Understanding 'being on a benefit' versus 'being on a benefit package'

Yesterday I was being interviewed by Larry Williams when I came out with 'benefit package'. We shouldn't talk about people being on a benefit - but a benefit package. That is because only a minority receive just the basic benefit. And if they do, it is because they have other means or fewer outgoings.

This is not about attacking beneficiaries. It's about properly understanding why some are reluctant to give up what they perceive as a/ an income comparable to what they would receive through working and b/ greater security than a job.

The following tables are from the latest (2009 financial year) MSD statistical report and show what other assistance beneficiaries get;

Accommodation Supplement




Temporary additional support or special benefit



Rates of payment (in here is the biggie that all carers on a benefit receive for dependent children - family tax credit.)



There are other tables available for supplementary assistance for child or adult disability, special needs grants etc. Assistance that people who are not on benefits do not receive, unless they meet the means-tested requirements.

I take you back to a comment made to Simon Collins of the NZ Herald earlier this year.

Connie Raiwhara, who runs the Pikorua community house where Ms Heremaia attends a sewing class, said many sole parents had no qualifications and would not give up the benefit for a minimum-wage job.

A sole parent with three young children paying the $332 average rent for a three-bedroom house in Papakura would get $206 in family support and $165 in accommodation supplement on top of the $278 DPB, a total of $649 a week.

"A lot of our solo parents get well in the $700s. They are not going to go from $700 to $400," Ms Raiwhara said.

"Even if you're in a fulltime job on $400-$500 a week [after tax], childcare is $240 a week. You're working to pay for someone else to look after your child.

"Maybe they should put the wages up and maybe that would give people the incentive to go back to work."

Now let's recall what Sue Bradford et al are saying;

"The alternative group, chaired by Massey University social policy expert Mike O'Brien and including former Green MP Sue Bradford, says current benefits of $194 a week for a single adult or $366 for a sole parent with one child are "simply too low to live on"."

The whole thrust of the Alternative Welfare Group's approach is to misrepresent the situation to garner public support for 'poverty-stricken' beneficiaries which then turns into political opposition to reform.

No, it is not easy being on a benefit. It is not easy being on a low income full stop. Neither is it easy working 5,6 or 7 days a week only to lose a good part of your earnings to someone who refuses to make similar efforts.

Reminder of why welfare is in such a mess

The NZ Herald reports;

"The alternative group, chaired by Massey University social policy expert Mike O'Brien and including former Green MP Sue Bradford, says current benefits of $194 a week for a single adult or $366 for a sole parent with one child are "simply too low to live on"."

But most beneficiaries are not living on just the basic benefit. The following illustrates the additional support someone on the DPB might typically be receiving and why that disincentivises work;


TAS = temporary additional support
DA = disability allowance
AS = accommodation supplement
FTC = family tax credit

Next;

"... the alternative group says there is actually "no immediate crisis". It says beneficiaries fell from 15 per cent of the working-age population in 2000 to only 10 per cent in 2008 when jobs were available, and have risen to only 12 per cent in the current recession."

12.5 percent is a crisis when compared with the 30 years that followed the creation of social security when the total number of working age people receiving a benefit never exceeded 2 percent.

Also ignored is that those making up the current 12.5 percent are on typically much longer term benefits than the dole which made up half of all benefit uptake in the early 90s.

It says the $60 a week "in-work tax credit" for families with at least one fulltime worker should be paid to all low-income families.

This claim has been made ad nauseam. The Child Poverty Action Group took their case to the Human Rights Tribunal and lost. The Tribunal found the government had the right to discriminate in order to encourage people to work. And remember it was a Labour government they were fighting.

There is no way any of the stuff in this report is going to fly. It merely serves to remind us of the type of sentiment that got us into such a mess with welfare.

(Graphs from the Treasury Report to the [official] Welfare Working Group)

Pro-welfare activists gear up

The Alternative Working Welfare Group presents its final report today. I can't find an associated media release but just heard Sue Bradford on the radio network news talking about recommending raising benefit levels, 'full' living wages, recognition of caring and the inclusion of beneficiary wants for the system. They have an event planned in Wellington today.

Fortunately, as it stands, they have no political power to implement their desire for ever more wealth redistribution.

(Still find the Catholics and Sue Bradford an odd mix.)

The English Pointer

Still sketching every day in Eastbourne. Painting sales leave a lot to be desired but the pastel commissions are steady. Here's one picked up yesterday by the delighted owner of an English Setter.

Social Development Minister playing statistical sophistry

The Minister for Social Development released (some) November benefit numbers yesterday. The total number of people on benefits has risen from 338,000 in September to 342,000. She said this;

“We now have 342,076 people on benefits - that’s ten percent of the working age population – we’ve a long way to go to improve this picture,” says Ms Bennett.

Yet in September the Ministry benefit fact sheets showed that between 12 and 13 percent of the working age population was reliant on a benefit.

So the Minister is saying that 1 in 10 working-age people is on a benefit but the Ministry is saying 1 in 8.

In her defence the Minister will probably say she is employing the working-age definition of 15-64 years-old. Yet the Ministry officially uses the 18-64 definition for the purposes of collating and distributing statistics;

This fact sheet defines the working-age population as aged 18–64 years to reflect the minimum age of entitlement to most benefits and the age of eligibility for New Zealand Superannuation. All information in this fact sheet refers to working-age recipients of main benefits.

I note too that the increase in absolute numbers is being largely blamed on students going on benefits.

As usual with universities finishing for summer, an influx of students (5,802) going onto benefits pushed overall benefit numbers up....The biggest contributor to the rise in overall benefits in November was due to the influx of students onto benefits.

But when the students go off the benefits next year the associated decrease will be trumpeted as an improving economy or good government performance as per her statement earlier this year;

"It's really pleasing to see 5,595 young people came off a benefit in just the last month," says Ms Bennett.

"Young people have been among the hardest hit by the recession and initiatives like Job Ops and Community Max have proven vital in keeping young New Zealanders in work," says Ms Bennett.

In reality all that happens is students move between student allowance and the unemployment benefit.

Whose cost, caring?

Tapu Misa's latest column is a criticism of the Welfare Working Group's focus on paid work to reduce dependency on the state.

She "whines" (her word) that stay at home mums feel worthless and undervalued. She presumes to speak for all at home mums. Collectivists have to do that in order to find collectivist solutions. Personally I never, ever felt undervalued as an at-home mother but what I and my family think is more important to me than the views of any other faceless community.

But the picture Misa concocts is of a society increasingly ganging up on all stay at home parents.

These days the idea of staying at home to look after young children seems increasingly old-fashioned and indulgent.

Yet, strangely, more and more men are doing it. Any 'indulgence' arises from the fact that many parents are using public money to stay home. Not money their partner has earned.

But Misa never makes any distinction between the two.

Some mothers (I imagine most) work because of economic necessity, but I've had more than a few women confess to me that they needed to work for their own sanity.

The mothers I know who are resisting that trend, despite the personal and economic costs, find themselves swimming against a tide that is increasingly unsympathetic, even dismissive of the role they play in raising and supporting their children.

There it is again. A 'tide' of collective opinion.

This leads to the predictable assertion that society puts no value on 'caring', or not enough anyway.

What she really means is that the state puts no value on caring because she observes the state getting increasingly reluctant to pay for it.

That is because when the state takes on responsibility for the upkeep of individuals they do less and less for themselves and each other. Families have fewer reasons to stay together and rely on one another. I am sure that the members of the WWG do value individuals caring for one another but understand that the welfare system has undermined this.

With its narrow focus on paid work rather than care, it continues to miss the bigger picture.

No. I think it is Tapu Misa who misses the big picture.

And one more thing. She alludes to a situation developing in the US;

As the New York Times reported last week, budget cuts in schools, for example, have heightened the need for more volunteer help just as parents have less and less time to give.

The unpaid work that would have been done by stay-at-home mothers is now falling on over-burdened working mothers, who are starting to "say NO to volunteering".

High unemployment has meant more people have more time on their hands. People are stepping forward to fill roles in schools that were previously paid positions and perversely, the unions are fighting them. Out of necessity the state is shrinking and the left do not like it.

Useless information for you

The only use for the following navel-gazing information is to idly compare it to your own circumstances. My household would rank below Italy. I do almost all the gardening and housework. That is because when himself is at home he is usually doing paid work. It just continues from one computer screen to the next. And that's fine by me. He might also point out that as he puts a reasonable dollop of money into my bank account each month my work is not in fact unpaid.



Source.

Children's Commissioner on the DPB

Reading the Children's Commissioner objecting to proposals from the Welfare Working Group Options paper I wondered how the reporter could make such a major statistical error;

With 183,000 single parents receiving the domestic purposes benefit, it was important to pay attention to how changes to the benefit system would affect them.

Wrong.

So I searched the paper by 183,000. Here is the result.

Approximately 183,000 children are being raised in a family on a Domestic Purposes Benefit.

Then I checked the Commissioner's release but it wasn't his mistake. Very poor reporting on the part of the journalist who shows they are completely unfamiliar with the subject or wouldn't have made such a glaring mistake.

But back to the Commissioner's objections.

He wants single parents to be able to stay on the DPB for longer than two years and doesn't want any measures introduced that prevent more children being added to the benefit. Result? Long-term dependence. Back to the drawing board.

Yet when he presented to the Welfare Working Group earlier this year he said;

“living in a benefit-dependent home has serious impacts on child wellbeing.”

So the Children's Commissioner can be added to the long list of people who know there is a problem but don't know what to do about it. Their constant refrain is "what about the children?"

Quite. What about the children if we require no more from their parents? What about the children if parents are allowed to continue to treat the benefit as a lifestyle entitlement?

I am fully behind the documented option to reduce the DPB to one year only (with a lifetime limit on welfare). This allows time for the mother and child to bond in the case of a new birth, or time for a recovery after a relationship breakdown in the case of a separation. But one year's availability (in the majority of cases) would change the way people think about welfare and require them to start taking responsibility for their own lives. It is also in line with most working parents expectations. One year off work.

Sketching still

Fonzie.

From a photo by Carrick.

Susan picked him up at the weekend and has framed him already. Gorgeous dog.

On my 15th straight day of 'public' pastelling and I have work coming in steadily.

Key looking to move on welfare

All the usual accusations of 'beneficiary bashing' have surfaced on the back of the Welfare Working Group's options report. Tapu Misa, Gordon Campbell, Sue Bradford, the Alternative Welfare Working Group, the Greens etc.

Even Steve Maharey emerged yesterday to add his criticism to the carping cacophony.

We have heard all of this before, along with the willingness to distort everything we know about the welfare system to win the argument.

Priceless. He would know about distortion. For years he painted a misleading picture of people on the DPB as typically separated, in their thirties and highly motivated to work.

And his big idea?

What we need is an approach that will harmonise social policy with economic development and identify social programmes that make a contribution to economic growth.

If this can be done, the case for social welfare holding back growth is weakened and arguments in favour of social welfare become compelling.

I call this alternative social development because it provides a justification for redistribution by advocating resources be put into social investments that will impact positively on the economy.

Oh groan. Social 'development' was practised for years under his watch. That's what the Ministry is named after. There is, however, an economic theory called 'broken windows' that explains why redistribution of resources on the back of calamity does not add to overall economic growth.

Anyway, one theme they all keep hammering is, there is no crisis, there is no 'dependency'. For instance Tapu Misa writes;

Mike O'Brien, an associate professor of social policy at Massey University, questions the focus on dependency. He writes that other than anecdotal stories and "prejudicial assertion", no evidence is presented to support the claim about benefit "dependence".

The Group offered numerous statistics to flesh out dependence in terms of both numbers and duration of stay. But here is a quote from recent MSD research if they want it from the horse's mouth so to speak;

On average, sole parents receiving main benefits had more disadvantaged backgrounds than might have been expected:

• just over half had spent at least 80% of the history period observed (the previous 10 years in most cases) supported by main benefits
• a third appeared to have become parents in their teenage years

I have, by the way, argued frequently that the last statement is an undercount and explained why. But if this state of affairs isn't 'dependence' then it is hard to envisage what is.

So I was buoyed to read this morning that John Key will be looking for next year's welfare policy in the final recommendations the Welfare Working Group make in February.

He [Key] signalled that he also wanted final proposals from the welfare working group, due to report in February, translated into policy by the next election.

Good man. Put up some real welfare reform policy and I will vote for you. It'll be a first.

Silly name calling

NewstalkZB political commentator, Barry Soper, never worries about disguising his dislike for Rodney Hide and ACT. Here he refers to him as "Rodney Thick Hide" .

Which ever way you read it neither interpretation works. He is not thick. And he is not impervious to criticism and hostility. I made the reacquaintance of an old (but young) ACT supporter by chance the other day. We reflected on Rodney's unfailing, and often unfounded, optimism. And his sheer doggedness. The second trait is reinforced by John Boscawen's uncanny ability to never falter when he has a goal. Neither are out for the count yet.

I commented to my husband when Rodney became engaged to Louise Crome that she would want children. Not that I know her or anything about her. But I was a similar age, and newly married, when I had my first child and if it is there to out, the desire to mother is very strong by that stage. So I also wonder what that will mean for the future of ACT. Rodney becoming a father again. He is a character predisposed to sea changes. Perhaps he will draw the curtain on politics. At least he would no longer have to tolerate silly name-calling.

Don Brash delivers National a few home truths

Predictably the NZ Herald is sensationalising another Don Brash Orewa speech delivered last night with the headline, "Brash attacks Maori - again. "

The section about Maori and equal citizenship is only a small part of a speech which lays out plainly what is wrong with the way National is managing the country and what needs to happen if the economic decline is to be arrested.

Here are a few lines towards the conclusion of a 9 page speech; a recognition that particularly resonated with me;

One of the problems in any democratic society is that when left-of-centre parties are in power they tax heavily the high-income minority to win votes from the majority. For at least a time, they can be almost guaranteed of winning if they take $1,000 off one voter and give $200 to each of five voters (after clipping the ticket on the way through of course!). Right-of-centre governments feel obliged to continue that policy, even where it violates their constitution and destroys the country’s future.

The problem is that, unless those policies are reversed from time to time, we get a steady increase in the size of government, and a steady increase in the tax burden carried by the most productive members of our community. It takes courage, vision and moral purpose to reverse that trend.

Entire speech here

Liquor ban in Day's Bay

Some locals, led by one councillor Ross Jamieson, are pushing for a permanent liquor ban in Day's Bay, a traditional day-out picnicking destination for Wellingtonians, especially the young. My letter to the local rag:

Dear Editor

Law that relies on police discretion to administer it is bad law. The policing of a permanent liquor ban in Days Bay would apparently permit "a decent family" to break it. This is a recipe for harassment of the 'wrong' people, whoever the wrong people are. Probably young, brown and loud.

Councillor Jamieson has discounted "personal freedoms" in favour of preventing "loutish behaviour". He might reflect on the slippery slope he is embarking on.

Young people have been coming to Days Bay, enjoying themselves and, God forbid, drinking, for generations. Most stay out of trouble. If they break some existing law protecting person and property, police and prosecute by all means. But introducing 'discretionary' law to target one sector of society sets a very bad precedent.

A snapshot of children born in NZ today

Some useful information will come out of this long-term study launched yesterday. 7,000 children in and around Auckland will be followed from birth. This will probably be a similar exercise to the Dunedin Multidisciplinary Study into children born in the 1970s. Some key facts were released yesterday. TV3 highlighted that 45 percent of the mothers in "high deprivation areas" were not aware of Working For Families. That is probably because they have no connection with the tax system through work. They will be well aware of the benefit system and using it.

KEY ANTENATAL FINDINGS

* 40 percent of children were unplanned
* 90 percent of mothers made changes to their diet during pregnancy.
* 16 percent of all mothers did not take folate at any time before or during their pregnancy.
* More than one in 10 mothers continued to smoke through their pregnancies (with an over-representation of those identifying as Maori and living in the most deprived areas.)
* Many mothers consumed alcohol during pregnancy.

KEY DEMOGRAPHIC INFORMATION

* Forty nine percent of mothers identify as NZ European, 18 percent as Maori, 15 percent as Pacific and 15 percent as Asian.
* One in three of the Growing Up children have at least one parent born overseas.
* There are a multiple number of languages spoken by parents with one in three children being born into families where parents speak more than one language competently. One in five children will grow up in homes where English is not the main language (although 97 percent of mothers and partners are able to converse in everyday English). The most common languages spoken in the home after English are Samoan, Hindi, Tongan and Mandarin. Maori as the main language is spoken in less than one percent of homes.
* Twenty-eight percent of mothers live either on their own or with extended family (sometimes including their partner).
* Five percent of mothers are teenagers.
* Ten percent of mothers needed fertility assistance to get pregnant.
* Half of the children are born into families living in rental accommodation (public and private).
* Forty percent of children are born into families living in the most deprived areas of New Zealand (according to NZDep 2006 indices).
* Nearly half (45 percent) of mothers in high deprivation areas were unaware of Working for Families.
* Children are born into families which are highly mobile with more than half having moved more than twice in the last five years. This is often within a neighbourhood.

KEY STUDY INFORMATION

* The mothers of the Growing Up children were recruited during their pregnancies during 2008, 2009 and 2010.
* The mothers lived in the Auckland, Counties Manukau and Waikato District Health Boards at that time.
* Many have left these areas but remain in the study.

The Welfare Working Group Options Report

The WWG report is very long and laced with tens and tens of options. Some sound and some silly. But they seem resigned to putting up everything bar the kitchen sink. There are various media reports which attempt to pick out what each author considers the main options.

Stuff.

The NZ Herald.

Otago Daily Times.

The mistruths from the left start.

Sue Bradford:

By using figures that assume people on the DPB and Invalid's Benefit, will stay on them for the rest of their lives, assumptions are made about welfare costs that are completely biased and unrealistic.

The assumptions are based on the actual average time that DPB and IB recipients stay on a benefit.

This is what the report says;

For someone currently on a benefit, it is estimated that the total cost of all future benefit payments will be $192,000 for a person on the Invalid’s Benefit and $161,000 for someone on the Domestic Purposes Benefit, compared to $65,000 for a person on the Unemployment Benefit.

I only had time to read the executive summary yesterday. There are options covering time limits, work-testing the DPB much earlier than is currently the case, investing up front based on what a beneficiary is likely to cost if left to their own devices, a far more paternalistic approach to teenagers, changing abatement rates, supplementary assistance regimes etc. Responses are invited if you feel inclined to. (Try this link later)

The alternative group's report is due out December 9.

Must read about the mine and minds

Superb post by Stephen Franks regarding the mining disaster.

Provoked by it I have two thoughts. There are families who want to be at the site, camping out, whatever. They want to be as near as they can to their loved ones, an understandable human impulse. According to an interview with a father yesterday they are being prevented from doing so. Until something as devastating as this event occurs you will not know how unfree you are in this country.

Two. There are fathers and brothers and others who want to go in, even against the odds. Perhaps they feel that they would prefer to lose their own life trying, than live it in the knowledge they did nothing - or were forced to do nothing. That is how I would be feeling if my son was down there.

I do not know how much longer the coasters are going to stand for this.

Trying to keep up

My shop is going well. I am sketching from 8.30 to 4 daily and the time flies. What was going to be 2 weeks is now 4. We have the Eastbourne Carnival on Sunday and Xmas market December 12. Trying to keep up with my other stuff - welfare, blogging and my other part-time pharmaceutical stock take business - is tricky.

The Welfare Working Group options paper is being released today. I don't have an internet or wireless connection at the shop so I am going to be behind the eight ball. An offer of an embargoed copy late last week hasn't materialised. Neither is it up at the website.

Nevertheless it is good to see Rebstock focussing on young people in her pre-release comments. My presentation to the WWG had the same focus. I was asked to present on , Should NZ adopt the sole parent policies of other countries? My aim was to persuade that teenage birth - Maori in particular - was driving the long-term reliance on the DPB and all of the attendant problems. The teenage birth(s) is usually just the first of more that will produce children dependent on welfare.

My fear is that the paper will recommend more support for teenage parents as opposed to changing the system so as to not encourage them in the first place. After all, NZ does have one of the highest teenage birth rates in the developed world.

Reflecting further on the subject of yesterday's post, the kicking to death of a two year-old child by a gang associate, whose mother was also jailed for assaulting the child, criminals have always had children and always will. That's just the way it is. But if you were going to design a system where they were encouraged to have even more, paying them to is surely it.

Never, ever kick a baby

Reading about the death of a toddler after being kicked by some guy screwing (I was going to say 'in a relationship with' but that seems overly generous) the mother I wonder if it isn't time for a campaign telling young men (again 'men' seems inaccurate) to never, ever kick a baby. Obviously telling them to never, ever shake a baby hasn't sunk in in this instance. Or maybe as babies can't be shaken, and babies can't be smacked, only kicking is left.

I hope he is found guilty of murder and goes away for a lot longer than he will if his defence team successfully argues for manslaughter. In all likelihood he was probably wretchedly abused himself as a child but that has made him a danger to any other children of women he hooks up with (if they aren't already at risk from their own mothers). He needs detaining until age takes its inevitable ameliorating effect on his innate violence.

For God's sake, "a poor parenting decision?" What kind of twisted disinfecting crap is that? Whoever dreamed up that description insults the memory of the dead child and somehow mitigates what was a brutal killing.

Testing the Spirit Level thesis in NZ

Unbeknownst to me last week Victoria University hosted a conference about wealth inequality. They invited academics to address the findings of the Spirit Level (already widely criticised and exposed for some dodgy representation of statistics). According to the NZ Herald;

The greater the gap between rich and poor, the more likely people will grow up a drug user, a criminal, less educated, obese, pregnant while a teenager, even less trusting of others.

The New Zealand poor comprise non-wealthy welfare recipients and the non-wealthy workers. The problems that are attributed to wealth inequality are more prevalent among beneficiaries than among the working poor. That is amply illustrated by the difference in the incidence of these problems (bar obesity which has its roots in traditional diet/lifestyle change) between Maori and Pacific people. Teenage pregnancies, criminality, and substance abuse are more prevalent among Maori. Maori are far more likely to be on benefits than Pacific people.

What is even more striking is that Asians are the least wealthy group yet, thus far, do not under-achieve, abuse drugs or offend in disproportionate rates. Their various cultures are not beset with social problems. I don't suppose any academic raised these flies in the ointment.

The two things that work against the problems identified are strong families and work. Both are eroded by unconditional welfare. Not by income inequality.

Blaming income inequality is too easy. It also means the wrong solutions are identified. Those solutions are however very seductive to people who frame any and every problem as a lack of money.

Forum chair Jonathan Boston, the director of Victoria University's Institute of Policy Studies, said there was enough evidence to support the general thesis in The Spirit Level.

"My personal view is that we can have some confidence that more equal societies - other things being equal - have better social outcomes across a range of measures. It may not be absolutely conclusive, but I think it's reasonably persuasive."

Great. If the academics don't get it you can be sure the politicians won't. What concerns me is the host institute is also the home for the Welfare Working Group, providing advice and research etc. That they embrace the Spirit Level thesis doesn't bode well for that exercise.

Pointless position

Another pointless position National could axe rather than re-fill.