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Work is under way in MSD to ensure benefit recipients are treated with respect and dignity in all their interactions with the system. MSD has introduced a new strategic direction (Te Pae Tawhiti), initiated a client commitment charter and begun a programme to refurbish offices to create a secure environment for staff and service users while creating a more welcoming space.
MSD is also in the process of changing its approach to systems and organisation design to improve performance and service user experience. An example of this is the Better Every Day[35] initiative, which is changing management thinking to focus on the service user’s experience and what is needed to achieve positive outcomes. However, for real change to be effective and sustained, the legislative and value settings, policy and system development, and outcomes being sought must be aligned. For this reason, we recommend that, following the adoption of our proposed purpose, principles and values, MSD embeds these into its policy and system development.
"It would help to care, to put people first. I reckon, a lot of the people who are beneficiaries, are people who have been abused. They’re adults, who were abused as children, who have grown up, and have gone on to be abusive, or lead abusive lives, and have raised children in an abusive environment. It’s a cycle, of abuse, but I do think it’s possible to break the chains, and it would be good if the government realised, the breakdown of people, has been from a breakdown in life, and that’s caused all sorts of social damage. If we could fix and repair the damage, we can begin to rebuild our communities.”
SOLE PARENT
Whakamana tāngata is a new approach based on mutual expectations and responsibilities. It is strongly connected to improving wellbeing by focusing on supporting positive long-term outcomes for a person, including increasing their skills and the labour market capacity of them and their family or whānau.
The current obligations and sanctions regime must be immediately reformed into a system of mutual expectations and responsibilities that are applied according to the circumstances of the individual. They must be applied in a way that meets the values of the system, with robust checks and balances to mitigate potential negative impacts on individuals and their families and whānau. The overarching expectation of welfare recipients and MSD is to act with respect and integrity in their mutual interactions.
"We don’t get given the time to ‘care’. Conversations are so limited. Get them in, get them out – we don’t have time to do what we know we should."
WORK AND INCOME STAFF FORUM
MSD should be held to the following expectations.
In reciprocation, people in receipt of benefit should be expected to:
Within the welfare system, there is currently a mandatory requirement to seek part-time work when a parent’s youngest child is 3 years old. In New Zealand, it is common for parents to return to at least part-time work when their children are young, where there is appropriate and affordable support in place to do so. Where it fits with their individual circumstances, the welfare system should support but not expect the parents of young children to take up paid work. Not everyone will be in a position to do work while their children are young. Once children are at settled at school, a part-time work expectation is reasonable. We propose having a part-time expectation for those whose youngest dependent child is 6 years or older. However, it is important that MSD take account of individual circumstances (for example, children with health conditions or disabilities) (MSD 2019h).
Parenting teenagers can be challenging, especially for sole parents. Adolescence is a time when many young people engage in risky behaviours. It also a time when mental health can deteriorate. New Zealand’s suicide rate for young people is among the worst in the OECD (Gluckman, 2011; Government Inquiry into Mental Health and Addiction, 2018). While we support the full-time work expectation for sole parents with a youngest child aged 14 years or older, it is important that MSD adopts an approach to the application of the work expectations that takes account of the individual circumstances of sole parents.
We do not support the continued use of a financial sanctioning regime. If the Government considers financial sanctions are necessary, people should lose no more than 10% of income. In a few situations, people with payments reduced by up to 10% may still not be willing or able to meet reasonable expectations. In these cases, it may be necessary, after exhaustive consideration of the reasons the person is not meeting their reasonable expectations, to cancel this person’s assistance. Where there are dependent children, it would be inappropriate to cancel assistance, and we would expect MSD to continue to work with such families to facilitate meeting the expectations associated with receiving MSD assistance.
"In my experience of working alongside a number of people who are welfare recipients I would say that the experience of going to WINZ is quite an ordeal for people. They feel like they are treated as ‘criminals’, like they are guilty until proven innocent, and there is no openness to describing their situation and explaining the issues inherent in their position.”
FRIEND OR FAMILY MEMBER OF WELFARE RECIPIENT
In New Zealand, case management is the intervention most commonly offered to people receiving a benefit. Case management is a relationship-based service and the mainstay of service delivery across welfare and health sectors in many countries.
The basic functions within any case management model are assessment of client needs, development of a comprehensive service plan, arranging for services to be delivered, evaluating and following up, and advocating for service improvements. However, ‘case management’ means different things to different people and no consensus exists about its components and appropriate application[36] (Butler et al, 2012). Despite this lack of consensus, there is general support for case management approaches.
Studies show that positive relationships in the context of welfare service provision are associated with increased levels of client engagement and satisfaction with the way the service was delivered, as reported by clients (Gladstone et al, 2012; Hasluck & Green, 2007; Mandlik et al, 2014). UK research indicates that clients generally support the case management approach in which personal support and advice is given with appropriate services to meet their needs. Friendly, experienced staff, a welcoming setting and a sense of shared purpose are not just desirable, somewhat cosmetic features of service but may be essential elements in the effectiveness or otherwise of provision (Hanson et al, 2006; Hasluck & Green, 2007; Mandlik et al, 2014).
There is no one-size-fits-all approach to case management. Case management interventions need to be modified and extended for the more complex needs of those workers further from the labour market (Hasluck & Green, 2007). Hasluck and Green add that, for the most disadvantaged jobseekers, the research suggests “the circumstances and context of engagement between [case manager and client, are] as (if not more) important than the specificities of types of provision” (2007:138). Lower caseloads appear more likely to be effective,[37] especially for those with complex needs[38].
Barriers to building trusting relationships between clients and case managers include:
In New Zealand, working age benefit recipients are streamed into different types of case management, depending on their risk of staying on benefit long-term and their amenability to moving into work. Work-obligated benefit recipients with the highest risk of long-term benefit dependency receive more intensive case management services. Those streamed into intensive case management services receive one-to-one engagement with an assigned case manager to help them move into work. Benefit recipients with no or deferred work obligations are streamed into general case management – a service that involves only the maintenance of income support payments. This latter group makes up the majority of benefit recipients (for example, most people receiving a benefit for a health condition or disability and most sole parents with very young children). They would benefit greatly from the dedication and continuity of individual case management.
Through our consultation process, we heard from service users and case managers that it is especially hard for people with complex or long-term issues to establish a trusting relationship with MSD without a dedicated case manager. The lack of an assigned case manager creates stress for both parties and results in a poor and uncoordinated service. Recipients often have to repeat their story multiple times – a situation that is, at best, frustrating and, at worst, traumatic. Many staff consulted with were equally discouraged by the current case management system – not having the time to listen and understand a person’s full story made it more difficult for staff to provide people with the appropriate support. We acknowledge that not everyone will need or want an assigned case manager.
"…main area of concern is the conditional nature of support and difficulty obtaining it. This includes the many and onerous obligations of recipients, the complexity of requirements, the lengthy waits and difficulty in communication, the frequent threat of withdrawal of support and frequently unhelpful or frankly demeaning attitude of staff.”
NGO EMPLOYEE
For people interacting with MSD to achieve positive outcomes (including having a trusting relationship with staff), sufficiently resourced front-facing services are an important prerequisite. This includes staff with sufficient capacity and capability, the appropriate systems to support staff to achieve outcomes, tools and interventions, and enough time to undertake what is required.
People we consulted with, including staff, welfare recipients and service providers, reported that MSD has a severely under-resourced workforce that is not allocated the time needed to work with people to understand and support them to achieve their goals and develop their potential. We also heard about a lack of the requisite skills and systems training for staff. Staff spoke about wanting more time with clients, much more training and more staff to do their jobs well.
Many public services are delivered via digital platforms but not everyone can use them. The move toward a more digital platform of service delivery came up often during consultation. While many supported new developments, such as MyMSD, we also received feedback that a significant group was unable or struggled to use this platform (because they, for example, lacked internet access living in rural areas without coverage, could not afford access or lacked technical knowledge to use the internet). Not being able to access information online or complete forms online meant people were more likely to need to come into a service centre, which was time consuming and costly for people in many parts of the country.
Particular groups of service users must have their needs taken into account when consideration is given to the allocation of resources. For example, in our consultation with the deaf community, we heard of the need for more information to be provided in accessible formats such as New Zealand Sign Language and Easy Read.
"…the levels of support differ and are based on our client’s needs. I definitely feel that more can be done in the case management space where we could better help and equip our clients with more information about the outside support services (that) are available. But unfortunately case managers don’t have enough time to get down to the nitty and gritty of things.”
MSD EMPLOYEE
No organisation will get things right every time. Where people believe the wrong decision has been made and they want it reviewed, transparent processes should enable them to do so. The consultation revealed a lack of faith in the current systems for reviewing a decision or interaction that has gone wrong. People had concerns that complaining about a service would have a negative impact on their future interactions and that little attention was paid to natural justice in the way the current review and medical appeals processes operated.
While there are multiple reasons for erosion of trust between MSD and benefit recipients, a significant one is the impoverishment created by the payment of desperately inadequate levels of income and the related generation of debt to MSD and other sources[39]. Developing a trusting relationship is important when working with people who have high levels of debt and poverty (McFarlane et al, 2017).
MSD has a range of products available to address hardship. Some of these products are non-recoverable Special Needs Grants, but most are in the form of recoverable grants and loans that need to be paid back. As at June 2018, $557.8 million was owed as recoverable hardship assistance (WEAG 2019b).
In addition to other qualification criteria, all hardship payments require an immediate and essential, or emergency, need that the client cannot meet from their own resources.
Another proportion of debt owed to MSD by those receiving benefits is from clients who have received money from MSD to which they were not entitled. As at 30 June 2018, this debt stood at $768.7 million. Overpayments can be a result of trying to comply with a complicated income support system that no longer flexes and adapts with the changing nature of income. Decisions relating to debt can often be wrong, and changes are made after a client has lodged a review of a decision or disputed the debt. In contrast, there is no data on clients being underpaid by MSD, that is, the debt from MSD to clients (WEAG 2019b).
"Now that I am back at work and am in debt. Every year you need to give WINZ an overview of what you have earned and what you might earn. I am so afraid I might have earned more than I thought and be penalised with even more debt.”
WELFARE RECIPIENT
Inland Revenue and MSD are both part of the wider welfare system but Inland Revenue treats debt significantly differently from MSD[40]. These two government agencies should substantially align their policies and processes to provide an equitable way of treating debt creation and reducing indebtedness. This alignment should be at both legislative and practice levels.
For some benefit recipients, the impacts of indebtedness are long-lasting, because they have no ability to repay. This includes the many MSD clients affected by long-term health conditions or disability. These clients often receive benefits for a large proportion of, sometimes all, their lives. Others are caught in cycles of low income, insecure employment and benefit receipt.
This cycle of inadequate payments requiring one-off assistance top-ups, and resulting in debt, further limits the ability of benefit recipients to sustain themselves and increases stress. It further undermines benefit recipients’ trust in MSD. These one-off payments, such as Special Needs Grants and advance payments of benefit, are usually for essential and immediate items to achieve a basic level of living.
We are concerned that a growing debt burden will undermine the ability of people and families receiving benefits to achieve the level of wellbeing intended through the social security overhaul recommended in this report. The level of indebtedness of many of those receiving benefits could result in increases in income being soaked up in high-interest and high-fee debt servicing. We support the rapid development of more stringent regulations on lending, particularly third-tier lenders, already under way. The debt burden presents a major obstacle in the achievement of the underpinning goal of whakamana tāngata, increasing the intrinsic wellbeing and dignity of the people.
An ethical lending network is starting in New Zealand. This network of community-based lenders, some with the support of major banks, makes fee-free and interest-free loans to low income New Zealanders. One of these organisations provided information to us demonstrating the significant savings that can be made by consolidating some of the highest interest loans into single interest-free loans. This supports people to become debt-free, leading to the promotion of savings and financial resilience.
Since the 1980s, anti-fraud measures in the welfare system have become more prominent. Critics of anti-fraud measures argue that they further stigmatise benefit recipients; they do not help build trust. In reality, most people do not commit fraud and want to comply (Cabinet Office Behavioural Insights Team, 2012). This view needs to underpin the treatment of people in the welfare system.
However, we acknowledge that, as in any system, a small number of people will deliberately seek to receive more than their entitlement. This behaviour is not acceptable and must be prevented, and, if fraud is committed, offenders should be punished. There are significant costs with fraud and abuse within welfare systems, including fewer funds to help people who need assistance. Moreover, those who commit fraud may face significant negative outcomes (for example, convictions reduce employability and money obtained fraudulently means less incentive to look for work).
MSD advised us that its fraud investigation unit is adopting a new three-tier approach to alleged fraud: facilitation, intervention and, as a last resort, investigation. These changes are in line with our recommended purpose and principles while also maintaining the integrity of the welfare system.
In addition to this, a fairer approach needs to be taken to the anonymous reporting of other people’s relationships to MSD. Anonymous tips can come from, for example, aggrieved former partners and can result in significant stress for the person ‘reported’ before the allegations are resolved.
Evidence about what works to prevent fraud is limited (Prenzler, 2011a; 2011b), but we support this three-tier approach and believe it fits well with a more preventative way of responding to, and reducing, potential fraud.
The principles of natural justice are paramount and should always be applied to an alleged fraud case.
The Welfare Expert Advisory Group recommends that if a decision made in the investigation stage is contended, then a review independent of MSD should be carried out and all findings applied to the case.
In the cases that result in court proceedings, we are concerned about the inconsistent treatment of benefit fraud cases, compared with other fraudulent activities such as tax fraud; plus we are not certain that prosecution acts effectively as a deterrent (Marriott & Sim, 2017). MSD should explore and look to align its approach to that used by Inland Revenue in relation to prosecutions. This would help to minimise the inconsistencies across the two government agencies responsible for providing welfare support to New Zealanders.
When someone chooses to defraud the welfare system, there are always individual attributing factors to their decision. Drivers of fraud in the welfare system include:
The repercussions of benefit fraud have a significant impact on a person’s wellbeing and often include significant debt. This does not override the underlying position that this behaviour is not accepted and must be prevented. At the same time, all necessary steps should be taken to support the person, including making sure they are receiving their full and correct entitlement and allowing them to meaningfully participate in their communities. Making it easier to comply with MSD’s processes will lead to more people doing the right thing.
We strongly support ongoing and enhanced interaction between MSD and the Department of Corrections so individuals are fully supported to best achieve positive integration when released from prison.
While work is being done to provide identification, information, health, housing and employment support to people being released back into the community, it is clear many individuals are not adequately prepared or resourced in ways that support their reintegration into families and the community and reduce the likelihood of reoffending. Access to MSD prison reintegration coordinators is very uneven, for example.
The Steps to Freedom grant is not meeting its objective of providing adequate financial support for being released from prison. The eligibility requirements and grant of up to $350 is inadequate.
Arrest and remand, even for short periods, can have huge impacts on individuals and their whānau. Benefit payments are stopped immediately and people may lose their housing (and often possessions) due to their inability to pay, and partners and children are left with no finances and having to organise this through MSD. Upon release, this can increase indebtedness because individuals are having to meet costs to re-establish themselves. In other jurisdictions (Germany, for example), rent is continued to be paid for short sentences so that housing is available on release.
New Zealand has seen consistent increases in its prison population even while crime rates have fallen (Gluckman & Lambie, 2018). Māori and Pacific People are disproportionally affected. This has implications for inflows into the welfare system.
Te Uepū Hāpai i te Ora (the Safe and Effective Justice Advisory Group) should look at opportunities to improve social and economic outcomes for those who engage with both the Department of Corrections and MSD.
People who have been imprisoned often encounter significant barriers, including accessing benefits, on release. Many encounter great difficulty securing jobs and stable housing, because of their recent incarceration. They often have difficulty re-establishing relationships with their families or other social supports. Significant investment in the welfare and justice sector is providing poor outcomes for people who have been imprisoned and their families and whānau. These poor outcomes are disproportionately felt by Māori. Significant social and fiscal costs are borne by whānau and other victims of crime. Access to stable housing, appropriate supports and employment improves life chances and reduces recidivism (Shelupanov & Ali, 2010; Visher et al, 2008).
Successive governments have supported a progressively retributive rather than a restorative approach to crime (Gluckman & Lambie, 2018). This has been accompanied through greater use of obligations and sanctions in the welfare system. In both the justice and welfare systems, it would be useful to look for opportunities for sustainable transformative change that replaces negative spending with positive investment, that enhances the ability of people to reintegrate with dignity and that increases their chances of securing employment, reducing debt and having enough money to live on.
Many people imprisoned are parents. Children with a parent in prison experience a wide range of negative impacts, including long-term poor health, educational and social outcomes and are at high risk of future imprisonment themselves (Gluckman, 2018; Superu, 2015). Taking a life course approach to those who cause harm is the basis of a whakamana tāngata approach that considers education and training opportunities, active labour market policies, public housing provision and adequate incomes.
Alcohol and other drug addictions, mental and physical illness and learning difficulties contribute to offending and are often undiagnosed and untreated in prison (Gluckman & Lambie, 2018) and in the community. Improving treatment and social services for people experiencing mental illness or addiction or both will have benefits for the welfare and justice sectors (Government Inquiry into Mental Health and Addiction, 2018; Potter et al, 2017).
Understanding gang dynamics is important, if the welfare and justice sectors are to respond in ways that will effect positive and sustained change. Gang members and their whānau have high levels of interaction with the welfare and justice systems. They are also disproportionately represented in incidences of family violence and child maltreatment. It is critical to engage with this hard-to-reach sector because the associated fiscal, social and generational costs are so high.
Fines (for example, infringement fines through local councils, NZ Police and other prosecuting authorities) are easily administered but do not discriminate on the basis of a person’s ability to pay, and a series of minor fines can easily mount up quickly from one initial offence. Fines can further compound problem debt for people on low incomes (Expert Advisory Group on Solutions to Child Poverty, 2012a).
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