Sanctions, Sanctions, Sanctions

Work and Income has developed a culture of punishing beneficiaries, in most cases unlawfully.

Recently, a story emerged of Work and Income issuing a sanction on a woman after she went on a couple of Tinder dates in which her date paid for dinner and a movie. After the allegations were raised with Work and Income, they stated the reasoning had been miscommunicated by the case manager, and her benefit had actually been stopped due to allegations she had been living with a partner and had failed to attend two meetings which they had arranged. The beneficiary states she never received any communications from Work and Income regarding either meeting, an investigation, or the upcoming sanction. She also affirmed that she keeps on top of her communications with MSD, and makes sure to keep track of any mail, email and phone calls which come in.

There are standards Work and Income need to meet if they wish to institute a sanction against somebody. The Social Security Act lays out the requirements for notices which must be given prior to the commencement of a sanction. A notice must be given:

 

(a) stating that the beneficiary has failed to comply with a specified obligation under this Act; and

(b) specifying the nature of that non-compliance; and

(c) stating that, on the basis of that non-compliance, the chief executive is reducing, suspending, or cancelling the benefit payable to the beneficiary; and

(d) specifying a date on which the reduction, suspension, or cancellation is to take effect, and, in the case of a reduction or suspension, the nature and duration of the reduction or suspension; and

(e) stating that the beneficiary has 5 working days from the giving of the notice to dispute the reduction, suspension, or cancellation; and

(f) advising the beneficiary to contact the department if the beneficiary wants to dispute or discuss the decision to reduce or suspend or cancel the benefit; and

(g) containing a clear statement of the beneficiary’s right, under section 10A, to apply for a review of the decision, and of the procedure for applying for a review.

 

Despite how clear this section of the Act is, I’ve never seen a sanction notice which complies with it. Primarily, sanction notices fail to meet the requirement of subsection (a), which requires the failure to meet an obligation under the Act to be specified. This means a reference to the Act, not a vague description of what the case manager believes to have happened. This is particularly relevant to the Radio NZ article, as Work and Income do not, in the article, specify the sections of the Act which the beneficiary is alleged to have contravened. If they had identified these sections in a notice to her, they would have them easily to hand and would be able to justify the sanction.

However unlawful, this is normal behaviour from Work and Income. I have spent weeks arguing this exact point with Service Managers right across the North Island. Despite their clear contravention of the law, these managers inevitably refuse to lift their unlawful sanctions until the very last minute where the review process requires further investigation by another section of MSD. This refusal results in weeks and weeks of limited or no income for beneficiaries reliant on Work and Income to survive.

When these sanctions are imposed unlawfully, and the decision is overturned, the people responsible for their imposition face no penalty. All that happens is the sanction is reversed, and the beneficiary backpaid. However, in this period typically the person suffering the sanction has had to run up debt, and has incurred further costs as a result of their loss of income.

In order for our social security to be fair, either service centres need to suffer penalties when they break the law, or they need to have the power to issue sanctions removed. While the unchecked ability to issue unfair and unlawful sanctions remains, we will continue to hurt beneficiaries and make life even more difficult for those struggling on already insufficient benefits.

WINZ Misusing the Otago Food Cost Survey

The Department of Human Nutrition of the University of Otago produces a yearly food costs survey. It’s intended to provide a statistical measure by which the cost of living can be inferred. As a tool for showing trends in food costs over time, it’s invaluable. However, Work and Income offices have been using this survey as a yardstick for how much should be given to those applying for food grants.

This is reflected in the methods used by the university, packaged items surveyed are suitable for a small family, so provide a steady benchmark for the costs which could be typically expected. The cost per gram is then calculated and this is multiplied by the average amount each person should be expected to consume in a week.

Shelf prices only are used (not specials/promotions). If more than one brand is available, then the lowest priced item (including in-house brands) is recorded. The package sizes surveyed are appropriate for a family of four. If the specified package size is not available, then the price and size for the next closest size is recorded. Some produce items such as broccoli and avocados are sold per item rather than weight. For these foods, five to six items are weighed and the average is used.

Survey averages and actual costs can differ significantly. A family of 4 might be expected to consume 840g of cheese in a week, so the cheese surveyed is in 1kg blocks. A 1kg block of cheese currently costs around $8.50, so the survey assumes the cost per gram of cheese is $8.50/1000g = $0.0085/g and the cost calculated by the survey for the same family of 4 is 840g x $0.0085/g = $7.14. For a single woman, the cost would be 210g x  $0.0085/g = $1.79.

These costs clearly do not reflect the reality for a single woman. Perhaps, on average, over the year she’d spend $1.79/week on cheese. However, if her pantry is empty, she’d more than likely spend $6.20 on a 500g block.

The practices of these Work and Income service centres do not reflect the differences between the survey and reality, somebody applying for a food grant will have almost completely empty cupboards. In order to be given a food grant, you need to have an immediate and essential need for food, which means you must have almost none and no money with which to purchase more. This makes application of the Food Cost Survey entirely inappropriate, its usage is not at all reflective of its purpose, and it falls flat as a result.

To make matters worse, Case Managers often like to perform a further calculation to reduce the amount of food grant given to the applicant. They will multiply the amount supplied by the survey by the proportion of the week remaining until the next benefit payday. A solo mum with a 5 year old would be expected to pay an average of $96/week for food at the absolute minimum, so if there are 4 days remaining until next payday, the food grant amount will be calculated as $96 x 4/7 = $54.86. This is clearly ridiculous, as it assumes the two would buy 4.6 eggs, 2.6L of milk, 120g of margarine, 160g of sugar, and 57g of tomato sauce.

Additionally, the Food Cost Survey has 3 different bands which can be used to estimate food costs; basic, moderate, and liberal. Work and Income consistently use the basic band, which assumes that all food is cooked from scratch, and doesn’t allow for any take-away or pre-prepared meals.

Further, the section of the Food Cost Survey covers standard ingredients costs, but not all the ingredients required to make a meal. A family so short on money that they have to apply for a food grant likely won’t have enough dishwashing liquid or seasoning for food. They might also lack the cooking facilities required to produce a decent home-cooked meal.

There is only one person who knows how much money is needed for a food grant, and that’s the person applying. The questions I always ask when doing advocacy are “how much money do you spend on food for a week?” and “how much money do you need?”. These are really the only questions Work and Income should ask when somebody comes in to apply for a food grant. The costs could be more or less than what they calculate from the survey, but they will accurately reflect the real need of the applicant.

Clearly, Work and Income have misinterpreted and are misapplying a good piece of academic research. The Food Cost Survey is fantastic for showing historical trends of food costs, and shows how these differ by region and age/sex demographic. It might have a place, if correctly interpreted, to set a benchmark for the absolute minimum that is allowed to be given out in food grants; but it is currently being abused as a tool, causing further suffering for those who need the most help.

Accommodation Supplement: A Decade of Negligence

With a liberal government back in power, we can all now breathe slightly easier. But the ruthless commitment to austerity of the previous National government is still felt among our most vulnerable communities.

Just before they left power, the National government, for the first time, increased accommodation supplement rates. These changes have just come into effect as of the 1st of April. While any increase is better than none, this is no saving grace. The increase in accommodation supplement levels still has not kept up with the increase in rents.
Accommodation supplement was last varied in 2007, when it was increased to levels proportionate to 2005 rents by the previous Labour government. Between 2005 and 2017, overall house rental prices rose from $268/week to $437/week, an increase of 63%. This increase is only partially accounted for by the accommodation supplement increase, with the largest increases being given to families with children living in the regions. These families are to receive a maximum of $120/week, up from $75/week in 2007; an increase of 60%.

Those receiving the lowest increases are single people living in major cities with maximum increases of $5 or $20 for those living out of and in Auckland respectively. This accounts for a pitiful 5% increase for some.

In total, these increases average out to about 37%, nowhere near the nationwide increase in rents of 63%. A lot of people who rely on these supplementary benefits will not feel much better off as a result of the increase, and will still be hurting a lot more in comparison to 10 years ago. This is to say nothing of those of us languishing as tenants in Auckland, where rents have increased significantly more over the past decade.

The news is not all bad, however. A lot of suburbs have moved from Area 2 designation to Area 1; this increases the maximum accommodation supplement significantly. Prior to these changes, south Auckland, west Auckland, several towns in north Waikato, Tauranga and Queenstown were in Area 2. This will have a dramatic impact for some families, a solo mum with one child living in South Auckland will see her maximum accommodation supplement increase from $125/week to $235/week. This is a change which has been badly needed for a long time.

The danger, of course, is that these increases will be swallowed by landlords and property managers as has happened to students in Wellington. One of the great contradictions of accommodation supplement is as it gives beneficiaries the capacity to afford greater rents it also gives landlords the capacity to charge beneficiaries more. With such great demand for homes, and such short supply, we’re in a seller’s market; rents are only limited by what tenants can afford to pay.

While it’s great to finally see an increase in accommodation supplement, they don’t go far enough to fixing the issues in our system. What we really need is a comprehensive solution, with rental controls for runaway rents, a proper capital gains tax to remove the incentive to invest in property, regulations around quality of rental housing, a radical re-build of state housing and on top of all of this, a further increase in accommodation supplement to cover the actual increase in rental costs over the past decade.