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Support for Children in Hardship Bill - Submission to Social Services Committee [2015] NZHRCSub 2 (8 July 2015)

Last Updated: 3 December 2015

SUPPORT FOR CHILDREN IN HARDSHIP BILL Social Services Committee

8 July 2015

_Introduction

1. The Human Rights Commission (“Commission”) welcomes the opportunity to make a

submission on the Support for Children in Hardship Bill (“Bill”).

2. In Budget 2015, the Government announced a package of initiatives to assist children in hardship. The Bill provides for amendments to several pieces of legislation to enable the delivery of some of these initiatives. In particular, the Bill amends the Social Security Act 1964 (“Social Security Act”) to strengthen work expectations and increase assistance for parents on a benefit and who have dependent children.

3. The proposed amendments to the Social Security Act include:

a. Increases to benefit levels and the in-work tax credit.

b. Requiring part-time work-tested parents on a benefit to seek and be available for work that averages not less than 20 hours a week, an increase from the 15 hours currently required; and

c. requiring parents on a benefit who are able to work, to seek and be available for work, and be subject to work test obligations, once their youngest child turns 3 years of age, rather than 5 as now.

Summary of Commission’s Position

4. The Commission welcomes the increase to base benefit levels for beneficiaries with dependent children and the increase to the in-work tax credit. However, the increase is relatively incremental and does not restore base incomes to pre-1991 levels (adjusted for inflation)¹.

5. Accordingly, the Commission would encourage the Committee to consider whether there is scope to amend the Schedule to the Bill to enable graduated increases in

_{income levels over time with the view of eventually restoring base income rates to}

¹ See B Easton, Does Income Inequality reduce Equality of Opportunity, 29 June 2015: http://pundit.co.nz/content/does-income-inequality-reduce-equality-of-opportunity - this notes that the level of base income recommended by the 1972 Royal Commission on Social Security would be $442 per week in today’s prices. The 1991 budget cut this to the equivalent of $301 per week.

pre-1991 levels. This could lead to significant incremental improvements in the standard of living for both beneficiaries and their children and substantially decrease New Zealand’s child poverty rate².

6. The Commission recognises the importance and benefit of meaningful paid work.

Despite this, the Commission is concerned that the proposed amendments introduce a more onerous work testing regime that is likely to increase stressors on vulnerable beneficiary families with children.

7. The Commission is concerned that this aspect of the Bill has the potential to negate any positive impact on living standards and child well-being that is derived from the above benefit rate increases. In particular, more onerous work-testing may lead to greater levels of non-compliance, leading in turn to more frequent use of income sanctions against beneficiary families with children.

International Human Rights Standards

8. The Bill engages a number of New Zealand’s international human rights obligations.

International human rights treaties, to which New Zealand is a State party, require the Government to progress the right to an adequate standard of living (including social security) and to ensure that the best interests of children and young people are a primary consideration in any legislative or administrative processes that affect them.

The right to social security

9. Article 9 of the International Covenant on Economic, Social and Cultural Rights (“ICESCR”)³ recognises the right of everyone to social security. Guidance on how the right to social security should be interpreted can be found in General Comment 19.⁴

10. The introductory section of the General Comment states that social security, because of its redistributive character, plays an important role in poverty reduction and alleviation, preventing social exclusion and promoting social inclusion. As a result the measures that are used to provide social security benefits cannot be narrowly defined and must guarantee minimum enjoyment of the right to all peoples.⁵ In addition the

_{Committee on Economic, Social and Cultural Rights (“Committee”)}

² The 1991 Budget abolished the universal child benefits and significantly reduced core benefit levels – this led to child poverty rates increasing significantly with consequential impact on child health and well-being – see, for example, Prof Innes Asher, More Income is required to improve the health of poor children, 14 May 2015, http://briefingpapers.co.nz/2015/05/more-income-is-required-to-improve-the-health-of-poor-children/

³ _{ICESCR, adopted 16 Dec. 1966 entered into force 3 Jan. 1976, G.A. Res.2200A (XXI), UN Doc. A/6316 (1966)}

⁴ Committee on Economic, Social and Cultural Rights, General Comment No.19: The right to social security (art.9) E/C.12/GC/19 adopted 23 Nov.2007. General Comments are interpretations of aspects of treaties by the international body responsible for monitoring their implementation. As such they are regarded as the most

authoritative legal interpretation of how a treaty should be implemented and indicate the requirements and

_{standards that must be satisfied to ensure a State does not breach its international commitments.}

⁵ _{Ibid. para 4.}

noted that the denial of or lack of access to adequate social security undermines the realisation of many other covenant rights.

11. In identifying the normative content of the right, the Committee specifically commented that while elements may vary according to different conditions it should always be borne in mind that social security is a “social good and not merely an instrument of economic or financial policy”.⁶ What is required to comply with Article. 9 is a system which ensures that benefits are available to address the relevant social risks and contingencies.⁷

Best interests of children and young people

12. The Convention on the Rights of the Child (“CRC”) is the main international legal instrument on the protection of children. It recognises children as rights-holders, and includes provision for specific rights of the child to both social security and an adequate standard of living.

13. The principle of the best interests of the child is one of the cornerstones of the CRC.

Article 3(1) of the CRC places an obligation on the State to ensure that the best interests of the child are taken into account in decision-making processes that affect them, requiring that:

In all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration.

14. Article 3(1) is of direct relevance to the functions carried out by government officials under the Social Security Act. The Commission notes that the Expert Advisory Group on Solutions to Child Poverty (“EAG”) considered that it was imperative that New Zealand’s social security legislation ensured that the best interests of the child were applied in all decision-making procedures that impacted upon the household income of beneficiary households with children. The EAG recommended that section 1B of the Social Security Act be amended to include a requirement that all persons carrying out functions under the Act give primary consideration to the best interests of the child when doing so.⁸

Commission’s Position

15. The Commission strongly supports the proposed increase to base benefit rates for beneficiaries with children and the increase to the “in work” tax credit. The raising of

⁶ _{Ibid. para 9.}

⁷ _{Ibid. para 11.}

⁸ EAG (2012) Working Paper 10: Reforms to the tax, benefit and active employment system to reduce child poverty, Recommendation 3, p 7, http://www.occ.org.nz/assets/Uploads/EAG/Working-papers/No-10-Reforms-to-

tax-benefit-and-employment-system.pdf

the base income for beneficiaries is the first real increase in base benefit rates since

1991. ⁹ There is significant research and evidence about the importance of families having adequate income in order to alleviate child poverty.¹⁰

16. Both the benefit rate increase of $25 per week and the increase to the in-work tax credit are positive moves that would be expected to contribute favourably to the living standard of beneficiaries with dependent children. However, this increase does not take rates back to comparable levels to those that existed prior to 1991 nor will any positive impact necessarily be sustainable.¹¹ A commitment to ongoing increases and/or regular review is essential to ensure that benefit levels are sufficient to afford beneficiaries and their children an adequate standard of living and to ensure that their position is not further eroded in real terms.

Extension of Work Availability Provisions

17. In 2010 the Human Rights Commission published the results of a National Conversation About Work¹². This report concluded that work is central to the lives of New Zealanders, whether currently in the labour market or seeking jobs. Most people would benefit from being able to access decent and meaningful work.

18. The effect of the Bill, if enacted, will be to require parents on a benefit to look for and accept work once their youngest child turns 3 years old. In addition part-time work tested parents will be required to be available for work that averages not less than 20 hours a week, rather than 15 hours. Sanctions would apply if parents did not meet these conditions.

19. There can be significant difficulty obtaining good, affordable childcare and/or work with suitable hours and flexibility to permit working parents to cover those occasions when their children are ill or otherwise require parental care and nurturing.

20. As the Human Rights Review Tribunal noted in Child Poverty Action Group v Attorney-General (a case which dealt with discrimination on the ground of employment status resulting from denial of the in-work tax credit (“IWTC”) to beneficiaries): ¹³

We are very troubled by the argument that anyone who is ineligible for the

IWTC could simply chose to go into a job and so become eligible. That cannot be realistic for all beneficiaries, and quite likely it is not even

⁹ _{Note this does not include the introduction of the Working for Families in-work tax credit system.}

¹⁰ EAG (2012) Solutions to Child Poverty: Evidence for Action p 13 http://www.occ.org.nz/assets/Uploads/EAG/Final-report/Final-report-Solutions-to-child-poverty-evidence-for-

_action.pdf

¹¹ _{See B Easton, Does Income Inequality reduce Equality of Opportunity, 29 June 2015:}

¹² _{http://www.neon.org.nz/documents/Final%20Report.pdf}

¹³ _{[2008] NZHRRT 31 (16 December 2008) at paras 187 & 188}

realistic over the short - to even medium- term for the majority of them. After all, the OECD experts described the movement in other OECD countries of single digit percentages of people who receive benefit income into work in terms of being a significant achievement...

We accept that there must be a number amongst the cohort of those who receive income-tested benefits who could work if they wanted to, but effectively choose not to. Nonetheless, we think it is regrettable that the Crown sought to argue that all recipients of income-tested benefits fall into that same category. The ability of any given person to work depends on many factors that can be quite beyond their control, including their health, the need to care for others, the availability of suitable work, and the willingness of prospective employers to give them a chance, to name just a few obvious things. Overall, we were left with a real concern that this type of generalisation as it was put up on behalf of the Crown – i.e., that all those on a benefit income are simply there by choice – represents exactly the kind of stereotyping, prejudice and disadvantage that the anti- discrimination standard of NZBORA is intended to protect against.

21. The results of the National Conversation¹⁴ overwhelmingly show that many vulnerable and disadvantaged people who lose jobs or are unemployed and receive social security assistance want to get back to work as soon as possible and to reduce their dependency on benefits. It is often the unavailability of suitable, decent work where they live that limits their employment opportunities.

22. Through the National Conversation the Commission heard repeatedly that the lack of adequate and affordable childcare, which would allow families to match their desire for part time work with the need to care for their children, is a significant limiting factor for solo parents and others who want to work. Very often available work does not match the hours offered by childcare facilities and in many rural areas childcare does not exist at all.¹⁵ To financially penalise beneficiary parents in such circumstances is inappropriate and will have a direct impact on the money available to provide basic necessities for the children of those beneficiaries. The Commission believes more support is required to assist parents to enter the workforce and to obtain and pay for suitable childcare to enable them to pursue employment and study opportunities. Such an approach is preferable to a punitive sanction based regime and is more consistent with human rights principles.

23. The extension of the current work testing regime to parents of even younger children can be expected to increase demand for available childcare places and also presumes that there is sufficient flexible paid employment suitable for beneficiary parents to transition to. Parents in receipt of benefits who are unable to meet return

_{to work expectations will face financial penalties. This can reasonably be expected to}

¹⁴ _{Supra note 12.}

¹⁵ _Ibid

negatively impact on the financial position and living standards of the household, including that of dependent children. Children are also likely to be impacted by increased stressors faced by parents who may be unsuccessful in seeking work, may have difficulty juggling the demands of paid work and family commitments and/or may have insufficient or inadequate childcare available during work hours. Strict application of return to work requirements and punitive enforcement of sanctions would not be in the best interests of the young children of affected beneficiaries and could be considered inconsistent with CRC obligations.

Conclusion

24. Although the Commission supports the effect of the Bill in raising incomes for beneficiary households with children, it is concerned about the impact and nature of implementation of the extension of the return to work provisions to the parents of younger children. The Commission does not wish to speak to this submission. However, it remains available to provide any additional advice or assistance to the Select Committee if requested.

Contact Person:

Michael White

Senior Legal and Policy Analyst

Email: michaelw@hrc.co.nz

Tel: 04 471 6752