Social Assistance (Living Alone Payments) Amendment Bill

I seem to be the only one who is expressing such enthusiasm to speak on the Social Assistance (Living Alone Payments) Amendment Bill. I rise to share Labour’s support for this bill. I think it is a common-sense change that we will be debating at the Committee stage today.

Just to refresh the memory of the Committee around the purpose of this bill, it will amend the New Zealand Superannuation and Retirement Income Act 2001 and the War Pensions Act 1954, and it does so in order to simplify the arrangements for those who would be eligible for a living alone payment. Currently, single superannuitants and veterans pensioners who are living alone are eligible for a supplementary benefit, and I think that is common sense. Obviously, the costs of being a single superannuitant—you do not get, I guess, the economies of scale you have when you are in a partnership. But those supplementary benefits are applied for separately, and this bill, instead of having that additional supplementary payment, introduces a new single living alone rate for superannuitants and for veterans pensioners. It is also intended to remove the need to make a separate application for receiving the full entitlement. I think it is also important to point out that often those who are entitled to these single payments become entitled after the passing of a partner or a spouse or a loved one. Trying to simplify this process for them at that point, I think, is not only important but also common sense. There are some issues, therefore, around the transitional arrangements, which I am sure members of this Committee might be interested in canvassing as we debate the individual clauses of this bill.

I want to start, though, by looking in a little more detail at the impact of some of the definitions within Part 1. In new section 4A the bill sets out the meaning of “living alone”. Given that all of the major parts of this bill hang off that definition, I think it is important to explore it. It sets out that a single person is living alone only if he or she meets two conditions, and they are what you would expect. The first is around dwellings and occupancy, and it sets out there in subsection (2) that “The first condition is that person A occupies a principal place of residence of a kind described in subsection (6).” That provision is quite detailed; it even goes on to talk about a boat or craft mooring being a suitable residence for that definition.

Then it sets out a condition where, probably, there might be a few more issues of debate, and it is that “The second condition is that person A does not share that residence with any person 18 years or older, except a person to whom subsection (4) or (5) applies.” The bill then sets out that “This subsection applies to “person A’s dependent child—(a) who is—(i) 18 years old … (ii) not financially independent; and (iii) attending a school or a tertiary educational establishment; but (b) only until the close of 31 December in the year in which the child turned 18 years old.” So if we strip that back, what the bill is saying is that you are entitled to the living alone payment as long as your child is either in secondary school or at a tertiary education institution but under the age of 18 years. So, basically, you are never going to be able to claim the living alone payment if your child is over the age of 18 and outside of secondary school, essentially.

That may seem to be common sense on the face of it, but we took some issue at the Social Services Committee with the fact that this could be deemed to be a very narrow set of conditions for what sometimes can be extraordinary circumstances. The first of those extraordinary circumstances that I wish to raise is, in fact, where an individual is caring for a dependant who is over the age of 18 and who may have an intellectual disability, for instance, and they have some kind of carer role for that dependant. Technically, once the dependant hits 18, the carer could fall outside of these criteria. One could argue that under the Social Security Act they may be entitled to some other form of benefit, but I think it makes sense that, instead, we make sure we build in enough flexibility to take into account those circumstances without opening it wide enough that it can be used inappropriately—for example, being applied to circumstances where perhaps a DPB for caring for the sick or infirm might be more appropriate instead.

But I think there is a way to deal with both issues. I have tabled for the Committee an amendment to the bill that would allow for those circumstances to be taken into account. It does so by adding to clause 18, in Part 2, the statement “unless that child has an intellectual disability as defined in section 7 of the Intellectual Disability (Compulsory Care and Rehabilitation) Act 2003”. Just for the benefit of the Committee, that seemed to us to be the most appropriate definition for an individual with an intellectual disability that we could find in modern legislation. So that is the first amendment that we as a party would like to move. It is just to allow that additional flexibility for someone on a living alone payment who has some carer responsibilities.

The second set of circumstances where we think this definition is too narrow is around the use of age rather than whether or not someone is actually financially dependent. Let me explain what we mean by that. At the moment we are really concerned about only—it does not really matter whether a child is in tertiary education or at high school—whether or not the child is under the age of 18. Why is that? Surely the definition should be set around whether or not that individual in the home is financially dependent. Surely that should be what we consider when we are talking about social assistance in this way. A student who is at a tertiary institution, for the purposes of student allowances, for instance, is considered dependent until they have reached the age of 25, because their student allowance is means tested against their parents’ income. So if you are means testing against a parent, you are assuming some form of dependent relationship still exists, but for the purposes of this bill we are not adding consistency. In fact, we are making it less consistent by saying it is not the age of 25 that we are interested in if you are in tertiary education; it is 18. So it is our view that if someone is in tertiary education and for the purposes of student allowance they continue to be means tested, then that child should be considered still a dependant for the purposes of this bill as well. I am sure that my colleague, the spokesperson on tertiary education for the Labour Party, Megan Woods, would probably like to expand on that in greater detail, but that is one of our other suggested amendments for the Committee today.

We are also concerned that if you are a student who is studying, of course, there might be periods when you come back into the home for holidays when you are still a dependent child—I would never assume that child is financially independent—and that could interrupt someone’s ability to access the social assistance living alone payment, just by virtue of a child coming home for the holidays. So we have suggested another amendment that sets out that “A person is living alone if a child over 18 returns to live … at Person A’s residence and stays there less than 13 weeks in any period of 26 and is not financially independent.” So, basically, if you are a student, you come home to stay with either mum or dad in your holidays, and you are not financially independent, as in you are not in full-time work, then you should not have the effect of reducing your parents’ ability to access this social assistance living alone payment. Again, I think that is a fair amendment to make.

I would appreciate the views of the Government on those amendments. I think they are reasonable ones. We did raise them at the select committee and we did, to be fair, have a quite robust discussion about them. I accept that when it comes to the student allowance side of things there was an argument people accepted. It probably, if anything, points to the inconsistencies around the application of the student allowance regulations more than it does, potentially, for these payments.

New Zealand First has always supported legislation that allows all New Zealanders to be afforded the same degree of respect and dignity, which are the principles that reinforce our democratic values. “Democracy” is a word that is rarely spoken of or has been considered in this Chamber in recent years. If some pensioners fall short of the criterion, then our values are meaningless and exist only for those who benefit from them.

The Social Assistance (Living Alone Payments) Amendment Bill is committed to empowering senior citizens to enable them to remain independent and not have to deal with bureaucracy. Bureaucracy is a parasite that is hobbling the ability of civil servants to get things done effectively and efficiently. It is encouraging to see the Government taking the necessary action to look after those who deserve to be cared for. This bill allows for better treatment of superannuitant and veterans pensioners with respect, and not as a burden on society. Our treatment of our seniors sends a clear signal of our status as a developed nation. The intention of this bill is an improvement in pension schemes. It allows for better-practice measures for the future.

The bill highlights the importance of providing support for our senior citizens currently living alone, and allows for a more straightforward approach to their gaining State assistance. If only this approach were adopted more often by this Government, instead of it punishing the most vulnerable unnecessarily. Continuous maltreatment of orphan, superannuitant, and veterans pensioners is disgraceful. Even the Bible says there is a specific place in hell for those who oppress widows.

We all know the hassle of paper-shuffling and how this can waste time and resources and cause confusion when there has been a chink in the paper trail. For our senior citizens this can be of particular nuisance. I receive phone calls in my out-of-Parliament office frequently from disgruntled seniors not knowing how to operate the new Auckland train fare machines. I am aware of their frustrations when the simplest things in life become overbearingly difficult.

This bill is to be commended for eliminating such unnecessary processes. On account of providing a single rate for superannuitant and veterans pensions, this makes work a lot easier. It makes work a lot easier not only in regard to the eligible citizen’s ease of access but also for the financial parties who have to deal with the amount of data and paperwork that needs to be processed, day in, day out. This combined effort will fortify a single rate that is more reliable and accessible and less time-consuming.

However, New Zealand First shares concerns with other parties and with those who submitted on this bill in relation to the definition of a dependent child. The proposed new sections 4A(4)(a) and 4A(4)(b) provide for where a child over the age of 18 is enrolled in tertiary education and is financially dependent on the parent. With the exception of dependent children with disabilities, dependants who are 18 and over would provide more sensible decision-making skills given support for their drive towards higher academic achievements. Jacinda Ardern and I share the same concerns in this area.

It is a common trend nowadays. Most tertiary starters begin with university studies at the age of 18. No undergraduate degree lasts for only a year, but for an average of 3 years. This correlates to the years for which they would be considered dependent occupants. Yes, the Ministry of Social Development has commented that tertiary students are of an age where they are considered adults, and should acquire part-time work or apply for the appropriate Government assistance. However, I question whether the person who provided this advice went to university at all, or at least understands it from a tertiary student’s perspective.

If we are to encourage our children into higher education, why should we then place barriers for our senior parents to give their children this opportunity? I have children who go to university, and I can tell everyone now that if it was not for the scholarships that they earned, the pressure of putting them through university and supporting them would have been placed on me. Full-time students who are at university from Monday to Friday and have only weekends to work part-time will be under enormous stress to support themselves. This does not take into account time to catch up on study or assignments. Not all students are entitled to the subsidies of Government assistance. My children certainly were not, and I would think that this Government would not want its tertiary students on the unemployment benefit. Or is there one rule for one group and a different rule for others?

Part-time jobs are not easy to get either, with employers looking for experience. Furthermore, employers are most reluctant to train up students who can work only a certain number of hours. I am amazed at the lack of intelligence being exercised by the Minister for Social Development and her advisers in this area. Most students can hold down a part-time job only over the summer and then are left to fend for themselves. We cannot give them jobs, because we are still waiting for the 170,000 jobs promised by the Prime Minister, so why should we give them and their senior parents the added pressure?

New Zealand First is prepared to work with all members on both sides of the Chamber to preserve the social security promise that provides security for all when the need arises, especially those who are most at risk, such as widows. I would like to remind the Committee that Robert Louis Stevenson said: “Don’t judge each day by the harvest you reap but by the seeds that you plant.” New Zealand First supports the bill. Thank you.

I am happy to take a short call on this bill, the Social Assistance (Living Alone Payments) Amendment Bill. As my colleague Jacinda Ardern has very well outlined, Labour is supporting this bill because it is a sensible bill, and we are happy to support it to make sure that the issues addressed in it are no longer an issue for the elderly in our country.

I want to talk specifically to one of the amendments that Labour has put up on this bill. Jacinda Ardern foreshadowed the part that I will be speaking on, and the previous speaker, Le’aufa’amulia Asenati Lole-Taylor, has alluded to the amendment, as well. It is the amendment that harmonises this piece of legislation with the student allowance legislation—brings it into line with it. We think that it is a very sensible move to redefine the age of eligibility of students to 24 years old, as they are classed as dependants in that student allowance legislation. We think that this is needed.

Student support is an issue that we are facing as a country, and we are facing it increasingly as a country. If we do want to be an innovation-led economy that bases our prosperity, our future, and our future economic development on having an educated, skilled, and trained workforce, then how are we going to support our young people to gain these qualifications that are going to be of benefit to all of us in New Zealand?

The previous speaker alluded to some comments that the Ministry of Social Development made in regard to some of these suggestions as they came up, that perhaps tertiary students—those over the age of 18 who were engaged in tertiary education—could go and find part-time work and support themselves. Well, this is a very interesting question at the moment, because, of course, in the context of the youth rates legislation that we are also seeing going through this House, we see that the Ministry of Education provided advice to StudyLink—the bit of the Ministry of Social Development that administers student allowances—that the $11-an-hour rate, 80 percent of the full adult minimum wage, that is proposed in that legislation actually does pose some threats in terms of our students being able to support themselves. So there are a whole lot of intersecting pieces of information that we have to take into account. That is why Labour has put up this very sensible amendment, which would bring this piece of legislation in line with definitions that we have operating around that very important issue of student allowances.

We think this is something that we do need to get right. We need to iron out some absurd situations that could come about. A situation that my colleague Jacinda Ardern outlined is about a tertiary student who has gone away to polytech or gone away to university in another part of the country, and comes back over the long summer break to stay with their parents—as all parents want their students who go away for tertiary education to do. Then we have the situation of what happens in terms of the classification of dependency and how this would affect the payment. So let us just use this opportunity to make sure that this is a sensible piece of legislation and takes this into account.

We think that there are many good elements to this legislation. We think that it will improve the lives of older New Zealanders by reducing their requirement to make additional applications to receive their full entitlement. We agree with many of the technical changes that it makes possible. One that I wanted to speak to was one that I saw around the 28-day period when the spouse of an elderly person passes away and when it is they make their application, and when their eligibility for that kicks in. These are all things that we need to make as smooth and as easy as possible to reduce the amount of administrative burden that is on our elderly people while, at the same time, ensuring that they are receiving an income that they can survive on and that they can live alone on. Labour is happy to support this bill.

I thought I would rise just to address some of the comments that have been made by speakers in respect of amendments filed in respect of this bill, the Social Assistance (Living Alone Payments) Amendment Bill, and to address concerns around tertiary students and people living alone. It is important to note a comment that my colleague Jacinda Ardern made about the significance of age. Under the Social Security Act the significance of age is that from the age of 18, that is the age from which people become entitled to various types of benefits. In respect of children living with their parents who are in receipt of the living alone payment, for listeners, those young people can come back and live with their superannuitant parent for a period of 13 weeks in any 26-week period—so about 3 months—without affecting that living alone payment that their parent might be getting. Another point to make, of course, is that while a tertiary student is on a summer break and away from their tertiary studies they may not receive a student allowance but they are eligible for a hardship benefit—in other words, for getting an unemployment benefit—over the course of the holiday period if they are not in work. If that young person is disabled in some way, then, over the age of 18, they would be eligible for a benefit, which caters for caring and caters for the disability.

So it is difficult, then, to think of any situation where a person over the age of 18 would not be eligible for some sort of a benefit, and I note that the people proposing these amendments were not able to give us a situation where they would not be eligible for anything. The comment was made that a tertiary student up to the age of 25 has their parents’ income assessed, so there is an element of dependency there. Just to be picky, it is actually 24. In any event, though, that tertiary student is not disallowed from having the ability to obtain a benefit of some kind and some allowance for them because of the mere fact that they would be living with their parent or because of their parents’ income. They are still eligible for those things. So the Government will not be supporting the amendments, for those reasons. The Supplementary Order Paper that the Government is putting up, Supplementary Order Paper 191, is relating to the dates and the timeliness of the passage of this bill in respect of other work going on within the department.

I am pleased to make a short contribution in the Committee stage of the Social Assistance (Living Alone Payments) Amendment Bill. As my colleagues have already stated, we support this bill. It is a very sensible bill, and it does address a lot of some of the inconvenient processes that many of our kaumātua and kuia and superannuitants around the country have had to face in terms of having to make separate applications for living alone payments. Goodness knows how difficult that is in terms of them not only getting through their weekly budgets but also having to navigate their way through all the different processes and applications that they have to do to get a little bit of pūtea.

So we do support this bill. It ensures that the single superannuitants and veterans pensioners who are living alone do not have to make that separate application to get their full entitlement. We support it because it improves the lives of older New Zealanders and it reduces their requirement to, as I have said, make all these additional applications to receive those extra living alone payments. We do acknowledge the Government for reducing the burden of compliance on single superannuitants. It is a good measure, which improves the lives of older New Zealanders, who, indeed, as with many New Zealanders out there, are finding it very tough.

The Social Services Committee had the chance to hear submissions, and has recommended some changes. One change has been in regard to the unfortunate situation where a spouse or partner has passed on prior to the commencement of the Act but within the time frames in which applications are to be made. It is very commendable to see that spouses in that situation will not have to be impacted on, in terms of having to qualify for the payment, because of arbitrary time frames and commencement dates. It is good to see that some flexibility has been given and some fairness applied to those situations, so that the full entitlement to the living alone payment can apply from the date of the death of that spouse prior to the commencement of the Act.

I would also like to speak in support of my colleague Jacinda Ardern and her amendment in relation to Part 1. It relates to raising the age. Notwithstanding the comments from the Minister in the chair, the Associate Minister for Social Development Chester Borrows, I know that the Government will not be supporting this amendment. We do think that it is necessary to align this living alone payment with the harmonising of the student allowance regime, because there are many situations where kaumātua and kuia around the country are looking after their mokos, and when those mokos get to 18 it does not just kick in. Obviously, the Government is putting a cut-off date at 18, but there are situations—and I am thinking of those who may be disabled, or other situations around their tertiary education—where that does put an extra burden on their koro or kuia, or tāua and pāua, as we call them in the South Island. So I do encourage and recommend that we support that amendment in the name of Jacinda Ardern. It lifts the age to 25, which does capture all of those situations and makes sure that the living alone payment is available for kaumātua and kuia in that situation. That completes my contribution on this part.

I want to thank the Associate Minister for Social Development Chester Borrows for his contribution. I note, though, that he did not speak specifically to the amendment around the issue of disabled children. I would be interested in hearing his views on that particular amendment. I think the point still stands there, as I think the point still stands around the issue of those dependent children who might be in study but, for the purposes of this bill, will affect the eligibility of their parent for a living alone payment if they are over the age of 18.

Despite what the Minister has said, it seems to me that this has been an issue in the past. If you read the regulatory impact statement, there is some discussion in the statement, which, of course, was prepared by the Ministry of Social Development. It says: “For the purpose of determining eligibility for social security benefits, section 63A of the Social Security Act … sets out the circumstances in which a child aged 18 years or over is considered to be a dependent child. Our analysis has identified issues with the consistency of this definition across social security legislation.” It goes on to talk about a specific case where this has been an issue: “A recent decision by the Social Security Appeal Authority (SSAA Decision No. 38/09) has highlighted an inconsistency between the definitions of a dependent child as it applies to a child aged 18 years or over. This decision found that an adult child (ie over 18 years) who is maintained as a member of a superannuitant’s family, and is not financially independent, may be categorised as a dependent child for the purposes of eligibility for the [living alone payment].”

There has already been a case that has highlighted that this can, indeed, be an issue, and that, according to the Social Security Appeal Authority, it needs to come down on the side of the entitlement remaining, because of the fact that the adult child can still be considered a dependent child because of their circumstances. There is some further clarification, though, admittedly, and we concede this point. This will not apply to a large number of parents and their children, but it does clarify that “The Ministry is of the view that it is very unlikely many other cases will arise, as the situation applies only to superannuitants living with a student with no income other than a Student Loan (but not a Student Allowance).”

This has been our point—that there will be students who will not be eligible for a student allowance. They may access a student loan, but they may be living with someone who is eligible for a living alone payment, and because they are over the age of 18, the crude definition in the bill means that that living alone payment could be affected by that. No one is arguing that this is going to be a really prevalent situation, but what we are arguing is that it could occur and that it would be wrong if it did, and the regulatory impact statement admits that.

There is some admission in here that there is some discretion for the chief executive “to continue paying a benefit at a rate … until the pay day immediately after 31 December in the year that the child reaches the age of 18 years.”, but we should not ever allow these things to be determined by discretion when we know the issue exists and we have the ability within primary legislation to fix it. So this is something that we are asking the Minister to fix. We are at a point now where we can fix it. We have evidence that it has arisen before. Why should we have to require people to go via an appeal authority to have it addressed?

So I would like the Minister’s thoughts on that, but I equally, really, would like to hear his views on the definition of “dependent child” as it applies to a child who may have an intellectual disability, because equally we feel that that particular issue has gone unanswered.

The question was put that the amendments set out on Supplementary Order Paper 191 in the name of the Hon Paula Bennett to Part 1 be agreed to.

Amendments agreed to.

The question was put that the following amendment in the name of Jacinda Ardern to clause 5 be agreed to:

insert in new section 4A(4)(b), after “18 years old”, “unless that child has an intellectual disability as defined in section 7 of the Intellectual Disability (Compulsory Care and Rehabilitation) Act 2003”.

A party vote was called for on the question that the amendment be agreed to.

I raise a point of order, Mr Chairperson. I have spoken to the co-leader of the Māori Party, who has authorised me to vote for him, although he is in the Chamber this morning.

No. Unfortunately, the Standing Orders say that if the party is present, it has to vote.

I raise a point of order, Mr Chairperson. I did not hear, I am sorry, what that question was. Would you mind repeating what the question was?

The CHAIRPERSON (Eric Roy): It has been carried that Part 1 as amended stand part. It has now been agreed.

The reason for my confusion was that I thought there were more amendments than in fact there were votes taken.

I think I enunciated it quite clearly. It has been passed unanimously.

Part 2 Amendments to War Pensions Act 1954

The question was put that the amendments set out on Supplementary Order Paper 191 in the name of the Hon Paula Bennett to Part 2 be agreed to.

Amendments agreed to.

The question was put that the following amendment in the name of Jacinda Ardern to clause 18 be agreed to:

insert in new section 67(A)(4)(b), after “18 years old”, “unless that child has an intellectual disability as defined in section 7 of the Intellectual Disability (Compulsory Care and Rehabilitation) Act 2003”.

A party vote was called for on the question that the amendment be agreed to.