that the welfare system as it is currently structured restricts and restrains people’s health, mental wellbeing, their ability to plan, to participate in our society and to contribute. It limits their and their children’s opportunities. It hurts our entire society when some people are made to suffer through these indignities.

We are all in this together
Ultimately, it is the ‘hard to see’ stuff that really matters in policy-making: the values that underpin the decisions, the effect it has on people most affected and the type of thinking and behaviour it brings to the surface in all of us.

In this case, people in politics are dividing us on the basis of what work we do, the circumstances in which we were put out of work and who we are. It has us fighting between ourselves and looking at others in our community with unkindness and a sense of injustice.

It goes against everything the Prime Minister and the Finance Minister have said to us in the last few months: “He waka eke noa”. Because with this policy only some of us get to be in that waka while others get swept away and further into poverty.

The solution of course, is to follow the advice of the welfare advisory group now when the opportunity is here. To listen to those people living on income support, who are cracking under the weight of the judgment and the lack of meaningful care and support. 

It's the right thing to do. It's the pragmatic thing to do. If Covid-19 has made anything clear it is that the wellbeing of others is critical to the wellbeing of all of us and anything is possible when people in government choose to centre this understanding.

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