The reality behind DSW's glossy brochure approach to welfare
Tony McGurk, Downtown Community Ministry, PO Box 6133, Wellington
Summary
Unlike the 1991 benefit cuts, which were announced publicly and justified by the assurances that no-one would have to go without, the constant cuts that are going on now are being carefully orchestrated to not only avoid the public outrage that the changes deserve, but also to avoid the scrutiny of Parliament.
The Department of Social Welfare now portrays itself as the country's largest 'business' where beneficiaries become 'customers' and benefits have become 'products'. If that's the case, I can't help wondering why we are here today? Because if the customer is always right then we shouldn't have 380 food banks in New Zealand at the moment.
I remember in 1992 when the Department of Social Welfare decided it was a business and it held various community meetings. One of the local managers got up and started saying, "We must ensure that we market our products to our customers, otherwise our customers will go elsewhere". As silly as this attitude is, it is true that people do go elsewhere, they go to food banks.
The department has its own marketing section' which, among other things, advertises entitlements. The politicians keep telling us that the system is functioning well and is flexible and the department reinforce this notion by producing wonderful glossy brochures and TV advertising. Unfortunately, that's as far as it goes. The attitude appears to be that as long as the idea of benefits being available is in the minds of the public then there is the belief that the benefit system is intact.
But the government has been getting on with the business of cutting back, and cutting back on the available assistance. Since 1991 that's been happening ... constantly.
A good example of the way that Social Welfare's marketing machine can dupe the public into thinking everything is okay is the recent television advertising of the abatement changes. The abatement regime has been eased to allow people to take on part-time work without huge reductions in benefit payments. That's clearly the message we get. What the advertising didn't tell us was that while the Employment Task Force had recommended changes,(1) most beneficiaries are still being hit by the harsh benefit reduction of 70 cents for every dollar of income earned over $80, They also didn't tell us that the accommodation supplement is still being abated at 25 cents in the dollar for every dollar earned up to $80. This means that for the majority of beneficiaries the most that is gained from the new regime is $9 per week, which is then taxed at the secondary rate. Then there's dealing with any work related costs such as travel or child care.(2)
The advertising also didn't tell us about an unlawful departmental policy, which the Social Security Appeal Authority has constantly ruled against, which sees benefits reduced as income is earned weekly, instead of spreading it over a year or the period worked, as the law requires. The Appeal Authority has pointed this out many times. Earnings should be averaged over these longer periods, which in many instances would bring no reduction in payments of a person's main benefit at all.(3)
Over the last few years we have also had the government's PR machine telling us that receipt of the benefit is dependency and that dependency is bad. The message is that receiving a benefit is bad. This not confined to the unemployed. For those receiving a benefit because of sickness, caring for children, being retired, or because there's no work - it's bad. The government is attempting to dispense with the idea altogether that the benefit system exists because not everyone can fully participate in a culture based on paid work, and that the reasons for this are structural and generally not within a person's control.
As in many other areas, the government seems hell-bent on pulling out of welfare altogether. If we look at the benefit system now and consider what has happened, it's crystal dear that the public safety net is simply disappearing. People have less and less access to adequate welfare and it's no coincidence that in 1996 we have 380 food banks.
The benefit cuts in 1991 were justified by the availability of the supplementary benefit system. While the key idea was to cut the main benefits, people were nevertheless supposed to be able to meet regular ongoing payments from this basic benefit. The extra assistance was suppose to be there for when something out of the ordinary happened; your washing machine broke down; or your baby pulled the plug out of the freezer or something similar. The Minister made it clear that if anyone was in need they could apply to the Department of Social Welfare for the extra add-ons, the top-ups, the special benefits, and special needs grants and advances. With this new system everything would be fine, no-one would have to go without.
A year or so after the 1991 cuts welfare groups were jumping up and down saying: 'People don't know their entitlements". The government's response was to pour thousands and thousands of dollars into publicity campaigns advertising entitlements to the supplementary benefit system. The Minister actually acknowledged that it wasn't working and she talked about her anger at people missing out.
At this point there was a slight change in the Minister's stance, where she said: "Don't worry, I know there's hardship. I know people are missing out but just hold on, the economic recovery is coming. Keep your belts tight, it's nearly here". Well last July we were told that the recovery had arrived and that the tax cuts were the reward. Unfortunately the government reduced the gross rate of benefit in order to cover the tax cuts, so beneficiaries got nothing.
The supplementary system had previously been based on the idea of people not needing to know about entitlements. If an individual had a problem Social Welfare would match up that problem with the appropriate supplementary assistance. However, the government's strong emphasis on the supplementary benefits brought with it a requirement that people became familiar with the many different types of extra benefits payable according to circumstances, and about the complex eligibility criteria, simply to put a meal on the table. Now we have a situation where people are quoting whole paragraphs of the department's policy manuals just to receive a grant for food.
People began requiring the extra assistance simply to meet ongoing living expenses. For example HNZ (Housing New Zealand) market rents alone qualify a person for an ongoing special benefit over and above the accommodation supplement based solely on the amount of rent paid.
As the extra demand on the supplementary benefit system began costing the government more money, the eligibility criteria became more and more stringent, and resulted in even government research finding that people in need could not access the assistance designed to meet that need. This was done simply by changes to office policies in every area of the supplementary benefit system. However, such moves had no statutory basis and the Social Security Appeal Authority was soon issuing decisions telling the department that their policies were unlawful. One consequence of this saw the special benefit Ministerial Directive come under the scrutiny of the High Court.
The government saw that welfare policies were not standing up to judicial scrutiny so they tried to change the law. In 1994 the introduction of the Social Welfare Reform Bill was intended to do to the discretionary and enabling parts of the Social Security Act, what Bill Birch had previously done to the ACC Ad. This would turn the eligibility criteria, particularly relating to the supplementary benefits, into highly prescriptive regulations, where to receive the assistance a person's circumstances would need to fit those very tightly defined categories, thus making it far easier for people to be legally excluded. The Social Welfare Reform Bill was an attempt to make the previously unlawful policies, lawful to legally exclude people from receiving the assistance.
Luckily, that didn't work either. The Social Services Select Committee shredded the Bill. It hasn't seen the light of day since. The public outrage was too great. It was seen that the safety net provisions within the Security Act had to be kept intact.
The government wasn't happy with this, but they needed a new way of proceeding. They needed to make sure the new way was lawful and they needed to do it in a way which avoided the scrutiny of both Parliament and the public.
One way they have used is to put more of the supplementary assistance under direct ministerial control. There are areas within the supplementary system which can be changed simply by the flick of the Minister's pen. For example the special needs grants operate under the Minister's Special Needs Grants Welfare Programme, where the Minister can just remove whole sections with his signature. Recently there have been all sorts of categories removed. For example beneficiaries no longer can receive recoverable special needs grants. Also removed has been quite a significant section of medical related assistance. The criteria of the remaining provisions are constantly being tightened - literally overnight.
Another means whereby the government is reducing accessibility to supplementary assistance is by the clever use of the "exceptional circumstances" clause. The High Court decision on special benefits ruled that ministerial directives which restricted eligibility to special benefits were in fact lawful because they had an "exceptional circumstances clause" which, in theory, provided the flexibility to grant special benefits in circumstances which went beyond those covered by the restrictive criteria, thus did not constitute an unlawful fetter on the wide discretion contained in the Act.
So now when the Department and the government develop a new policy, they make it as restrictive as possible, call it a ministerial directive, throw in the exceptional circumstances clause to make it lawful, and they achieve their goal. In many circumstances they don't have to issue the assistance because the person's circumstances do not meet the restrictive eligibility criteria and the department judges that a person's circumstances are not "exceptional".(4)
When legislative change is unavoidable the changes are tacked onto totally unrelated bills. This happened with the Tax Reduction and Social Policy Bill which few bothered reading because they thought it was only about the government's tax cuts. The Bill included some very important social policy changes, but instead of going to Parliament's Social Services Select Committee it went before the Finance and Expenditure Select Committee. The protests of those who did make submissions on the second half of this Bill were largely ignored by the media who focussed instead on the tax cuts.
The second half of that Bill went through unnoticed. However, it contains appalling provisions whereby people receiving a widow's or domestic purposes benefit with children 14 years or older will be subject to work tests from 1 April 1997.(5) Penalties range from 20% benefit reductions through to 13 week stand-downs for one part-time work test failure. The work-tests will be administered by the Employment Service. The same staff member who is the case worker responsible for finding an individual employment will also be responsible for imposing a stand-down. Apart from the fundamental shift away from the original intention behind the existence of these benefits, the changes can only bring an administrative chaos. The new legislation contains no safeguards, and food banks are going to see a huge increase in the demand for their services as of April next year as a result.
The benefit system which covered most people's costs was cut in 1991. This suddenly shifted the emphasis onto the supplementary benefit system which was never meant to do what is now required of it. The benefit system is now based on exactly what the 1972 Royal Commission on Social Security warned against. Now the supplementary benefit system is also being systematically cut.
The glossy brochure / corporate culture approach to welfare has certainly assisted the government in achieving this radical change without the public realising what has been happening. Huge sums of money are being spent on public relations which are aimed more at convincing the general public that things are running well, rather than specifically informing beneficiaries about eligibility or about how people are affected by changes. Each local Social Welfare office has its own public relations person. Their publicity keeps pus lung the message that everything's wonderful, that beneficiaries are now customers and the department is busy delivering a greater range of flexible personalised customer services and products.
The government now talks about moving people away from 'benefit dependency'. What this really means is moving people beyond entitlement. David Lange in The Dominion recently questioned how the Income Support Service can claim to be a business when a business is based on an exchange of goods and services for money. The Income Support Service does something quite different; it exchanges money for entitlement.
In the past the supplementary system has deliberately defined entitlement in broad terms and allowed the use of discretion to ensure that it was able to deal with an applicant's unique circumstances. This system is being rapidly eroded and replaced by provisions which are highly restrictive. These are the policies which bring people to foodbanks saying: "I went to Social Welfare but they told me I wasn't eligible".
Laurie O'Reilly is right when he says we have got to the point where the safety net is pinned to the ground. The public is being duped into believing everything's hunky-dory, but that's simply not the case.
(1) The Employment Taskforce heavily criticised the harsh loss of 70 cents for every dollar earned over $80, and the loss of accommodation supplement of 25 cents for every dollar earned up to $80, and recommended that these receive urgent attention. Yet for most beneficiaries, including transitional retirement and sickness beneficiaries, the situation remains unchanged.
(2) The Social Security Appeal Authority have ruled on many occasions that the Social Security
Act requires that employment related expenses, such as travel to work, must be deducted from
income earned to determine the income figure to be used for benefit abatement purposes. The
Department of Social Welfare refuse to amend their policy to reflect the legislation. See Social
Security Appeal Authority decision 96/95.
(3) For example see SSAA decisions 126/95, and 117/95. The issue is also not confined to those receiving benefits where the Act refers to annual income.
(4) The government use these provisions to ensure that restrictive policies are lawful through the mere fact that, in theory, the policy allows the department to step outside of the general restrictions. Thus (in theory) there is no fettering of the enabling provisions of the legislation. However, by definition "exceptional circumstances", and "special or unusual circumstances" mean rarely. The government claims that the supplementary system is flexible, yet the application of the general policies remain highly restrictive.
(5) The government touted these changes as being recommended by the Employment Taskforce, yet they appear nowhere in the Taskforce report.