Wednesday, September 03, 2014

Labour endorses 'income management' roll-out

The National government implemented income management for youth and young parents. This involves loading most of their benefit onto a payment card which can be used for groceries and other necessities. Rent and power are paid direct and the beneficiary is left with a small cash allowance.

Indications are that this regime will be rolled out to other beneficiaries who are not managing their money ie constantly seeking more assistance.

This is a policy that enjoys popular support because people want to see children's basic needs met. It took a National government to implement it.

But here's a surprise.

Labour supports it.

Their Social Development policy paper contains this statement:

"...allow income management to be used as a tool by social agencies where there are known child protection issues and it is considered in the best interests of the child, especially where there are gambling, drug and alcohol issues involved."

But then they go backwards again:

"Labour will:
lift the abatement-free thresholds for all main benefits to $150 per week.
The initial cost of this change is estimated at $40 million a year. However, we expect this to be offset by savings made by people on benefits taking up more part-time work."
Abatement-free thresholds are notoriously difficult to set. Raising them does encourage people to work more hours. But it also makes it much more difficult for them to actually get off the benefit because the combination of benefit and work is much better than work alone.

In fairness to Labour (because I blogged recently that I couldn't find their Super policy) here it is confirmed:

A sustainable superannuation system is essential and, in fairness to all generations, requires action now. The number of Kiwis above the retirement age has increased by 24 per cent since the last census, showing action is needed to keep universal superannuation sustainable. Labour will:
gradually lift the age of New Zealand Superannuation eligibility from 65 to 67, starting on 1 April 2020 and taking 12 years to phase in.

I support the age going up but this wouldn't win my vote. Look at the timeline. Once Key, who foolishly tied himself to retaining the age at 65, is no longer PM National will move on this. They'll have to.


Anonymous said...

was wondering if this 'card'programme will be run and monitored by the MSD.In the U.S.A welfare programmes like this are run by private companies like J.P Morgan.Very lucrative contracts.

Angry Tory said...

I support the age going up

do you? Why? Why not support means testing as a quick prelude to abolition --- or even just immediate abolition?

Super is the most insidious benefit of all: the codger-dole of course paid mostly to middle class whites. The biggest money-go-aorund of the lot. Australia doesn't have a universal codger-dole at any age, neither does the UK, most of Europe, or even Scandinavia.

Given we've got a dole, state healthcare & ACC there is no reason to keep a separate codger-dole whatsoever.

S Beast said...

*head slap* Labour have got it wrong again, this time with the raising of the abatement rate. I swear this party comes up with policies after heavy drinking sessions.

What they should have done is tweaked the TAS criteria so that those with higher than usual costs can actually some take advantage of some additional income.

[Abatement rates don't apply to TAS so for example let's say you are severely disabled and on Supported Living. If your disability costs are higher than the Disability Allowance threshold it would spill over into TAS....but any money you earn Work and Income will immediately deduct the gross amount (and that net amount they get in hand is taxed at the secondary tax rate just to make it really bite), leaving you with a shortfall and effectively penalising you for working at all.

For those who are stuck in this situation earning an additional $5K while on a benefit is a pipe dream much in the same way that the IWFTC is close to impossible for those medically unable to work 15hrs/week + consistently]

Raising abatement rates will only serve to widen the gap between severely disabled and other beneficiaries. I go on about severely disabled people because they are the ones who are most likely to live in poverty and get trapped there. They deserve better.

Worse still Work and Income consider you at a disadvantage in the labor market if you can only seek a part time job. Given this^ is it wise to increase pressure in this area?

Or is a much, much smarter idea to encourage say...*shocker* full time jobs? You know, what people used to aspire to back in the day.

Anonymous said...

They deserve better.

The entire point of the New Zealand Labour Party is that they do not believe in the word deserve.