Tuesday, June 25, 2013

A new DPB trend?

Recently Treasury released a Working Paper which analysed benefit flows in the social security system. A couple of numbers caught my eye.

The aim was to look at flows on/off/between benefits pre- and post- GFC (pinpointed at QMay2008).

The benefit is coded and in the case of the DPB, additional information provided  such as age, whether there were dependent children or other income.

The two lines I queried with the author of the paper were these:

DPB18_nc_no with 363 average entrants pre and 1096 average entrants post GFC
DPB30_nc_no with 504 average entrants pre and 1393 average entrants post GFC

Did he have any knowledge of why people on DPB with no children and no income featured far more entrants post GFC? I had my suspicions, but I never received a reply.

I believe these are people going on to DPB - Care of the sick and infirm. And it occurred to me that as some people were made redundant, they wouldn't be able to pay for care for an ageing, ailing parent.

So I asked MSD some relevant questions.

1/ How  many people were receiving DPB Care of Sick or Infirm at March 31, for each year 2006 through to 2013? Their table:

The numbers on DPB - Care of the Sick and Infirm have doubled since 2006.

4/ Does MSD record the relationship status between the carer and the individual being cared for, and if so, how many carers are providing care for a parent?

Just as they don't record the relationship status between a DPB caregiver and dependent child. That presents a huge gap in their knowledge.

The letter did contain a sentence about the increase: "A reason for this increase is that in 2004 the policy was clarified and confirmed that DPB - Care of sick or infirm can be paid to a parent who is a required to provide full-time care and attention at home to their dependent child who would otherwise need hospital care."

But as the Treasury analysis shows, at least half of the inflow had no dependent children.

4,000 extra DPB Care of the sick and infirm represents about $70 million more per annum.

Given their new actuarial approach to the benefit system, you'd think the Ministry would be a bit more on to what looks like a developing trend.

When you think about it, another consequence of DPB-driven family breakdown could feasibly be an increasing incidence of adult children of single mums, quite probably single daughters, trying to look after both themselves and their ageing parent.

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