Appendix D: Full list of recommendations

Remove:

• the requirement to complete specific activities before a benefit is granted (pre-benefit activities)
• the sanction where benefit payments stop if people have a warrant out for their arrest, and continue data matching with the Ministry of Justice and take a proactive supportive approach to contacting these people
• social obligations that require people receiving a benefit to take all reasonable steps to have their children enrolled with a medical practice, be up to date with their Wellchild/Tamariki Ora checks and be attending early childhood education or school
• pre-employment drug testing and provide specialised support for people with substance use disorders
• the mandatory work ability assessment for people with health conditions or a disability and link workability assessments to return to work plans
• the requirement to reapply for a benefit every 52 weeks – MSD is expected to provide full and correct entitlements through regular reviews (at least annually)
• work obligations when an additional child is included in a benefit (the subsequent child rule)
• the sanction on not naming another parent (was section 70A in the Social Security Act 1964 and is now section 192 of the Social Security Act 2018).

Resource frontline services to the level required to achieve outcomes as a priority.

Implement an ongoing, comprehensive, active and agile staff training strategy.

Adopt an improved and accessible complaints process that is measured by a satisfactory restoration of the relationship between the parties.

Make the review process simpler, speedier and more accessible, and ensure the principle of natural justice is observed.

Make a further hearing at the Social Security Appeal Authority available to those who take an unsuccessful claim to the Medical Appeals Board.

Assign people likely to be in long-term receipt of a benefit or with complex needs a dedicated case manager, and give such case managers small caseloads so they can adequately address the wellbeing of the person in need and their family or whānau.

Resource the workforce adequately, and streamline systems in consultation with the frontline workforce to improve work flow and recipient service experience.

Put people at the centre of decision making, seek feedback from staff about how system changes affect their roles, and empower staff to work proactively to enhance the mana of benefit recipients.

Provide multiple channels for service so applicants can access assistance through whichever channel they are most comfortable using.

Take a Whānau Ora-type approach where the complexity of a person’s situation means multiple agencies are involved and skilled navigators support the person’s interactions with the agencies and community organisations.

Review all hardship payments and ensure eligibility is in line with the new purpose and principles of the Social Security Act.

Give MSD the mandate to improve, simplify and redesign practice around income declarations.

Increase funding for community initiatives that promote financial literacy and for debt reduction, such as no interest, no fee and debt consolidation loans.

Introduce a scheme of incentivising benefit debt repayment, such as a Matched Debt Reduction Scheme, to reduce outstanding benefit debt.

Review internal performance measures relating to debt, to bring them in line with the new purpose and principles.

Endorse MSD's three-tiered approach towards alleged fraud.

Introduce independent review proceedings prior to a Benefit Review Committee for prosecution investigations.

Explore and align prosecution practice with Inland Revenue’s approach to prosecution.

Scale up the Supporting Offenders into Employment intervention and MSD’s reintegration efforts, in conjunction with the Department of Corrections.

Pastoral care for people released from prison should be increased.

Review and increase the current value of the Steps to Freedom grant, to ensure it is adequate for basic living costs, including housing.

Monitor and ensure prisoners have the appropriate documentation to obtain income support or work on release (for example, an official form of identification, a driver’s licence, bank account, contact details).

Consider continuing housing cost assistance for people entering prison for a short period, on remand or in custody.

• Remove youth rates of main benefits. Increase Jobseeker Support for under 24 years living away from home (and the rate of Youth Payment) to match the rate for people 25 and older, and increase Supported Living Payment for 16–17 year-olds to the rate for people aged 18 and over.
• Remove initial income stand-down periods.
• Remove the 13-week non-entitlement period for voluntary unemployment.
• Remove the 30-hour rule.
• Introduce individual entitlement to Jobseeker Support while retaining a couple-based income test.
• Keep sole parents on Sole Parent Support until their youngest child turns 18 (rather than switching them to Jobseeker Support once their youngest child turns 14).
• Consider changing the name of Jobseeker Support – Health Condition or Disability to better reflect people’s needs (for example, Health Support).

• Increase income and asset limits to allow a larger proportion of low-income working people to access payments.
• Review and increase grant limits so they cover current costs, including for emergency dental treatment.
• Make a larger proportion of payments non-recoverable (for example, those for the costs of school uniforms).
• Review the Temporary Additional Support formula, including the accommodation loading and maximum amount, so it adequately covers costs.

• Align definitions of income and assets with those established by Inland Revenue, unless there are clear and robust reasons for a different definition.
• Treat earnings-related compensation from ACC the same as other income from work in the benefit system.
• Review how income is measured and allocated to people, including assessment periods – especially in the treatment of lump-sum payments, retrospective payments, joint investments and annual business income.

• Align shared care rules for the Family Tax Credit with child support
  – 35% of care.
• Extend the 4 weeks ‘terminal payment’ to the Family Tax Credit.
• Consider how increases in the Family Tax Credit should impact on the rates of Unsupported Child’s Benefit and Orphan’s Benefit.

• Consider changing the interaction between Best Start and Paid Parental Leave to avoid overpayments.

• Repeal the Child Tax Credit.

• Change the definition of income to remove other non-taxable transfer payments (for example, Accommodation Supplement, Disability Allowance and Temporary Additional Support).
• Improve take-up by promoting greater awareness to working families, alongside Inland Revenue (given its role in administering Working for Families).
• Review subsidy rates (and their interaction with minimum session times in childcare and Out of School Care and Recreation (OSCAR) services), to determine if they are adequately subsidising costs, and increase the rates if they are inadequate.
• Consider increasing income thresholds to provide greater subsidisation of childcare costs for low- and middle-income working families, so that effective marginal tax rates for these families are not too high.

• Treat child support received as income for benefit abatement (already income for the Family Tax Credit).
• Treat child support paid as a reduction in income for benefit abatement (already a reduction in income for the Family Tax Credit).
• Remove compulsory application for child support (except for recipients of Unsupported Child’s Benefit).
• Shorten the application form and make more application options available (for example, online).
• Review the expenditure table to reflect changes in Family Tax
  Credit payments.

• Align shared and split care rules for main and supplementary payments with the Family Tax Credit and child support.

• Allow a 6-month period (rather than the current 6 weeks) after people move in together as a couple before a relationship is deemed to exist for the purposes of determining benefit eligibility.
• Do not deem two people who do not live together as being in a relationship for the purposes of welfare support.
• Investigate other moves towards greater neutrality in respect of relationship status, including increased individualisation of benefit entitlement, bringing the couple rate of benefit closer to two times the single rate, and improving alignment between the approach taken by MSD and in other legislation.
• Consider introducing a short-term entitlement (for example, 6 months) to a main benefit for partnered people who lose their jobs or incomes (due to redundancy, a health condition or disability, or a health condition or disability of a dependent child) through an earnings disregard of their partner’s income (up to a cap of around $48,000 a year) for this period.

Housing subsidies could be improved by:

• extending the period from 2 months to 6 months before income-related rent for public housing is increased after the tenant moves into employment
• changing the way Accommodation Supplement payments are calculated, so indexing maintains relativity with housing costs, and removing differences between renters and homeowners.

Specifically in relation to Accommodation Supplement:

– increasing the maxima to the median regional rental rates (for the latest year available)

– reviewing the maxima and the area locations annually to maintain the value of the payments with changes in median rental rates in different parts of the country over time

– decreasing the co-payment rate from 30% to 25% (that is, increase the Government contribution from 70% to 75%)

– decreasing the entry threshold for homeowners from 30% to 25% to align with renters

– allowing people who are studying (and meet the criteria for Student Allowance) but who do not receive Student Allowance, to apply for Accommodation Supplement.

Increase the cash asset limit on Accommodation Supplement to $42,700, to align with the cash asset limit for social housing:

– index the cash asset limit to maintain relativity over time

– remove the cash asset abatement test for Accommodation Supplement

– amend the definition of cash asset to exclude the proceeds from the sale of a house, for a reasonable period, to allow the person to re-enter the housing market, taking account of any special requirements or modifications the person or their family may require to a house.

Improve the take-up rate of Accommodation Supplement and Temporary Additional Support for non-benefit recipients through greater cooperation with Inland Revenue, better use of its information, and increased publicity and proactive activity.

Increase the flexibility in the requirement to review and renew Temporary Additional Support when assessments relate to housing costs, with reviews between 3 and 12 months tailored to individual circumstances, and accordingly rename, such as ‘Tailored Additional Support’.

Ensure the combination of changes to housing support and abatement rates, alongside other income support, make low- and low–middle income households substantially better off.

Determine the impact on low-income households of maintaining levels of Accommodation Supplement for a reasonable period for beneficiaries who move into full-time work, so they are well supported to remain in work and able to clear debts and build savings, similar to the recommendation on income-related rent subsidy.

Change the way Accommodation Supplement payments are calculated to move away from family size to being based on the number of bedrooms, including allowing bedroom space for a disability support person and for children in shared custody, and determine the impact of this change on low-income households.

Review the level of the cash asset limit for the income-related rent subsidy and Accommodation Supplement, to maintain the principle that it allows people to save for a mortgage deposit for a median-priced house.

Review, as the supply-side measures increase and affordability improves, the roles of MSD, Housing New Zealand and the Ministry of Housing and Urban Development to consider whether an integrated, single-agency approach to housing might be preferable.

Review the housing assessment and allocation process so there is an appropriate balance between placing locals waiting to be housed and high-needs households from outside the region.

Consider the following approaches:

• facilitate innovative thinking and action to increase home ownership through rent-to-buy schemes, shared equity schemes, low-interest rate loans or fixed mortgages, microfinancing and similar
• request Housing New Zealand to develop affordable options for tenants to purchase their state house.

These approaches must be based on achieving equity in housing outcomes, including ownership, for Māori and Pacific People. This should result in culturally appropriate rental and ownership housing, including household size and function, and include papakāinga options.

Institute a new operating model that provides people at risk of poor labour market outcomes (including Māori, Pacific People, people with health conditions or disabilities, and people whose jobs have been made redundant) with proactive and sustained support to obtain good, sustainable work.

Increase significantly investment (with appropriate monitoring and reporting) in active labour market programmes.

Establish a dedicated deputy Chief Executive for employment in MSD.

Provide sufficient numbers of well-trained, well-resourced, regional labour market managers and specialist employment case managers in MSD.

Provide public employment services to people at risk of becoming unemployed.

Review a whole-of-government approach to labour market, training and vocational education (with MSD as an integral partner) with MBIE, Te Puni Kōkiri, Ministry of Pacific Peoples, Tertiary Education Commission, Careers New Zealand, polytechnics, industry training organisations, and regional and local government.

Establish national and regional advisory groups of the social partners (government-business-union), iwi and regional and local government to implement employment and active labour market policies at a national and regional level.

Resource and develop a portfolio of labour market programmes that is driven by local labour market conditions, evidence based, and informed by all relevant national and local labour market data.

Access the best international data and programmes so New Zealand is well placed for a future labour market in which more people might more frequently transition in and out of work and where there is a greater need to support workers to re-skill or up-skill due to displacement or moving in or out of casual work.

Make labour market programmes and work far more accessible for disabled people.

Establish a short-term (for example, 6 months) benefit for partnered people who lose their jobs or incomes (for example, due to redundancy) through an earnings disregard of their partner’s income (up to a cap) for this period (see the detailed recommendations table in chapter 7).

Adequately fund redundancy support programmes, which include a suite of free or subsidised training and education courses, for workers who experience redundancy.

Ensure people can resume benefits readily (to allow for unpredictable changes in income and to provide people with confidence to take up employment), including removal of income stand-down periods.

Increase investment in well coordinated and youth development-focused programmes to help young people into education, training, alternative employment opportunities or volunteering.

Tailor youth initiatives to their communities.

Take an evidence-based approach, informed by the voices of young people and building on the strengths of young people, and provide a basis for their long-term engagement with the changing world of work.

Provide assistance with a specific focus on the needs of rangatahi Māori, Pacific youth and young people with health conditions or disabilities, to provide more equitable outcomes and success for these groups of young people.

Main benefits

Consider increasing financial support for people affected by health conditions and disabilities not due to an accident to be equivalent to that provided by the accident compensation scheme. Treat people with similar levels of disability – whether caused by illness or injury – similarly. Link this support to relevant employment support where work is a possibility.

Introduce time-limited individual entitlement for income and employment support for low-income families suffering from health shocks (see the eligibility section of the detailed income support recommendations, page 118).

Consider transferring to New Zealand Superannuation people on Supported Living Payment who are so unwell or disabled that there is no foreseeable chance they will come off the benefit during their life.

Align the abatement rate of non-blind disabled people receiving Supported Living Payment with that of the blind, to address the current inequity.

Assistance for the cost of having a health condition or disability

Redesign supplementary assistance for people with health conditions or disabilities, so it is easier to access and more accurately covers the costs of having the health condition or disability.

Increase the level of income support provided by Disability Allowance with three rates (low, medium and high) related to the degree of burden of disability or care needed.

Increase the level of income support provided by Child Disability Allowance, and introduce three rates (low, medium and high) related to the degree of burden of disability or care needed.

Direct the Ministry of Social Development and Ministry of Health to clarify where responsibility for covering the cost to individuals of health conditions and disabilities should lie and make this transparent, known to the public, and accessible.

Include in the New Zealand Health and Disability System Review how cost and other barriers can be reduced so people on low incomes can access primary care, dental care, alcohol and other drug services, mental health care, secondary care, and vision and hearing services.

Carers

De-couple Supported Living Payment Carer from Supported Living Payment, and create a carers benefit that continues to be paid at the same rate as Supported Living Payment. This allows more flexibility in the provision of non-financial support.

Introduce an annual carers payment to help meet the additional costs associated with care.

Implement within the welfare system a comprehensive approach to support the suitable employment of people with health conditions and disabilities and carers that includes:

• early intervention with the right level of support
• support for part-time work
• evidence-based integrated employment and health supports and services
• improved access to health supports and services to support return to work, with particular support for people with mental health problems or chronic conditions
• easy re-entry to a benefit if employment ends
• support for employers to take on or retain people with health conditions and disabilities and carers (for example, wage subsidies and workplace accommodations).

Support the recommendations of the Government Inquiry into Mental Health and Addiction and the 2018 OECD report Mental Health and Work: New Zealand, because of the large proportion of people receiving health and disability benefits whose primary barrier to work is a mental health condition.

Work to eliminate people’s negative experiences with MSD, which worsen mental distress, by changing the way MSD interacts with people in line with our proposed purpose, principles and values.

Government to prioritise the prevention of ill health and disability by:

• overseeing and coordinating cross-government responses to improving social wellbeing, including tackling the social determinants of poor health and disability
• enhancing cross-government investment in prevention and resilience-building activities for young people and people in workplaces.