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Social Security (Benefit Categories and Work Focus) Amendment Bill (Consistent) (Sections 19(1), 21) [2012] NZBORARp 47 (11 September 2012)

Last Updated: 28 April 2019

Social Security (Benefit Categories and Work Focus) Amendment Bill

11 September 2012 ATTORNEY-GENERAL

Legal Advice

Consistency with the New Zealand Bill of Rights Act 1990: Social Security (Benefit Categories and Work Focus) Amendment Bill

1. We have considered whether the Social Security (Benefit Categories and Work Focus) Amendment Bill (PCO 16498/3.16) (‘the Bill’) is consistent with the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990 (‘the Bill of Rights

Act’). We understand that the Bill will be considered by the Cabinet Legislation Committee at its meeting on Thursday, 13 September 2012.

2. We received a final version of the Bill yesterday and have prepared this advice as a matter of urgency. We also understand that the Bill is likely to be subject to further minor amendments before it is submitted to Cabinet, and we will provide you with further advice should this prove necessary.
3. We have concluded that the Bill appears to be consistent with the rights and freedoms affirmed in the Bill of Rights Act. In reaching that conclusion, we have considered possible inconsistencies with ss 19(1) (right to freedom from discrimination) and 21 (right to be secure against unreasonable search and seizure). Our analysis under those sections is set out below.

The Bill

4. The Bill amends the Social Security Act 1964 (“the Act”) and forms part of a package of reforms to the benefit system encouraging and supporting beneficiaries to move into paid work. Its objectives include to:
   • · reduce benefit dependency

· support an investment approach to focus resources where they will be most effective

• · support beneficiaries into work, and

· introduce social obligations for parents and encourage beneficiaries with warrants to arrest to clear them.

5. Key changes to the social security system made by the Bill include:
   • · a new system of three main benefits to replace the existing seven main benefit categories, to embed a work focus throughout the benefit system
     • · a new approach to people in the benefit system who are sick or disabled

• · introducing drug testing requirements for beneficiaries referred to a job or training programme where drug testing is a prerequisite, matched with financial sanctions for non-compliance
• · reinforcing social norms relating to children’s education and health through four obligations that beneficiaries with children must meet in order to continue receiving Government assistance, and
• · stopping benefit payments to beneficiaries with warrants to arrest unresolved after 28 days from issue (or immediately where public safety is at risk), provided the beneficiary is given notice and the opportunity to clear the warrant to arrest.

Consistency with the Bill of Rights Act

Section 19(1) - Right to Freedom from Discrimination

Social obligations

6. Under new s 1A(d), the Act’s purpose includes to impose on persons receiving certain financial support under the Act, social obligations relating to the education and primary healthcare of their dependent children.
7. The social obligations, under new s 60RA(3), require beneficiary parents to take all reasonable steps to have their dependent child:
   • · aged three years or over enrolled in and attending early childhood education until they start school
   • · enrolled in and attending school from the age of five (or six) years depending on when the child first starts school
     • · enrolled with a primary healthcare provider, and
     • · up-to-date with the core Well Child checks.
8. New s 60RB requires the Chief Executive of the Ministry of Social Development to take reasonable and appropriate steps to make every beneficiary who has social obligations under new s 60RA(3) aware of those social obligations and the consequences of failure to comply with them.
9. New s 60RC(1) ensures that a beneficiary who fails without reasonable excuse to comply with a social obligation is, except as provided in new s 60RC(2) and (3), subject to the sanctions in s 117 of the Act.
10. The exception in new s 60RC(2) provides that no sanction can be imposed regarding failure to comply with the obligation to ensure enrolment and attendance of dependent children at a registered school if that failure is also the subject of a prosecution under the Education Act 1989.
11. The exception in new s 60RC(3) provides that no sanction can be imposed under s 117 for failure to comply with a social obligation unless the Chief Executive is first satisfied that, on at least three previous occasions, the Department has

communicated with the beneficiary in respect of the beneficiary’s compliance or

actual or potential failure with any social obligation.

12. The sanctions in s 117 of the Act provide for, in the case of a first failure, a reduction in benefit of 50% until the person re-complies. If the person has not re- complied within four weeks after the reduction took effect, the benefit is reduced by a further 50% (total reduction of 100%) until the person re-complies. In the case of a second failure the sanction is suspension of benefit until the person re-complies. For a third failure the sanction is cancellation of the benefit.

Restriction on freedom from discrimination (s 19(1) Bill of Rights Act)

13. Section 19 of the Bill of Rights Act affirms that everyone has the right to freedom from discrimination on the prohibited grounds in s 21 of the Human Rights Act 1993. The grounds of discrimination under the Human Rights Act include employment status, which includes being on a benefit.
14. In assessing whether there is a limit on the right to freedom from discrimination we consider whether:1
    1. the legislation draws a distinction based on one of the prohibited grounds of discrimination, and
    2. the distinction involves material disadvantage to one or more classes of individuals.
15. The Bill draws a distinction between people with dependent children who are in receipt of welfare and people with dependent children who are not in receipt of welfare, by imposing social obligations on the former.
16. The social obligation to take all reasonable steps to ensure the enrolment and attendance of dependent children in school reflects the pre-existing legal requirement in s 20 of the Education Act 1989 that all New Zealand citizens and residents aged between 6 and 16 years go to school. As such, it does not place a greater requirement on beneficiaries, and so does not give rise to different treatment.
17. The remaining social obligations on beneficiaries to take all reasonable steps to have their dependent children enrolled in, and attending, early childhood education, enrolled with a primary health provider and up-to-date with Well Child checks, are new obligations that are not imposed on other people with dependent children. We consider that the social obligations imposed by the Bill do not give rise to disadvantage as they are designed to be beneficial through improving education and health outcomes for dependent children of beneficiaries, thereby reducing likelihood of inter-generational welfare dependence.
18. In the event that our consideration of disadvantage is wrong, we consider any prima facie discrimination to be justifiable under s 5 of the Bill of Rights Act. The disadvantage is outweighed by the best interests of the child and such obligations
    

1 Minister of Health v Atkinson & Ors [2012] NZCA 184

are routinely observed voluntarily. The obligations require only “reasonable steps” be taken by the beneficiary, which can provide for individual circumstances where it would not be reasonable to comply.

Warrants to arrest

19. New s 75B outlines the effect on a benefit where a beneficiary has an outstanding warrant to arrest in certain circumstances. New s 75B applies to a beneficiary who is not a young person as defined in the Children, Young Persons and Their Families Act 1989, if the Chief Executive of the Ministry of Social Development is satisfied that:
    • · criminal proceedings have been commenced against the beneficiary in a New Zealand court for an offence (other than offences excluded by regulations made under new s 132L)
    • · a New Zealand court has in, or in connection with, those criminal proceedings, issued a warrant for the beneficiary’s arrest, and
    • · at least 28 days have elapsed since the date on which the warrant was issued.
20. New s 75B(2) requires the Chief Executive to, as soon as practicable, give the beneficiary a notice that:
    • · allows a period of 10 working days within which the beneficiary may dispute that he or she is the person to whom the warrant to arrest applies, or take steps to resolve the warrant
    • · specifies the steps the beneficiary may take to dispute that he or she is the person to whom the warrant to arrest applies, or to resolve the warrant, and
    • · specifies the consequences of the beneficiary not resolving the warrant within that 10-working-day period.
21. New s 75B(3) applies to a beneficiary unless, at the end of the notice period, the Chief Executive is satisfied that the beneficiary is not the person to whom the warrant applies, or that the warrant has been resolved. New s 75B(4) provides that a benefit is not payable to a beneficiary to whom new s 75B(3) applies, until the Chief Executive is satisfied that the warrant has been resolved.
22. New s 75B(5) enables the Chief Executive to suspend the benefit immediately if satisfied that:
    • · the Department has received a written request from the Police to suspend the beneficiary’s benefit on the ground that the Commissioner of Police considers on reasonable grounds the beneficiary to be a risk to public safety, and
    • · that request is signed by the Commissioner of Police or a constable above the rank of inspector.

23. New s 75B(6) requires the Chief Executive, as soon as reasonably practicable after a suspension under new s 75B(5), to give the beneficiary a notice that:
    • · communicates the fact of, and reason for, the suspension, and

· specifies the steps that the beneficiary may take to dispute that he or she is the person to whom the warrant applies or to resolve the warrant.

24. New s 75B(7) provides that the position of partners and dependent children of a beneficiary to whom new s 75B(3) applies is protected. The effect of new s 75B(7) is that the partner, whether they have entitlement to the benefit or not, and where there are no children, continues to receive half the benefit and supplementary assistance, and also that people with dependent children can never lose more than 50% of their benefit.

Restriction on freedom from discrimination (s 19(1) Bill of Rights Act)

25. The provisions related to warrants to arrest could be said to raise an issue of discrimination on the prohibited ground of employment status because they draw a distinction between people with a warrant to arrest who are in receipt of welfare and people with a warrant to arrest who are not in receipt of welfare, by imposing an additional sanction on people who are on a benefit for not clearing the warrant to arrest.
26. However, the same obligation to appear in Court and clear a warrant to arrest exists for both beneficiaries and non-beneficiaries. The additional sanction is an incentive to comply which only beneficiaries face by virtue of being in receipt of welfare. People with a warrant to arrest who are not on welfare may face additional sanctions, other than the criminal law, that beneficiaries do not, such as loss of employment. As only people in receipt of a benefit can have sanctions applied to that benefit, there is not another group in comparable circumstances that they can be treated differently from (in terms of the sanction on the benefit) to give rise to discrimination.
27. However, we have considered whether the additional sanctions imposed on beneficiaries can be justified in terms of s 5 of the Bill of Rights Act.

Justified limitation (s 5 Bill of Rights Act)

28. Where a provision is found to limit a particular right or freedom, it may nevertheless be consistent with the Bill of Rights Act if it can be considered a reasonable limit that is justifiable in terms of s 5 of that Act. Following the guidance in Hansen v R, the s 5 inquiry may be summarised as:2
    1. does the objective serve a purpose sufficiently important to justify some limitation of the right or freedom?
       2. if so, then:
          1. is the limit rationally connected with the objective?
             

2 [2007] NZSC 7

2. does the limit impair the right or freedom no more than is reasonably necessary for sufficient achievement of the objective?
3. is the limit in due proportion to the importance of the objective?

29. Warrants to arrest in criminal proceedings are issued in a variety of circumstances, usually for a failure to turn up at court. The objective of suspending benefits where there is a warrant to arrest is to create incentives to comply with the obligation to appear in court. We consider this to be a sufficiently important objective.
30. The Ministry of Social Development advises that as of 16 April 2012 there were approximately 37,000 warrants to arrest outstanding in respect of 15,000 individuals, ranging from one day to several years old; approximately 55% of these individuals are beneficiaries. The rationale for intervention is that the taxpayer should not be financially assisting people wanted by the Police to evade the law. We consider, therefore, that any limit on the right to freedom from discrimination is rationally connected with the objective of creating incentives for people on a benefit to comply with the obligation to appear in court.
31. We consider that the obligation to clear a warrant to arrest minimally impairs the right to freedom from discrimination for the following reasons. Appearing in court is a pre-existing obligation imposed by the court on all people to whom a warrant to arrest is issued. The additional measure to induce compliance for beneficiaries only begins once a warrant to arrest has been outstanding for 28 days, and a 10 day notice period is given to the beneficiary to clear the warrant, or to challenge that they are the person the warrant applies to, without suspension of their benefit (except in cases of risk to public safety, in which case suspension can occur immediately following written request by the Police).
32. Further, clearing a warrant to arrest is a relatively straightforward process. If there are no ongoing concerns with the person being in the community, court registrars are generally able to clear a warrant immediately by withdrawing the warrant and, where appropriate, issuing the individual with a court date. There is also protection for beneficiaries with dependent children, in that the benefit cannot be reduced by more than 50%.
33. We consider that the significance of the objective to ensure people comply with the obligation to appear in court and that public money is not used to assist people with outstanding warrants to arrest - coupled with the credible pathway to comply with the obligation - is in due proportion to any discrimination between people on benefit with a warrant to arrest and people not on benefit with a warrant to arrest.

Section 21 – Right to be secure against unreasonable search and seizure

Drug testing obligations

34. New s 102A(1A) provides that the drug testing obligations under new s 102B(1) form part of a work test obligation under s 102A(1)(a), (c), or (f)(iv). A person who fails, without a good and sufficient reason, to comply with work test obligations can

be subject to sanctions. The drug test obligations are to undertake, and pass, a drug test that a potential employer or training provider requires candidates for employment or training to undertake, and to pass, by a specified time.

35. A drug test, as defined in s 88A, means a test to determine whether the

candidate’s capacity to work, or be trained for employment, is impaired, by

detecting the presence in the candidate’s body of one or more controlled drugs.

36. New s 102C(3) provides for the employer to be reimbursed for the actual and reasonable costs (if, or insofar as, they do not exceed the prescribed maximum reimbursement amount) of the drug test or tests the employer required and the beneficiary failed. The reimbursed costs are a debt due to the Crown by the beneficiary.
37. New s 116C(2) specifies good and sufficient reasons for not complying with a drug testing obligation under new s 102B(1), or for failing to apply for suitable employment that requires candidates to undertake drug tests, or for both.
38. New s 117(1A) to (1C) ensure beneficiaries who fail to accept an offer of suitable employment are subject to a 13-week non-entitlement period in the same way as people who become voluntarily unemployed without a good and sufficient reason.
    
39. New s 122A applies to a work-tested beneficiary who has undertaken under

new s 122(2)(b) to pass a drug test within 30 days after the date of the beneficiary’s undertaking (“the period”). The beneficiary must, at a time that is within the period, attend at the location of a drug testing provider for the purpose of undertaking a drug test.

40. A beneficiary who fails a drug test performed within the period may, in order to try to comply with the undertaking despite that failure, undertake, at the

beneficiary’s expense, further drug testing within the period. A beneficiary who does not pass a drug test within the period must be treated as a person who has failed a third time within a 12-month period to comply with any drug-testing obligations in new s 102B(1). The beneficiary’s benefit will therefore be cancelled under s 117(1)(c).

41. New s 122(4) requires the department to take reasonable and appropriate steps to make a person who has given a re-compliance undertaking in accordance with new s 122(2)(b) aware of the following matters:
    • · the consequences of failing to comply with the undertaking
    • · at least one location reasonably near the person’s place of residence that is the location of a drug testing provider that the person can use to undertake a drug test of the kind stated in new s 122A(2)(a) or (b), and
    • · that the department will pay the actual and reasonable costs the provider charges for performing, once only within the period the undertaking allows for re-complying, a drug test of the kind stated in new s 122A(2)(a) or (b), but that those costs are also recoverable from the person.

Right to be secure against unreasonable search and seizure (s 21 Bill of Rights Act)

42. Section 21 of the Bill of Rights Act affirms the right to be secure against unreasonable search or seizure. The Supreme Court observed in Cropp v Judicial Committee:3

A requirement to supply a bodily sample, and the analysis of that sample constitutes a search. Even where a contract exists between the body requiring the sample and the person required to supply it, or to submit to its being taken, if that body is exercising a public function the very entitlement to conduct any search and also the manner in which a particular search is conducted will be subject to scrutiny under s 21 of the Bill of Rights.

43. There is no power of detention in the Bill to effect the taking of a sample for drug-testing; rather all searches are to be done by consent. However, as the Supreme Court state at paragraph 21 of Cropp:

Nor can consent put the conduct of a particular search under a lawful rule outside the protection of s 21 of the Bill of Rights. Depending on the manner in which the search is undertaken, a consent may, however, indicate that it is reasonable. Whether consent has been given, and if so the quality of that consent, are clearly relevant matters when the court is assessing the reasonableness of a search. The more specific the consent is to the circumstances in which the search takes place, the more strongly it may support the view that the search was reasonable... Also relevant will be whether a consent is freely given and whether it is an informed consent.

44. The drug-testing requirements in the Bill only apply where undertaking and passing a drug test is required as part of a job application or training programme for which the beneficiary is referred. Certain jobs, for which a beneficiary might be suited, come with a requirement that a drug test be passed as a matter of health and safety, for example, jobs involving the operation of machinery or those in forestry.
45. The rationale for imposing benefit sanctions on beneficiaries who fail drug tests for jobs for which they are otherwise suited, is that people with work obligations should not actively undermine their job prospects through recreational drug use. However, the Ministry of Social Development advises that people taking prescribed medication, or people addicted or dependent on drugs will not be affected by this policy. Instead, people addicted or dependent on drugs will be offered support to deal with their addiction.
46. Further, beneficiaries who fail a required drug test can re-comply with their obligation by agreeing to stop using drugs, and receive their full benefit. If they fail a drug test obligation a second time within 12 months, they can re-comply by agreeing to pass a drug test within 30 days. Sanctions for beneficiaries with dependent children will not exceed losing 50% of their benefit.
    

3 [2008] NZSC 46; [2008] 3 NZLR 774 at [18].

47. We consider that it is a reasonable requirement that beneficiaries comply with their work obligations, and that recreational drug use is not a good and sufficient reason for failing to apply for suitable jobs. The reason for, and the manner of, the drug testing appear to be reasonable. It follows that we consider the search for controlled drugs and seizure of a sample through pre-employment drug testing requirements to be reasonable in terms of s 21 of the Bill of Rights Act.

Conclusion

48. We have concluded that the Bill appears to be consistent with the rights and freedoms affirmed in the Bill of Rights Act.
    

Melanie Webb

Acting Chief Legal Counsel Office of Legal Counsel