Monday, June 29, 2009

Unemployment chickens coming home to roost

Keith Rankin and Susan St John want the dole to be available without the means-testing of a partner's income. However, the choice New Zealand made way back in 1938, was to create an unemployment benefit (paid for initially through a new tax but later - c 1964 - out of general taxation) that was available to all, with no time-limits or reducing payments over time, regardless of how much or whether recipients had paid in. The price for this was means-testing.

If we want a more generous unemployment benefit, with more generous entitlements, then we need tailored unemployment insurance. In fact, people can already take out loss of income insurance privately, but many argue, why should I pay twice?

I have every sympathy with those people being made redundant and finding they do not qualify for the dole because their partner's income is too high. They have paid taxes only to find they aren't supported in return. It isn't fair. But then I have spent years arguing that the welfare system isn't fair.

By the way, the Australian income test limit provided in the NZ Herald doesn't look right to me. Here is the NZ limit of $534. That's right.

But the following is how the limit is calculated in Australia.

Partner income which exceeds the cut-out point also reduces your payment by 60 cents in the dollar.

The cut-out point looks like $775 per fortnight or $387.50 per week.

So you can get the dole if your partner works but it will be abated at the rate of 60c in the dollar if you partner's income exceeds $387.50 per week.

The dole pays $204.50 per week. If 60 cents is lost on every dollar of income your partner earns over $387.50 your eligibility would cut out when their income reached $728.33 - not $1069.

I could be wrong but wild variations eg $534 versus $1069 invite suspicion.

Update; NZ Herald - In Australia, the dole is reduced by only 60c for every dollar of a partner's income above A$387.50 ($485) a week, so a partial benefit is available until the partner earns A$1069 ($1340) a week.

Now I see the mistake. The writer has used the fortnightly dole figure of $409 to calculate a weekly cut-out point. Did this piece go out in the hard copy NZ Herald?


ICT said...

We have been hearing from many of you, that you are at your wit’s end with your job search. Whether you’re out of work or just unhappy in your job, you have tried everything – and nothing is working. Here’s the secret: what used to work won’t anymore! The entire nature of the job market – and even work itself – is now different. But we don’t want to leave you out in the cold – we have scheduled a spe?cial briefing to give you the inside tips on how to succeed, even in this market.

In this exclusive No Cost Teleseminar briefing, “How to Transform Your Career, Claim your Power and Get Unstuck in Today’s Turbulent Market Place,” on Tuesday, June 30th, 2009 at 7pm, we will share with you some critical insights into:
• How you can identify your true work passion
• How and why you must consider yourself self employed and manage your career that way even if you work for someone else
• How you can overcome the challenges created by the recent economy and still capture top dollar for your talents
• And more!

Anonymous said...

The most important thing is that the dole for Kiws in Australia is ZERO. That's right: go to Aussie and you get no dole.

And in spite of that, thousands of Kiwis are fleeing to Aussie every week. What does this show - that what matters is whether or not you want to work; not what the dole rate is.

A sensible policy would be simply to set benefits for Kiwis in NZ the same as they would get in Aussie: ZERO

do that and the whole dole and DBP problem goes away overnight.

brian_smaller said...

Lindsay - how do WINZ decide if you ar eliving in a relationship that is a marriage (or partnership or whatever).

I ask because I am renting a house in Wainui at the moment. Of the twelve people who looked at it I had nine couples (with kids) who wanted the tenancy agreement in the woman's name only. The partner in each case was working and the women were on the DPB.

Made me wonder what the real level of fraud on this benefit.