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Social Security (Youth Support and Work Focus) Amendment Bill (Consistent) (Section 19(1)) [2012] NZBORARp 9 (16 March 2012)

Last Updated: 26 April 2019

Social Security (Youth Support and Work Focus) Amendment Bill

16 March 2012

ATTORNEY-GENERAL

LEGAL ADVICE

CONSISTENCY WITH THE NEW ZEALAND BILL OF RIGHTS ACT 1990: SOCIAL SECURITY (YOUTH SUPPORT AND WORK FOCUS) AMENDMENT BILL

We have considered whether the Social Security (Youth Support and Work Focus) Amendment Bill (“the Bill”) (PCO 15584/13.0) is consistent with the New Zealand Bill of Rights Act 1990 (“the Bill of Rights Act”). We understand that the Bill is likely to be considered by Cabinet at its meeting on Monday, 19 March 2012. We have not received a final version of the Bill and have based this advice on the most recent draft available. We will provide you with supplementary advice, if necessary.

We have concluded that the Bill appears to be consistent with the Bill of Rights Act. In reaching that conclusion, we have considered potential issues of inconsistency with s 19(1) (right to freedom from discrimination). Our analysis is set out below.

PURPOSE OF THE BILL

The Bill amends the Social Security Act 1964 (“the principal Act”) to introduce a new system of income support for young people and to change certain aspects of the benefit system by introducing a stronger work focus to some benefit categories. The changes in this Bill are part of a comprehensive package of welfare reform staged over two years, aimed at transforming the benefit system into one that is modern, active and work-focussed for adults and education-focussed for young people.

The Bill significantly reforms the benefit system in two areas:

• Support, obligations and services for 16 and 17 year olds, and 16 to 18 year old parents

(“Youth Package”), and

• Extension to work availability and work preparation for sole parents, widows, women alone

and spouses and partners of people receiving a main benefit (“Work Availability”).

SUMMARY OF BILL OF RIGHTS ISSUES

We have considered whether issues with the right to be free from discrimination as affirmed by section 19(1) of the Bill of Rights Act arise in the Bill on the grounds of age,

family status and employment status because of the limits placed on eligibility for certain benefits, and the nature of the obligations certain people have to meet (and related sanctions for non-compliance).

In the Youth Package, the Bill treats 18 year olds without a dependent child differently from an 18 year old parent, in terms of which benefit scheme they will be eligible for and the particular obligations and sanctions that will attach in either scenario. In this respect, the Bill imposes a restriction on the right to freedom from discrimination on the prohibited ground of family status. The Bill also sets up a new regime that treats 16 and 17 year olds, and 16 to 18 year old parents, differently from older beneficiaries. In this respect the Bill imposes a restriction on the right to freedom from discrimination on the prohibited ground of age. We conclude that the restrictions are both justified in terms of s 5 of the Bill of Rights Act.

In the Work Availability proposals, the Bill sets up a regime whereby one parent who has an additional dependent child while in receipt of a benefit is treated differently from another parent who has recently come onto a benefit after their subsequent child was born. In this respect the Bill imposes a restriction on the right to freedom from discrimination on the prohibited ground of employment status. We conclude that the restriction on the right is justifiable.

ISSUES OF INCONSISTENCY WITH THE BILL OF RIGHTS ACT

Section 19(1): Freedom from Discrimination

Section 19(1) 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.

Drawing on New Zealand case law on discrimination, we consider that the key questions in assessing whether there is a limit on the right to freedom from discrimination are:[1]

• does the legislation draw a distinction based on one of the prohibited grounds of discrimination; and if so
• does the distinction involve disadvantage to one or more classes of individuals?
• In determining if a distinction arises, consideration is given to whether the legislation proposes that two comparable groups of people be treated differently on one or more of the prohibited grounds of discrimination.[2] The distinction analysis takes a purposive and untechnical approach to avoid artificially ruling out discrimination.[3] Once a distinction on prohibited grounds is identified, the question of whether disadvantage arises is a factual determination.[4]
  

Justified limitation (s 5 Bill of Rights Act)

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. For example, in the Supreme Court of New Zealand’s decision in Hansen v R (Hansen) Tipping J states:[5]

Whether a limit on a right or freedom is justified under s 5 is essentially an inquiry into whether a justified end is achieved by proportionate means. The end must be justified and the means adopted to achieve that end must be proportionate to it. Several subissues inform the ultimate head issue. They include whether the practical benefits to society of the limit under construction outweigh the harm done to the individual right or freedom.

Following the guidance in Hansen, the s 5 inquiry may be summarised as:[6]

• does the objective serve a purpose sufficiently important to justify some limitation of the right or freedom?
• if so, then:
  • is the limit rationally connected with the objective?
  • does the limit impair the right or freedom no more than is reasonably necessary for sufficient achievement of the objective?
  • is the limit in due proportion to the importance of the objective?
    

Youth Package – discrimination on the grounds of family status and age

According to documentation provided by the Ministry of Social Development, young people who come onto benefit generally stay on the benefit longer than those who enter the welfare system at a later stage in life. This Bill addresses the issue of young people on welfare by changing the nature of the financial assistance young people can receive, by strengthening what they need to do in return for assistance, and by providing comprehensive support.

Clauses 7, 8, 9, 10, and 15 of the Bill change the eligibility criteria for sole parents, widows, women alone, sickness and unemployment beneficiaries, and spouses and partners of people receiving a main benefit so that a person with a child must be 19 years of age to qualify (currently it is 18 years of age).

Clause 20 inserts Part 5 – Financial support for young people. New sections 158 to 163 of the Bill, set out the criteria and grounds for granting a Youth Payment. New sections 164 to 169 of the Bill set out the criteria and grounds for granting a Youth Parent Payment. The basic eligibility criteria are that a young person is 16 to 17 years of age, or 16 to 18 years of age if the young person is the parent of a child, and the other listed criteria must be met.

New section 170 sets out the obligations on young people receiving the youth support payments, which are:

• full-time education, training, or work-based learning working towards at least NCEA Level 2 qualification of equivalent
• undertaking an approved budgeting programme and requirements, and
• for parents, undertaking an approved parenting education programme and requirements.
  

In the case of a young person with a child, the obligation to undertake education or training begins when the child is 6 months old (if there is a suitable place available in a teen parent unit) or when the child is 12 months old (if there is no suitable place available in a teen parent unit).

New section 171 provides that a young person aged 16 or 17 years without dependent children, or aged 16 to 18 years with dependent children, and who is the spouse or partner of a specified beneficiary is subject to obligations in new section 170 as if he or she were receiving a youth payment.

New sections 173 and 174 set out the sanctions imposed for non-compliance with the obligations, which include the reduction of, and in some circumstances cancellation of, youth support payments.

New sections 177 and 178 provide for money management in relation to youth support payments, such as redirections (for accommodation and utility costs), a payment card (for groceries), and an in-hand allowance. Young people can earn the right to manage their own payments if they continually meet their obligations and are considered to be financially competent.

Family Status

The grounds of discrimination under the Human Rights Act include family status, which means “having the responsibility for part-time or full-time care of children or other dependents” or “having no responsibility for the care of children or other dependents” as per s 21(1)(l)(i) and (ii).

The Bill draws a distinction based on family status between 18 year old persons without a dependent child and 18 year old persons with a dependent child.

The distinction disadvantages 18 year old persons with a child, as they will be subject to an additional year of obligations and sanctions under the Youth Package (until they turn 19) than other 18 year olds persons on benefit who do not have any children (who will be eligible for the main benefit scheme once they turn 18). In particular, the money management obligations imposed on these young parents disadvantages them by removing their choice to manage their own finances.

In our view, the objective of providing additional support and encouragement to undertake education or training to young parents is a sufficiently important objective.

The limit placed on the right to freedom from discrimination on the ground of family status, is rationally connected to the objective of providing additional support and encouragement for education or training for young parents, as opposed to 18 year old persons who do not have any children.

Young parents under the age of 18 are particularly vulnerable young people because they have just entered adulthood and already face the additional challenge of being a parent. The extension of the Youth Package for an additional year to 18 year old parents (and exclusion from the main benefit schemes) recognises the additional responsibilities and increased vulnerability of these young parents, such that they may require increased support during this time.

Including these young parents in the Youth Package for an additional year also recognises that they, as young parents who have just entered the benefit system, may benefit considerably from education or training opportunities (as opposed to work obligations under the main benefit scheme) and access to parenting courses.

For the above reasons, we consider that the distinction between 18 year old persons without a dependent child and 18 year old persons with a dependent child is justified in terms of s 5 of the Bill of Rights Act.

Age

The grounds of discrimination under the Human Rights Act include age, which means any age commencing with the age of 16 years.

The Bill draws a distinction based on age between people on benefit aged 16 or 17 years (and those aged 18 years with dependent children) on one hand, and older people in receipt of welfare on the other.

The Bill imposes money-management obligations and restrictions on young people receiving youth support payments, which are not imposed on older beneficiaries. Young parents’ education, training or work-based learning obligations also arise sooner (and attract sanctions for non-compliance) - when their child is younger - than the work obligations of an older parent.

The Bill therefore disadvantages young people by removing their choice in managing their finances, and in the case of young parents, by imposing obligations and sanctions for non- compliance on them at an earlier stage in their child’s development than for older parents on benefit.

In our view, the distinction between people on benefit aged 16 or 17 years and those aged 18 years with dependent children on one hand, and older people in receipt of welfare on the other is justified in terms of section 5 of the Bill of Rights Act for the reasons set out below.

Age limits necessarily involve a degree of generalisation, without regard for the particular abilities of individuals within that age group. In this Bill, age is being used as a proxy measure of the competence and maturity of the young person. Drawing age distinctions in order to decide who can receive taxpayer funded income support is an important and legitimate policy decision for any Government. It ensures that the allocation of limited public funds is used as effectively as possible.

The Ministry of Social Development have provided evidence that shows young people who enter the benefit system before they are 18 years of age have a significant risk of long term benefit receipt. The objective of providing assistance to young people to manage their finances and avoid adverse consequences, as well as encourage young people into education and training at an early stage, is therefore a sufficiently important objective.

1. Money management
   

The limit placed on the right to freedom from discrimination on the basis of age by the money-management scheme is rationally connected with the objective of assisting young people on benefit to manage their finances to avoid adverse consequences.

We consider that the money management proposal minimally impairs the right to be free from discrimination. Successful completion of a budgeting programme and demonstrated ability to effectively manage the discretionary portion of the benefit payment will see young people gain increased control over their youth support payment.

According to the Ministry of Social Development there are considerable gains to be made from ensuring that young people develop good money management. The limit is in due proportion to the importance of the objective as the differential income-management treatment is sufficiently tailored to a vulnerable group and there is also a credible pathway for a young person to gain control of their payment.

2. Education or training obligations (and sanctions for non-compliance) for young parents commence at an earlier date than for older beneficiaries
   

The Ministry of Social Development advises that the longer a young person is distanced from learning in a formal setting the harder it becomes to re-engage. Therefore, we consider that this limit on the right to freedom from discrimination is rationally connected with the objective of focussing on young parent’s re-engagement with formal education as soon as is practicable.

In our view, the obligation on a young parent to return to education (and sanctions for non- compliance) commencing earlier than for older parents minimally impairs the right to freedom from discrimination for the following reasons:

• young parents have been identified as a group at greater risk of long-term benefit receipt and encouraging earlier re-engagement with education or training is intended to reduce this risk
• teen parent units are available, which will provide parents with access to their children for breastfeeding, bonding and attachment and general care
• where a place in a teen parent unit is not available, the education or training obligation arises when the child reaches the age of 12 months. This provides adequate opportunity for attachment to occur and breastfeeding to be established, while also recognising the importance of ensuring that there is not a lengthy period before the young parent is re- engaged in education.
  

We consider that the significance of the objective to encourage young people to re-engage with formal education as soon as practicable in order to improve social outcomes, is in due proportion to the age discrimination between young parents on benefit and older parents on benefit, and is therefore justified in terms of section 5 of the Bill of Rights Act.

Conclusion

In our view, for the reasons set out above, the distinctions in the Youth Package on the grounds of family status and age are justified in terms of s 5 of the Bill of Rights Act.

Work Availability – discrimination on the ground of employment status

The Ministry of Social Development advises that families who have subsequent children while on benefit are at heightened risk of long-term welfare dependence. The changes in this Bill mean that where a parent has additional children while receiving a benefit, their work availability expectations will be based on the age of their previous youngest child, once their newborn turns one year of age.

Clause 27 of the Bill amends the definitions of “part-time work-tested beneficiary”, “work- tested beneficiary”, “work-tested domestic purposes beneficiary” and “work-tested widow’s beneficiary” so that:

• sole parents receiving the domestic purposes benefit will be expected to be available for part-time work when their youngest child is five years of age
• sole parents receiving the domestic purposes benefit will be expected to be available for full- time work when their youngest child is aged 14 or older
• these work availability expectations are extended to women receiving the widows’ benefit or the domestic purposes benefit for women alone, and to partners of other main beneficiaries
  

The Bill also:

• extends the existing pre-benefit activity provisions (requiring applicants to attend and participate in employment-related training, interviews and self-assessments) to applicants for whom the domestic purposes benefit for sole parents, the widows’ benefit or the domestic purposes benefit for women alone is identified as the appropriate benefit (if a benefit is granted)
• introduces an activation power that allows Work and Income to direct these groups to take steps to prepare for work before they are expected to be available for it (when their children are under five years of age)
• applies greater flexibility to the hours test for work availability expectations, and
• takes steps to reconnect people with the labour market early when they have subsequent children while on benefit.
  

Clause 32 of the Bill inserts new s 60GAE which applies to a person in receipt of a benefit who is a caregiver of a dependent child or children and becomes a caregiver of an additional dependent child. Once that additional child turns one year of age he or she must be disregarded for the purposes of assessing work obligations arising due to the age of the parent’s youngest dependent child.

New s 60GAE(4) provides that the subsequent child policy may be applied to any dependent child or children of a person who already has any dependent child or children, if the

person’s situation is analogous to that described above, or to do so would best achieve the purpose in new s 60GAD. The purpose is stated as “to improve the financial and social

outcomes for families to which those sections apply by providing earlier access to employment services and expectations.” An example of an “analogous” situation is provided in new s 60GAE(5) of a person who temporarily ceases to receive a benefit in order to give birth.

There is discretion in new s 60GAF to refrain from applying the subsequent child policy if that would best achieve the purpose stated in new s 60GAD, or there are extraordinary circumstances making it inappropriate to apply the subsequent child policy.

Employment status

The grounds of discrimination under the Human Rights Act include employment status, which means “being unemployed” or “being in receipt of a benefit” as per s 21(1)(k)(i) and (ii).

The Bill draws a distinction between one parent who has an additional dependent child while in receipt of a benefit, and another parent of two children aged five and one who recently came onto benefit after the subsequent child was born. The second parent would not be subject to the part-time work obligations until his or her youngest (subsequent) child turns five years old, whereas the first parent with children of the same ages who was in receipt of a benefit at the time the subsequent child was born would be subject to the part- time work obligations. But for the employment status at the time of the subsequent child’s birth, the situations of these two parents in the year following the birth of the second child are similar.

The second parent will have up to four more years prior to becoming subject to additional obligations (coupled with the possibility of sanctions for non-compliance). There is therefore a difference in treatment on the ground of employment status.

On balance, we do not consider that this distinction causes a disadvantage. The work

obligations are to take up “suitable employment”. The Ministry of Social Development advises that guidance on what is considered “suitable” is set out in operational guidelines and includes: access to childcare, employment with excessive hours, family commitments, religious commitments, jobs which offend strongly held views, days of the week, type of employment, skills required, experience, and location of the job.

Given the financial and social benefits of work, it cannot be said that work obligations are disadvantageous. Further, the Ministry of Social Development advises that research shows that childcare from one year of age is unlikely to have a negative impact on the child and may have an overall positive impact as long as there is access to decent employment and high quality childcare is available. The 12 month period has also been identified as supporting parents and children through critical bonding and breastfeeding milestones, and aligns expectations with the 12 month extended parental leave provisions for working parents. It also ensures that families at greater risk of long term benefit receipt are afforded earlier support and assistance to secure paid work and the social, financial and developmental advantages this provides to the family.

In the interests of completeness, we will address the justification analysis under s 5 of the Bill of Rights Act.

The stated purpose of the subsequent child policy is found in new s 60GAD, which is “to improve the financial and social outcomes for families to which those sections apply by providing earlier access to employment services and expectations”. To the extent that this indicates that the rules seek to reduce families’ long-term dependence on welfare, and in

light of the threshold nature of the sufficiently important objective inquiry, we consider that the significantly important objective requirement is satisfied.

Similarly, a rational connection can be shown, because it is reasonable to expect that these rules could lead to at least some families moving from reliance solely on benefit income and engaging in suitable employment sooner than they would otherwise have.

We consider that the limit on the right to freedom from discrimination on the ground of employment status is minimally impairing in that:

• it is fair to consider families where subsequent children have been added to an existing benefit are at higher risk of long-term welfare dependence
• proposed s 60GAF(1) of the Bill envisages that the subsequent child rules will be applied with some degree of flexibility
• reasons are available to demonstrate that the one year time period for work obligations to commence after having a subsequent child was not chosen arbitrarily
• work obligations are not unduly onerous in that they are limited to “suitable employment”

for the parent to undertake

• the legislation allows for sanctions to be forgone where good and sufficient reasons for non- compliance exist, and
• the Government routinely makes distinctions in the social assistance context, and therefore a high level of deference is afforded.
  

We are satisfied that, on balance, the introduction of work obligations for these parents who are considered to be at higher risk of long-term benefit receipt are proportionate to the limitation on the right to freedom from discrimination, such that the final, overall proportionality limb of the justified limitation test is also met.

Conclusion

For the reasons outlined above, we have concluded that the Bill appears to be consistent with the Bill of Rights Act.

This advice has been prepared by the Public Law Group and the Office of Legal Counsel. The Crown Law Office was consulted in the preparation of this advice.

Melanie Webb

Acting Chief Legal Counsel

[1]

See, for example, Atkinson v Minister of Health and others [2010] NZHRRT 1; McAlister v Air New Zealand [2009] NZSC 78; and Child Poverty Action Group v Attorney-General [2008] NZHRRT 31.

[2]

Quilter v Attorney-General [1997] NZCA 207; [1998] 1 NZLR 523 (CA) at [573] per Tipping J (dissenting) relied on in Atkinson v Minister of Health and others [2010] NZHRRT 1 at [199]; McAlister v Air New Zealand [2009] NZSC 78 at [34] per Elias CJ, Blanchard and Wilson JJ and at [51] per Tipping J; and Child Poverty Action Group v Attorney-General [2008] NZHRRT 31 at [137].

[3]

Atkinson v Minister of Health and others [2010] NZHRRT 1 at [211]- [212]; McAlister v Air New Zealand [2009] NZSC 78 at [51] per Tipping J; and Child Poverty Action Group v Attorney-General [2008] NZHRRT 31 at [137].

[4]

See, for example, Child Poverty Action Group v Attorney-General [2008] NZHRRT 31 at [179]; and McAlister v Air New Zealand [2009] NZSC 78 at [40] per Elias CJ, Blanchard and Wilson JJ.

[5]

Hansen v R [2007] NZSC 7 [123].

[6]

The proportionality test under s 5 of the Bill of Rights Act, as applied in Hansen, draws on the test articulated by the Canadian Supreme Court in R v Oakes [1986] 1 SCR 103, R v Edwards Books and Art Ltd [1986] 2 SCR 713 and R v Chaulk [1990] 3 SCR 1303. See, for

example, Hansen, above n 5, at [42] per Elias CJ; [64] and [79] per Blanchard J; [103], [104] and 120]-[138] per Tipping J; [185] and [217] per McGrath J; and [272] per Anderson J.

In addition to the general disclaimer for all documents on this website, please note the following: This advice was prepared to assist the Attorney-General to determine whether a report should be made to Parliament under s 7 of the New Zealand Bill of Rights Act 1990 in relation to the Social Security (Youth Support and Work Focus) Amendment Bill. It should

not be used or acted upon for any other purpose. The advice does no more than assess whether the Bill complies with the minimum guarantees contained in the New Zealand Bill of Rights Act. The release of this advice should not be taken to indicate that the Attorney- General agrees with all aspects of it, nor does its release constitute a general waiver of legal professional privilege in respect of this or any other matter. Whilst care has been taken to ensure that this document is an accurate reproduction of the advice provided to the Attorney-General, neither the Ministry of Justice nor the Crown Law Office accepts any liability for any errors or omissions.