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In New Zealand, the system could improve its response to people with health conditions or disabilities in several areas. These are discussed below.
The Ministry of Social Development (MSD), Ministry of Health [50] and Accident Compensation Corporation (ACC) all work across the health and disability sector, delivering support and services to a sometimes shared client base. The three agencies have very different incentives and purposes, which has led to disparate and inequitable outcomes for disabled people both accident and medically diagnosed (WEAG, 2019k).
Levels of income support and integrated services for people with similar disabilities vary, depending on whether people are eligible for ACC income-replacement payments [51] or much less generous, means-tested payments through the welfare system (Fletcher 2018b; OECD, 2018b; WEAG, 2019k). As table 3 indicates, the amount of financial assistance people may receive from ACC is usually higher than that provided by MSD for the same level of incapacity[52]. This difference was also highlighted in the recent review of mental health and work in New Zealand (OECD, 2018b).
| Scenario | Health condition, disability or injury not covered by ACC | Personal injury covered by ACC [53] |
|---|---|---|
|
Scenario 1 A person over 25 years old, with no dependants, working 40 hours a week at the minimum wage, develops a health condition that temporarily affects their ability to work |
MSD main benefit JS-HCD $215.34 net in hand a week [54]
AS $105 net in hand a week (maximum AS rate) DA $23 net in hand a week (average DA rate)
|
ACC earnings-related weekly compensation 80% of the recipient’s average weekly MSD supplementary assistance AS $70 net in hand a week [56] (maximum AS rate after DA $23 net in hand a week (average DA rate) Total: $540.11 net in hand a week |
|
Scenario 2 A couple, both over |
MSD main benefit Not eligible for main benefit (benefit is fully abated due to income test for a couple) MSD supplementary assistance AS $154 [57] net in hand a week (maximum AS rate for a couple after income reduction) DA $23 net in hand a week (average DA rate) Total: $177 net in hand a week |
ACC earnings-related weekly compensation 80% of the recipient’s average weekly MSD supplementary assistance AS $7 net in hand a week (maximum AS rate for a couple after income reduction) DA Not eligible (above maximum income limit for couple) Total: up to $454.11 net in hand a week |
|
Scenario 3 |
MSD main benefit
|
ACC earnings-related weekly compensation Lump sum payment within a range from $3,455.24 to $138,209.55, depending on the level of impairment [58] or Independence allowance assessed weekly but paid quarterly, with rates ranging from $197.73 to $1,186.64 [59]. |
Notes: ACC = Accident Compensation Corporation; AS = Accommodation Supplement; DA = Disability Allowance; JS-HCD = Jobseeker Support – Health Condition or Disability; MSD = Ministry of Social Development; SLP = Supported Living Payment.
All scenarios are based on the following assumptions:
Some people with health conditions or disabilities miss out on income support from ACC and MSD. Some people with health conditions or disabilities do not qualify for accident compensation [60] and miss out on financial support from the welfare system because of the couples-based eligibility rules for financial assistance (WEAG, 2019k). Most families in New Zealand need two incomes to cover housing and other living costs.
When the accident compensation scheme was established, the intent was to eventually extend equivalent coverage to people with a health condition or disability not arising from an accident. "The community had a responsibility to protect all citizens from the burden of sudden individual losses, when their ability to contribute to the general welfare by their work was interrupted by physical incapacity" (Palmer, 2018:4). The Welfare Expert Advisory Group suggests that the Government might consider how best to extend the advantages of an ACC approach for those with disability and illness, particularly long term, not caused by an accident, to reduce the current inequity.
A single person on benefit is at significant risk of having an inadequate income (WEAG, 2019k). As mentioned in chapter 2, most of thosein receipt of health and disability benefits are single and receive little income from other sources. While many people in receipt of a benefit because they have a health condition or disability have some work capacity, maintaining an adequate income from paid work is a challenge. Those with health conditions or disabilities are disadvantaged in the labour market and more likely to receive income support from the state (WEAG, 2019k). Rates of engagement in part-time work while on benefit are low for recipients of both Jobseeker Support – Health Condition or Disability (JS-HCD) and Supported Living Payment (SLP) recipients. Many who leave a benefit for work later return (Judd& Sung, 2018).
For people with health conditions and disabilities and carers who are supported by the welfare system, current income is often inadequate to support basic needs, for meaningful community participation and to live a life with dignity [61].
"Everyone should have enough support to lead a good life, especially those with illnesses and disabilities where circumstances are unlikely to change."
PAST WELFARE RECIPIENT
Time on income support can impact negatively on health, especially mental health. This appears to be linked to welfare stigma or other adverse life events coinciding with welfare receipt for those receiving unemployment or disability payments (Butterworth et al, 2006; Kiely & Butterworth, 2013; Davis, 2018; Kvalsvig, 2018). This likely further undermines an individual’s employment and earning prospects.
A portion of SLP recipients are unlikely to ever obtain paid employment. The actual number is unclear, but the group eligible for SLP simplified access and whose SLP entitlement is never to be reassessed is a useful proxy. Some people with a specific diagnosis can access SLP without having a detailed assessment of their capacity to work. This quicker process was intended for those with permanent and severe health conditions or disabilities[62]. People who are granted SLP through simplified access will never have their capacity to work reassessed. This equates to about a third of SLP recipients. Such people need an adequate income to support meaningful participation in their community and to live a life with dignity. The current rate of SLP does not provide this (WEAG, 2019c).
Extra costs are associated with having a health condition or a disability (Kirby et al, 2013; Mitra et al, 2017). While there is no agreed way of calculating a cost of disability in New Zealand or elsewhere, many on low incomes cannot cover that cost (Callander et al, 2017; Murray, 2018; Sum et al, 2018) [63]. For those with one or more long-term health conditions and disabilities, the costs may be very high (for example, the time and cost of accessing an array of separate health and care professionals, medication costs, and equipment costs). People who rely long term on a main benefit often have few additional resources to draw on to cover such costs. Moreover, in New Zealand, various agencies provide financial assistance to compensate for the additional cost of having a disability [64]. The system is complex for people with health conditions and disabilities and carers to navigate and is not user centred (OECD, 2018b; WEAG, 2019k, 2019l).
The stress of coping with ill health, disability or caring responsibilities on a low income is often exacerbated by dealing with an overly bureaucratic income support system and trying to navigate the supports and treatments they need to access through other systems, primarily the health system. This is especially the case for people who have complex needs requiring frequent interaction with different parts of the health system (for example, those with chronic conditions and/or multiple conditions) [65]. It is often not clear to people with health conditions or disabilities which agency is responsible for delivering which supports and services, meaning people may miss out on what is available to them. Moreover, agencies do not necessarily know or advise people of assistance they may be able to get from elsewhere. People with communication difficulties have additional challenges interacting with the welfare and health systems.
People in receipt of a benefit, along with others on low incomes, have considerable difficulty accessing the health supports and services they need to maintain and improve physical and mental wellbeing (Expert Advisory Group on Solutions to Child Poverty, 2012a; Potter et al, 2017; Sural & Beaglehole, 2018) [66]. Improving access to primary care, dental care, alcohol and other drug services, mental health care, secondary health care, vision services and glasses, hearing services and hearing aids, and healthy housing is particularly important for those on low incomes, and the needs for people with health conditions and disabilities may be greater in all these areas (WEAG, 2019k).
We recommend a number of changes, to ensure that financial assistance better reflects the actual costs of having a health condition or a disability and is equitable across the social sector. We also recommend the health system consider how cost and other barriers can be reduced so people on low incomes can access the support and services they need.
"When it comes to people on an Invalid's Benefit there should be much more help. I’ve been house bound and bed bound for three years unable to clean my home and only recently a friend told me there’s a possibility of home help. Yet NEVER did [an MSD] staff member tell me this. I had to repair my own mobility scooter because I couldn’t afford to take it to the service centre, but because I’m so sick it took several weeks to fix what a healthy person could fix in half a day."
WELFARE RECIPIENT
New Zealand relies heavily on family carers to care for people with health conditions and disabilities (Grimmond, 2014). As in other OECD countries, demand for such carers is expected to rise as the population ages and more people live longer with chronic and disabling health conditions (Colombo et al, 2011). Placing people in need of care in residential care is expensive and may not be desirable from the perspective of supporting people with significant health conditions or disabilities to live an ordinary life in the community. However, family carers, especially women, can become trapped in a role where they receive a very low income. Economically disadvantaged families are more likely to be family carers, because they are less likely to be able to afford formal care. These families are also more likely to struggle to meet the additional costs associated with caring. This means the impact of caring and the costs associated with caring are felt more intensely by those who are already disadvantaged (Colombo et al, 2011).
Carers of people with health conditions or disabilities face a number of challenges including an inadequate income and a complex, fragmented system of support. The differences in how people with health conditions or disabilities are treated are carried through into the carer support arrangements of different government agencies (for example, ACC paid family care, Individualised Funding and Funded Family Care from the Ministry of Health, and SLP Carer benefit from MSD). Some carers are eligible for support from MSD, the Ministry of Health or ACC, but there is inequity in the levels of income and other support provided. Carers of people with health conditions or disabilities within the welfare system receive the least generous payments than carers supported by other agencies. Carers in the welfare system are eligible for a means-tested benefit (SLP Carer) if they care for someone who would otherwise need hospital, rest home or residential care but who is not their partner (WEAG, 2019l).
Within the welfare system, people may be eligible for supplementary assistance aimed at helping to address the cost of having a health condition or disability but not the care itself, which remains unpaid. Indications are that take-up of such assistance is less than ideal and that it does not cover the costs many families face. High-intensity caring is associated with negative impacts on income, physical and mental health, family functioning and social networks, and these are experienced more intensely by those who are already disadvantaged (WEAG, 2019l).
More can be done to support carers. The range of supports and services provided should be considered in the context of the increasing demand for care due to demographic change and changes in policy settings. We recommend de-coupling SLP Carers from SLP so that carers are better recognised in the welfare system. We also recommend introducing an annual carers payment to recognise the cost associated with caring for someone with a health condition or a disability.
"I am needed at home to care for our eldest son (now 11) who is severely autistic. If we were not caring for him, he would have to be in fulltime residential care. This would medically qualify us for the Supported Living Payment - Carer. However, I am not eligible for any assistance like the Supported Living Payment for this work, because my husband has a paid job."
A PARENT OR CAREGIVER TO DEPENDENT CHILDREN
Suitable work is generally good for health and wellbeing (Curnock et al, 2016; OECD, 2018b; Rea, Anastaasiadis et al., 2018). This is because:
While some people with health conditions or disabilities leave a benefit for work, many return. Long-term receipt of benefit is common, especially among SLP recipients. Few people receiving income support for health conditions or disabilities get any income from part-time work. A similar pattern exists for people receiving SLP Carer (WEAG, 2019l).
The OECD (2017: 15) argues that: "the standard approach taken in most countries’ unemployment systems today is to exempt jobseekers with health problems from their participation and job-seeking requirements, and to hope that, and wait until, they return treated and cured". The OECD argues that this is not the right approach, because many people on health and disability benefits have chronic conditions (for example, some mental health and musculoskeletal conditions) that cannot be cured.
There is no single solution to supporting people with work-limiting health conditions or disabilities into employment. Health and disability benefit recipients are a heterogeneous group. Outcomes for any individual will depend on a variety of factors, including whether the work accommodates their individual capacity or caring responsibilities, the quality of the work, and the financial gains from working. To improve outcomes for people with work-limiting health conditions and disabilities, the OECD recommends implementing a coherent combination of policies that work on changing the behaviour of individual recipients of health and disability benefits, employment agencies, health practitioners and employers (Böheim & Leoni, 2018; OECD, 2010; 2018b).
"Employment is a key part to helping people with mental health and addiction issues to maintain wellbeing."
WORKWISE
In New Zealand, most people on health and disability benefits either have deferred or no work obligations – only 13% have work obligations (part-time obligations). People receive a benefit, but little return-to-work management takes place. In the welfare system, they also have poor access to timely evidence-based health care or return-to-work support from the welfare or health system to help them enter and maintain work. As a consequence, many never return to work or are disengaged from work for long periods (WEAG, 2019k). For many people with health conditions or disabilities intervening early in the right way is crucial in supporting a return to work and improving earnings (OECD, 2010; 2015; 2018b).
Compared with other OECD countries, New Zealand spends less on active labour market programmes and very little on evidence-based supported employment and vocational rehabilitation for people with health conditions and disabilities. There is no early intervention in the welfare system to support a return to work and then to stay in work. Specific interventions at scale to help people with health conditions and disabilities into work are lacking, and coordination between employment and health services to support a return to work is poor. Integrated health and employment services to facilitate a return to work are available to injured earners through ACC but not elsewhere at any scale. Condition management is limited for people with long-term chronic conditions in the welfare system to support a return to work (OECD, 2018b; WEAG, 2019k). Thus, there is a welfare policy – not an employment strategy – for people with health conditions and disabilities.
ACC claimants who were earning at the time of their injury receive individual entitlement to significantly higher levels of financial support and have access to timelier, tailored rehabilitation and return-to-work support (OECD, 2018b). This approach achieves better outcomes for those who receive it (McAllister et al, 2013; Paul et al, 2013). This approach needs to be embedded within social security. A recent review of mental health and work in New Zealand reached a similar conclusion (OECD, 2018b).
Some people may require considerable time and support to move into work, while others may be closer to the labour market and require less time and support. Hence, a more nuanced, individual approach is required. Difficulties in returning to work usually increase over time. Most people temporarily unable to work due to a health condition or disability return to work within a short period (for example, less than 4 weeks) and require little in the way of interventions. However, over time, the impact of psychosocial factors becomes more important, new issues may emerge, and people find it increasingly difficult to return to work. They require additional and more intensive input to help them return to work. The level of input provided should be guided by the person's response to the interventions and not by diagnosis alone (WEAG, 2019k).
Some people may need a graded return to work, increasing their hours as their health condition or disability allows. Internationally, there is increasing evidence that graded return-to-work is an effective tool for the rehabilitation of people on benefit due to ill health or disability (Kools & Koning, 2018). It is important to note that many people receiving JS-HCD have long-term chronic conditions (for example, mental health and musculoskeletal conditions). While many are still able to work in suitable employment with the right support, the range of jobs available to them may be more limited. Some may only be able to work intermittently and/or part time (WEAG, 2019k).
We suggest the welfare system should do more to support part-time work for people with health conditions and disabilities. For those on JS-HCD, part-time work under 20 hours a week is not recognised as such under the Social Security Act 2018. Stats NZ defines employment as having worked one or more hours a week when surveying people about their labour force status [67]. For SLP recipients, there is a disincentive to earn more than $200 or work more than 15 hours a week. SLP abates at a rate of 70 cents to the dollar after a beneficiary earns more than $200 per week, and recipients working more than 15 hours per week lose their entitlement to SLP – except for people who are blind. The SLP never abates for recipients who are considered totally blind or severely disabled because their personal earnings are not counted under the Social Security Act 2018.
Through their caring, SLP Carers have developed specialised skills that could be valuable in future work. However, those receiving SLP Carer receive little assistance to engage in paid work or consider employment once their caring responsibilities end or when their caring responsibilities would allow this. We recommend better support to carers to engage in employment when their circumstances allow.
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