Poverty in Palmerston North; previous report
Private Bag 11 042
Palmerston North
4 June 1999
Ms J White
The Mayor
Palmerston North City Council
Private Bag 11 034
PALMERSTON NORTH
Poverty in Palmerston North
Further to - Problems people are having with WINZ - getting their entitlements and benefits that are not enough to survive on.
additional case stories || appendices
Reason for this Report
This report is intended as a basis for the meeting over lunch with you on Tuesday, 8 June, and members of the Poverty Action Group
Members of the Poverty Action Group are very pleased at the outcome of the last meeting. The issues raised have been given a high profile and many individuals and groups have forwarded stories. We look forward to the presentation of the report arising from them. We would make the comment that the stories/case studies submitted represent only the tip of the iceberg as far as the real situation with claimants and WINZ is concerned. For example, the Advocacy Service sent in four stories out of a case file of over 600.
We were pleased to read that WINZ staff had met with you and that a review was to be undertaken because of the concerns raised. We are concerned however at the nature and commitment to this review by WINZ, as reports from community groups are that nothing has changed in the interim. Further, it is an internal review and many consider it lacks credibility particularly because of the culture of the organisation.
Further, instead of the treatment of claimants improving recently, we are now aware that it appears to be standard procedure for claimants with no money who have had their electricity cut off through inability to pay the bill, for their WINZ officer to instruct the electricity company to install, at the claimant's expense, a pay-as-you-go electricity meter which means that they also pay higher unit charges for their electricity into the future.
To put the claimant into a situation where they are considerably worse off into the future seems particularly punitive, contemptuous and vindictive, particularly as it is done under the guise of making sure the claimant does not get further into debt.
While some of the issues might be raised at regional (local) level to some effect, the consensus is that this is a waste of time and the issues will only be satisfactorily resolved at head office or Ministerial level.
It is particularly concerning that a meeting the Homelessness Group had asked for with WINZ staff over a period of three months and eventually set for a date, was cancelled the evening before by them - as they were not adequately prepared for it.
The general perception of the department is that they their predominant focus is on reducing the number of people on benefits and that two important ways of doing this are to prevent people from getting on them and to minimise the level of assistance granted.
This report is to provide additional information and material in support of that already presented in the previous report and should be read in conjunction with it. [1]
Some additional stories, a sample from the last week are attached.
Introduction
The Culture of WINZ
The income support part of Department of Social Welfare has been restructured three times, and the last is still continuing. One of the major restructurings was undertaken of the basis of the private sector model of a production line, with the product being the basic benefit. The driver for this was the time taken to deal with an application. While in 1992/1993 the time required (according to the purchase agreement with the Minister) was 20-35 days depending upon the benefit type. By the end of May 1994, the turnaround time had been reduced to the new target of one day.[2] (Petrie, 1998)
In 1991, the basic benefit was reduced to a level that many people found they were unable to survive on [3], particularly with State houses charging 'market' rents which means that the average tenant now pays over 40% of their income on rent with many paying over 50%.[4] This change caused the mushrooming of foodbanks. For many beneficiaries, this meant that they had to rely on supplementary benefits to survive, a situation they were not designed for.
The production line approach to benefit applications, supported by a computerised information system for IS staff, ignored this fact. It was based on the "standard" product of the basic benefit(s) and made no allowance for the much more detailed and discretionary work required for the supplementary benefits system with greatly increased numbers of applications for them.
The ability for staff to appropriately deal with such applications was thus severely restricted and compromised.
Couple this with an instruction from "the top" to not tell clients of their entitlements unless they specifically ask" in 1991 [5] and the change in vision and objectives for the organisation from "the payment of correct entitlements promptly and efficiently, in a courteous, equitable and culturally appropriate manner" as recommended by the Departmental Review in 1991 [6] to "assisting people towards self-sufficiency and independence in the community" in 1992 [7], to discussing the role of the "hassling/directive approach" in 1996 [8] and the general thrust of the 1997 Beyond Dependency Conference [9] and the subsequent advertising campaigns, and the general trend of actual income support policy becomes clearer.
On Morning Report, (Radio NZ) on 2 June, the WINZ spokesperson said that people were giving out too many supplementary benefits and that these would be limited and that budgeting is the issue. This suggestion (budgeting) is strongly refuted by Budget Advice Services generally and the foodbank and related agencies locally.
Staff are also reported as getting a pink slip on their personal file if they are caught informing claimants of their entitlements and getting merit points for keeping people off special /supplementary benefits. Staff are reportedly instructed that their initial approach should be to tell the claimant they have had enough assistance, and not what would appear the more appropriate approach, "What is your situation and how can I /we help you?"[10]
This general approach has been the subject of numerous appeals. It was also the subject of research by a Honours Law student in 1996 who reiterated the difficulties of exercising discretion in dealing with special and exceptional circumstances under an institutional culture of strict adherence to rules, computerised manuals/instructions, and the incentives created for staff by work pressures and performance standards which focused on processing speed.[11]
These processes and practices effectively undermine the effectiveness and ultimately the objective of the "customer focused" approach which is the current thrust of the Departmental approach.
The Department has on occasion advised that as the number of applications roughly equals the number granted that there are obviously no problems. However, the Audit Office issued a qualified opinion in 1993/94 and 1994/95 on DSW's non-financial information, because "the systems of the Department cannot be relied upon to correctly record certain performance information". In 1994/95 this applied to all the timeliness and accuracy measures for benefit applications and reviews.[12] Taking into account the gate keeping referred to in our earlier report, also noted by the NZ Statistics Association [13], and the findings of the Advocacy survey (Fenwick & Davidson), the Department's statement become of questionable value and meaning.
The Purpose of Income Support
What is the purpose of "income support" or social welfare?
"The Social Security Act 1964 does not have a statement of purpose as is often found in more modern legislation. Its long title says only that it is an Act to consolidate and amend the Social Security Act 1938 and its amendments. But the 1938 Act's long title does provide some guidance:
An Act to provide for the payment of superannuation benefits and other benefits designed to safeguard the people of New Zealand from disabilities arising from age, sickness, widowhood, orphanhood, unemployment, or other exceptional conditions; to provide a system whereby medical and hospital treatment will be available to persons requiring such treatment; and, further, to provide such other benefits as may be necessary to maintain and promote the health and general welfare of the community.
The concern of the legislation was with the provision of financial help for people who for one reason or another could not adequately support themselves."[14]
What constitutes a fair hearing?
According to the High Court [15] "Administrative fairness in the case of an applicant for a benefit such as a special benefit must, in my view, include an opportunity to place before the decision maker information relevant to his decision. An applicant cannot be said to have been given a fair opportunity to do this unless he or she is also given a fair opportunity to comprehend the conditions upon which such benefits are granted, and at least the principle criteria bearing on eligibility."
The Appeal Authority (98 / 95) uses this statement to support its contention " ... that where the Department has information suggesting entitlement to a benefit and fails to invite an application in circumstances where a prospective beneficiary is clearly unaware of the existence of an entitlement it has a duty to treat a later application as if it had been made at the time the information was first made available to the Department ....."
The Role of Advocates
The Methodist Social Service Centre (MSSC) through it's operation of the Palmerston North Foodbank had been aware that increasing numbers of their clients were not getting their appropriate entitlements from Income Support, now WINZ. In 1997, MSSC began to develop an emphasis on advocacy work in the hope that by doing so the demand for food-bank assistance would decrease.
Training for prospective advocates was organised and offered to the wider community. As well as providing a large group of advocates for the Service, people from a number of other agencies in the city have taken advantage of this.
The MSSC has now developed a training package for advocates which involves 5 days focusing almost entirely on the 1964 Social Security Act, the Social Welfare (Transitional Provisions) Act, 1990, their amendments and associated regulations, Ministerial Directions and Ministers' Welfare Programmes. The training also includes ethics, communication skills, social policy overview and the role of an advocate.
The Advocacy Service opened to the public on Monday 4th May 1998 under the umbrella of the MSSC. It is staffed entirely by volunteers, and office hours are currently Monday and Friday from 9.30am to 2.30pm (two part-days a week). The advocates provide a benefit-rights service whereby they assist beneficiaries and low income earners in their dealings with WINZ.
The Service currently operates out of shop premises at 117a Highbury Avenue. It operates with up to 12 advocates and several receptionists. These are rostered on and there are a minimum of two advocates on duty each half-day shift.
What have they achieved?
The statistics for the 7-month period between May 1998 and February 1999 are as follows:
Research carried out in Palmerston North last year (Fenwick & Davidson, 1998) with the Advocacy Service, found that 60% of clients had been to WINZ previously for the entitlement they were seeking. Of those, only 21% got what they needed. When the full sample of clients went to WINZ accompanied by an advocate, 50% of them got what they needed. The researchers concluded that clients are not given full information about their entitlements, are being told no, and not given the opportunity to have the decision reviewed, too often.
Further, the Department is structurally set up to disempower the "customer". The beneficiary goes in to ask for extra supplementary assistance, the case is not clear-cut, so the CSO goes to talk with the Services Manager. The Services manager has a HUGE amount of discretion (more so than CSOs), and says "No". Now the CSO is in a position where (s)he will be less likely to advocate FOR the client and argue with the SM because the SM is his/her boss, and there are employment issues involved. Even with the best working relationship, this power structure will always be biased against clients.
Discussion
ISS has a history of ignoring Appeal Authority [16] and Court rulings and WINZ appears to have maintained this attitude. The practice of requiring [17] or organising claimants into pay-as-you-go electricity is a good example. Firstly, this is contrary to S 11 of the Act. Secondly, there is a considerable amount of social security case law to show that a person cannot be put into a position of further hardship or be required to choose a more expensive option than others available that are adequate.
The Ministerial Advisory Committee on a Maori perspective for the Department of Social Welfare in 1986 charged the Department with institutional racism following a "tidal wave of criticism that the department was unresponsive and insensitive to the needs of Maori" (Petrie). Rongo Wetere, Maori Employment Commissioner, reiterated this view at the Employment Summit in Palmerston North in March this year.
The Social Services Select Committee in their 1996/97 Financial Review of DSW states "We are concerned that customers are possibly not being made aware of their full benefit entitlements ...... .......that Income Support staff in some areas are managing an average of 300 [18] customers in their caseloads, and in one area a staff member was managing a caseload of 410 customers."
Apart from the overloading issue, it is concerning to read (Petrie, 1998) that "The CSO typically [19] gives an undertaking to ensure the client is receiving their full entitlements ..... ." Surely, if claimants are to know their entitlements, this must surely be an essential standard practice rather than an optional one.
Various official papers note the problems associated with the administration of supplementary assistance [20], however, the approaches to dealing with the problems are obviously ineffectual and ineffective, and the prime reason would appear to be the over-riding emphasis on speed. The position documented in the Social Policy Agency Review report is still the same today.
The Advocacy Service
The importance and value of advocates in such an environment cannot be rated too highly.
However, the cost of maintaining the Service has put pressure on the MSSC both from a managerial oversight perspective and financially, despite the fact that the Advocacy Service has been entirely staffed by volunteers to date. The Service has been an outstanding success and has reached the point of requiring its own organisational structure and finances, a paid co-ordinator and larger premises. The aim is to provide an effective, professional advisory and advocacy service with 20 trained, part-time volunteer advocates capable of handling at least 1,000 cases per year.
The overwhelming demand for, and success of this service at the same time as increasing costs associated with the Food-Bank has placed unsustainable demands on the resources of the MSSC. The Centre is calling on the wider community to assist the Service achieve independence and financial security and has undertaken to fund the Advocacy Service until June 30th 1999.
There appears to be a legitimate role for the Council to assist the Service financially with at least a grant sufficient to match the rent as the Council did with the Manawatu Peoples' Centre. The Peoples' Centre undertook a similar advocacy role for the wider community.
However, few people have access to effective advocacy services and such services should only need to cope with exceptional difficulties rather than issues of a systematic nature. Hence the need for a major, high level initiative at local government level to the highest levels of WINZ and the Government.
One of the standard ways WINZ uses to essentially trivialise or deny that systematic problems exist is to consider any issue only on an individual case basis, and that when this has been considered by them to consider the matter closed. This approach is taken both at head office and local levels. Another way in which WINZ head office staff trivialise patterns and trends is to consider matters as "up to the local office". Both approaches have the effect of denying that a trend or pattern exists and so the pattern and trend continue.
While there may well be differences in policy and practice between head office and the regions, in at least one significant area, this is of the nature of regions not implementing head office instructions.[21]
Another way in which the department makes it difficult to make progress is the role of their "public relations" spokespeople. Their role appears to be to make sure that nothing gets past them, that they diffuse any difficult situation and to project the image that all is well and that all problems are being taken care of. This is a development since McGurg wrote his paper "The Reality Behind DSW's Glossy Brochure Approach to Welfare" in 1996 [22] and represents a significant step in promoting an image that ignores reality.
Stand-downs
An issue of real concern to workers who get dismissed is that they automatically go on "stand down" before the benefit is paid unless they take a personal grievance case against their employer to prove wrongful dismissal. This has become beyond the abilities of most people, mainly because of the costs involved. This is of considerable concern because as one Union Organiser reports [23], only 1 in 10 dismissals can be reasonably considered to be justifiable.
Loan and Interest Repayments
With respect to the recent item about the beneficiary who was considering selling a kidney to help pay off her credit card, Rankin comments "There is an underlying belief amongst social policymakers that beneficiaries are unbankable, and will therefore not have credit cards, hire purchase etc. That view is predicated on the false belief that most beneficiaries have been beneficiaries for are long time, and that they represent a different class of people to "independent" workers. In reality of course, most beneficiaries were employed not so long ago, and did qualify for credit cards while they were employed. Furthermore, most beneficiaries will be employed again sooner rather than later. Beneficiaries are "between jobs" and have every right to have credit facilities with their banks." (full report attached.)
Overpayments
Included in the stories submitted, and from the media headlines, it is clear that the department has inadequate processes in place for dealing with changed circumstances so that overpayments after full notification are commonplace. The amounts of money involved are considerable. This issue deserves as much priority attention as given to "benefit crime" and "benefit fraud" detection.
A related issue is that the cases that hit the headlines and are the subject of some of the submissions is that a considerable period of time can elapse before the department decides to recover the overpayment. It is inconsistent and often punitive in the way it does this. It seems appropriate and a useful spur to the department to get its systems in order that it be made to comply with the spirit of the Limitations Act that the rest of the population are subject to: that after 6 years the matter cannot be pursued.
Emergency Situations
The present organisational arrangements make it very difficult for people in an "emergency situation" to get attention. They often have to wait several days. The attached answer to a written question in the House makes it plain that the department must see the person the same day.
Recommendations
Ian Ritchie
for the Poverty Action Group
References
Fenwick, A. K., & Davidson, D. 1998. Are Advocacy Services Helping? Unpublished report. Palmerston North, Methodist Social Service Centre.
Petrie, M, 1998. Organisational Transformation: The Income Support Experience. Department of Social Welfare
Additional Case Stories - a sample from the last week
Woman, single, mother of two, evicted. She has been at UCOL this year, and childcare costs have meant she has had to choose each week whether to pay rent or childcare costs. If she pays both she has no money whatsoever for food. WINZ told her she couldn't get a food grant because she had paid her bills and to go to foodbank. She also told her to drop her course so she could make ends meet. Refused Special Benefit.
Man, father. Has been sworn at and told he is a fucking nuisance. Complained to management. The investigation team sent the full report to the staff member he complained about. The attitude to him did not change and he felt the situation had been inappropriately dealt with. He has a back injury. Got told 'people like you are always complaining'. He has started selling handmade goods. Was asked by WINZ for details of his first customer so they could check up on them.
Man, separated, is trying to keep up the mortgage payments on his home. Got Special Benefit for 3 months then this was stopped. Has tried to get in boarders without success. Has no money left after mortgage payment. Gets occasional work, but is penalised for it.
Woman on DPB is repaying the additional automatic DPB payment at a rate agreed to by the Department. Before it was paid off, got a letter to the effect that because it had not been paid off in full, debt collectors would be called in. This has also affected her personal credit rating via the debt collection agency.
Woman on DPB got her bank account into overdraft by $40 which meant that her rent automatic payment did not go through. She approached WINZ who told her they could not help her until she had been evicted. At that point the money required would be several fold that needed now.
by Keith Rankin
political economist and economic historian, Auckland
http://pl.net/~keithr/rf_shorts_1999_06juna.html#jun03a
On the television news (2 June) I saw an item about a middle-aged Waikato woman who relied on a benefit for income. She had a $2,000 plus credit card balance, which she could not meet the payments on. Wanting to clear the debt, she offered to sell a kidney.
While the news item went on to discuss the ethics of the trade in body parts, it ignored the wider issue of how beneficiaries, whose incomes are set at such a low level that servicing or repaying credit cards is impossible, might resolve their credit card dilemmas.
There is an underlying belief amongst social policymakers that beneficiaries are unbankable, and will therefore not have credit cards, hire purchase etc. That view is predicated on the false belief that most beneficiaries have been beneficiaries for are long time, and that they represent a different class of people to "independent" workers. In reality of course, most beneficiaries were employed not so long ago, and did qualify for credit cards while they were employed. Furthermore, most beneficiaries will be employed again sooner rather than later. Beneficiaries are "between jobs" and have every right to have credit facilities with their banks.
Even beneficiaries who don't have credit cards are likely to have private debt. There are plenty of loan sharks around who will charge them an "arm and a leg" (if not a kidney) for credit. And, most important, credit flows within extended families and between close friends are ubiquitous.
The nature of the welfare poverty trap almost forces beneficiaries to borrow to meet unplanned expenses. Additional income makes hardly any difference. Typically, a beneficiary will get to keep just 9% of earnings in excess of $80 per week. Borrowed money, on the other hand, comes whole (except for a small percentage deduction where a bank charges repayment insurance or up front fees), and does not have to be declared to WINZ.
There are special benefit provisions that may ease the lot of beneficiaries with additional financial commitments. Furthermore, it is difficult to argue that allowances should be paid to indebted beneficiaries when those who keep out of debt do not qualify.
What we do need is a public awareness that the poverty trap is even more complex and more individualised than is usually acknowledged. In addition, communities have to resolve these problems by providing informal financial support. Communities can help their overstretched members as part of the gift economy, often with a tacit but unenforceable obligation for some kind of non-cash contribution to the community on the part of the person who was helped.
In fact, the woman wanting to sell her kidney had received offers to pay off her credit card. She rejected these offers because of an overdeveloped sense of individual responsibility. For me, her response was part of the problem; part of a wider tragedy. We have so overwhelmingly bought into the atomistic culture of strictly individual responsibility and accountability, that too many of us reject the quite appropriate community solutions that present themselves.
Wellington's 'Downtown Community Ministry' Challenges DSW
DOWNTOWN Community Ministry (DCM) is challenging the Department of Social Welfare (DSW) to defend its policies in the High Court if it believes they do not break the law.
The challenge comes after DCM's advocate, Tony McGurk, helped a Wellington woman convince a Benefit Review Committee that the law requires Social Welfare to deduct the costs people incur when working part-time from the income they earn, before reducing their benefit payments.
The Social Security Appeal Authority have said on many occasions that this should happen, but Social Welfare have refused to acknowledge the rulings and apply them generally for everyone. This means that all over the country beneficiaries and advocates have to waste an enormous amount of time and effort fighting individual cases which the department knows it will lose.
"The department seems to be running scared from going to a higher court for a definitive ruling. We believe it is because the department knows it is wrong," Tony McGurk said.
It is not the first time DCM has been in the position of having proved Social Welfare policies to be wrong in law, but been unable to force the department to change its behaviour accordingly.
One example involved a decision to decline a benefit advance for food. While the law talks about "...the immediate needs of the beneficiary...", Social Welfare policy explicitly states that benefit advances can not be issued for food. The Social Security Appeal Authority made it very clear that the law does not exclude food as an immediate need'. The department continues to ignore the ruling - their policy to always decline benefit advances for food is still very much intact.
The latest case involving work related costs comes at a time when the Government is touting its 1 July changes to the amounts able to be earned before benefits are docked as a huge incentive for people to take up part-time work.
For many people, the costs of going to work are the difference between whether part-time work is earning them money - or costing them. As well as helping them get enough money to live on, part-time jobs can keep the unemployed in touch with the world of work, keeping them occupied and hopefully leading into full-time jobs. However, most benefits still subject to the harsh reduction of 70 cents in the dollar for earnings over $80. This means that for these people the most they can be better off under the new rules is only $9 a week.
However, like the Social Security Appeal Authority, the government's Employment Taskforce identified the costs people incur to be able to work as a major barrier to part-time work.
This is the issue the government has left unaddressed and for most people the costs of, for example travelling to work, are the difference between whether part-time work means more money - or costs money.
Tony McGurk says: "If the Government was really serious about this problem it could immediately instruct the department to abide by the Appeal Authority rulings to deduct work costs before reducing benefits. To refuse to do so is nothing but cowardice."
"If the government believes the department is right to refuse to apply the Appeal Authority rulings to other claimants they should encourage the department to take an appeal to the High Court.
"If they are so confident that they are interpreting the law correctly, they should have no problem defending their position in the High Court. We believe the reason that they have not done so is because they know they are wrong.
The tough abatement rates apply to people on sickness, unemployment, training, independent youth and transitional retirement benefits. Their accommodation supplements are docked 25 cents in the dollar for anything earned up to $80, and 70 cents for anything over that.
An Evaluation of the Special Needs Grants and Special Benefit Programmes,
Social Policy Agency 1993
The reality behind DSW's glossy brochure approach to welfare, by Tony McGurk for the Second National Food Bank Conference, 30 - 31 August 1996
Parliamentary Question on 23 December 1996, by Annette King to Roger Sowry
Declining applications for emergency assistance / Referrals to food banks, by Tony McGurk of the Downtown Community Ministry (Wellington), 25 November 1998
Ian Ritchie
for the Poverty Action Group
www.wairaka.net/ubinz/IR/PovertyPN4.html
