Social Security (Jobseeker Support and Accommodation Supplement) Amendment Bill

Committee of the whole House

Thank you so much, Madam Chair. I’ll seek your guidance on whether I’m actually addressing this in the right part. Anyway, just in clause 4—

CHAIRPERSON (Barbara Kuriger): As long as you’re on clause 4, you’re fine.

RICARDO MENÉNDEZ MARCH: OK, all good. Thank you. In clause 4, on “After section 20(c)insert: (ca) meets the parental income requirement” I just wanted to focus on the “parental income requirement” to begin with. Would the Minister for Social Development and Employment be able to outline what she intends to have the parental income requirements set at when the bill gets passed, and the rationale for it all. I’m interested in the amount she intends for that to be set at and why that amount has been set.

The other question I have in relationship to the parental income requirement is: why did she choose to have it as a combined parental income? For example, say that, theoretically, hypothetically, it was $70k, why would she not make it $70k individually—so $140k combined? If you set the parental income combined to just $70k, that means, for example, that somebody would not have their benefit if their parents earned $35k each. That feels like an extremely low amount to set the parental income test. I don’t know many families that would be actually able to cover both their needs and on top of that adequately support an 18-year-old on a combined income of $70k for, say, three people—maybe four people if the fourth person in that house was an underage person. I’m really keen to understand the rationale behind it and what amount she hopes that to be.

I am also keen to understand—and I may have some more questions on this depending on the answer—whether that income threshold requirement will be adjusted to reflect median-wage changes or Consumers Price Index changes, and whether that is her intention to adjust that threshold accordingly. While clause 4 may just be one sentence, I think the substance of it is really meaningful, because, at the end of the day, it’s the message that this clause sends to everyday working parents as to whether they’re in a position to adequately support their children. As we have heard from the members on the other side of the Chamber, even when the issue around cancer patients has been raised or people with ill mental health, with psychological and psychiatric conditions, the members on the opposite side have talked about how those are the responsibility of the parents, even if they’re full adults. That’s why I’m asking about the rationale for the amount and whether it’s going to be adjusted. I’ll have some more comments on clause 5 after that. Thank you.

Committee of the whole House

Thank you, Mr. Chair. The member Ricardo Menéndez March asks questions around the parental assistance test. There are two components, and for a young person they could either have one or both of the following components. The parental support gap test—we recognise that there will be some 18- and 19-year-olds who, for a variety of reasons, have a disconnected relationship with their parents. So there is a parental support gap test.

Then he was also asking specifically about the parental income test. That is looking at the combined gross parental income of the young person’s applicable parents. The income limit is currently $67,225. That’s been aligned to the gross income cut-out point for a couple with dependent children receiving the supported living payment. It’s one of the highest benefit cut-out points in the Social Security system, and that’s why that’s been chosen, to allow young people from low-income families to access relevant benefits.

In terms of the member’s question around whether it will be adjusted annually, it will be adjusted as part of the annual general adjustment.

Committee of the whole House

Mr Chair, there are quite a few questions in there, some of which we’ve covered. In terms of 18- or 19-year-olds, the forecast social outcomes modelling that’s been done over many, many years looks at the average future years someone will spend on the benefit. It is not consecutive. It might be someone moving on and off. If they go on to the benefit under the age of 20, their future average years is 21. The member referred to some factors. If people have some of those factors, it’s likely to be longer than the 21 years. A similar system is the student allowance scheme, which we’ve had in New Zealand for a very long time. That is actually under 25, where there is reliance on family for support and the family income test, so there’s nothing new about asking for parents’ income information. That’s been well deployed for decades in the student allowance system, so no dramas there in terms of asking parents for their information.

As I said before, the level has been set because we recognise that in terms of satisfying a parental income test, we wanted to ensure that households with low incomes weren’t required to provide that financial support for their 18- and 19-year-olds. The low-income families—that was determined at the most generous rate of the social security system. That’s why that level has been set.

In terms of whether or not 18- and 19-year-olds can access Ministry of Social Development (MSD) support, of course they can. There is a wide range of support that the team at MSD provide each and every day for someone who walks in the door. They might not be eligible for a benefit, but there are jobs available. There’s job matching, work-readiness resources, training information, driver-licensing support, and online learning opportunities, and there may well be the ability to enrol a young person—depending on their circumstances—in an employment programme, but also MSD has got access to a wide range of training providers.

As I’ve said at the start, this is about ensuring that young people are in employment, education, or training. We accept that for some young people, it might be challenging to find employment now, and so a better option for them right now might be training or education.

CHAIRPERSON (Teanau Tuiono): Before I take the next contribution, just note that contributions have been contextual and high level, but it would assist the committee and the Minister, I suspect, in addressing questions, if those contributions could be focused to the specific clauses. That would assist the Minister to be able to address that more specifically, and it would help us to move through the bill.

Committee of the whole House

Thank you very much, Mr Chair. I’m moving on to clause 5. First of all, this is inserting new sections after section 23 of the Social Security Act. I’m interested in—sorry, the Minister is talking. I’ll just wait so that she can—OK, cool. I’ve got the attention of the Minister—great.

Clause 5, “Jobseeker support: parental income requirement: when specified young person is subject to it”, basically, is the one where I’ll be asking some more questions on the settings around it. First of all, one debating point that the Minister for Social Development and Employment opened up was the argument around the fact that households with low incomes are being excluded, and the most generous rate in the welfare system is treated as the threshold to delineate who is a low-income household and who is not a low-income household. Can I ask the Minister, to begin with: is a family earning $68,000 not a low-income household? It seems like she chose a line, and I’m asking whether a family on $68k is not deemed to be a low-income household, because that just, personally, kind of feels a little out of touch, but I’d love to hear the Minister’s rationale for it.

I’d like to now focus my attention on my tabled amendment that was tabled at 15.20.00 today. This amends clause 5 by adding new section 23A(2)(d), at page 4, after line 35, to make it clear that, basically, we would want to make sure that somebody with a health condition, an injury, or a disability is able to get their benefit, despite these tests. The reason for this is that I’m interested to know if the Minister would support it. We know from the select committee work that there are about almost 2,700 young people between the ages of 18 and 19 who are on jobseeker—health condition, injury, or disability. By definition, these are people who would have been deemed to not be able to work full time and, therefore, they have been exempt from some of the requirements in the jobseeker system.

I just do not seem to understand why, when I look at the Social Services and Community Committee’s report and evidence—and we know that in that list we have cancer patients, people with skin disorders, congenital disorders. The vast majority of people in that list include people with psychological or psychiatric conditions, and my amendment to clause 5 would seek to exclude those very same groups because, basically, if the Minister doesn’t take my amendment, what clause 5 does, effectively, is include thousands of young people with health conditions that could be quite severe. That, to me, is really concerning because, particularly, the language around new section 23A and in clause 5 more broadly doesn’t differentiate between just jobseeker beneficiaries and jobseekers on the grounds in terms of their having a health condition, an injury, or a disability. Without sort of demarcating a line in how the bill is written to directly exclude that group, the Minister is acknowledging that those people—who may be facing quite serious health conditions—may still have to be forced, as adults, to depend on their parents’ incomes.

It takes me back to my previous question. Say that you’re one of the cancer patients included in this list and you’re in a household with a combined income of $70k: does the Minister think that that is an adequate level of support a household will provide to a cancer patient; if not, why not? If she does not think it is adequate, would she be willing to accept my amendment to clause 5 to exclude people who are on job seeker, but on the grounds of their having a health condition, an injury, or a disability, from having to be subjected to the parental income requirement, from being the sort of “specified young person” being subjected to it, as is written in clause 5?

The Minister will know that this is an area that I particularly care about, and it is one that I just feel does not adequately meet the intent of the bill, because I’ve been told that she wants people to be in study or training. But tell me that a cancer patient or somebody with ill mental health—you know, the Minister may not know whether it’s severe or moderate or not, but based on the statistics—

💬 Stuart Smith: What clause?

RICARDO MENÉNDEZ MARCH: That is clause 5, around the types of benefits. I recommend that the member on the other side reads and understands the welfare system if he wants to challenge how it is relevant.

I’m interested in getting the Minister’s support for my amendment, and I’ve got more contributions on clause 5.

Committee of the whole House

I think it’s really important just to put on the record that any 18-or 19-year-old that is permanently or severely restricted in their capacity to work would be eligible for a supported living payment. I think it is important to make that distinction between those who are on the jobseeker benefit. What is also, I think, useful to note is that a third of those who are currently on jobseeker—health condition, injury, or disability—are already working, actively seeking work, or wanting more hours. We’re clear about the focus and the intent of this bill being about the long-term and future outcomes for young New Zealanders, and the closer they remain to the labour market and/or they’re participating in training, even if for a small amount of time, we know that that does improve their future outcomes, and that’s what we’re focused on. So we won’t be supporting the member Ricardo Menéndez March’s amendment.

Committee of the whole House

Thank you, Mr Chair. I’m hoping that the Government members are taking a call because, as members of the legislature, it is our role to hold the Government accountable. Simply what we’re doing here at committee stage is holding the Minister and the Government accountable for the bills that are being put through this committee. I would challenge the Minister by saying it is not a matter of difference in opinion; it is whether what we’re looking at here addresses the issue that we’re seeing, and in good faith, whether the Minister and the Government are doing their best to benefit the people of Aotearoa New Zealand.

On that, I just want to check with the Minister. One of my questions is still outstanding, which is around whether the Minister has sought any advice on alignment with our international obligations or advice from the Ministry of Foreign Affairs and Trade. Further to that, I want to ask if the Minister has received any advice herself from Whaikaha on that particular issue. Also, I want to have clarified my question around student allowance and whether there was any consultation, not with the parental income requirement as it exists currently when it comes to student allowance.

Now, moving on to new sections 23B and 23C, my question here is: what is the Ministry of Social Development’s (MSD’s) process when we’re looking at determining whether the parental income requirement has been met or not? Now, in the regulatory impact statement, page 3, it does state that that will be cost to MSD for implementing and administering the parental assistance test (PAT). “While funding for these costs were provided through Budget 2025, there may be some additional costs due to changes to the policy since May 2025.”

Noting that in the Budget urgency this year, we had the Social Security (Modernisation) Amendment Bill, which allows for the use of AI, can I check with the Minister whether AI would be used with automated decisions? I’m seeing the shaking of the head from the Minister. I’m assuming that it is not going to be the case, and I’m going to take the Minister’s word that that means that AI will not be used in any way, shape, or form when looking at parental income requirement for jobseeker support for 18- and 19-year-olds. I just want to see that clarification.

Now, I want to move on to new section 23D(1) around definitions. I want to specifically focus on the definition for “parental income”. This is on page 7, line 31. This particular term and the term “income” is “within the meaning given to that term by Part 2 of Schedule 3”—presumably the Social Security Act. I had a look at the Social Security Act. There are two possible definitions here. One is money received and interest acquired, but it does not include interest in capital. In that case then, for, let’s say, parents of children that are 18- or 19-year-olds where the parents’ sole income is through capital gains, would that mean that then they, actually, don’t fall below the interest requirement, because they don’t technically earn any income in the definition of “income”? That’s my first question when it comes to the definition of “income”.

My second question regarding the definition of “income” is: when we were looking at one of the definitions under Part 2 of Schedule 3, “money received” and “interest acquired”, does the interest in that sense also include interest as a beneficiary of a family trust? If a parent’s sole income is as the beneficiary of a family trust or through a family business, would that be considered income under the definition of income for parental income? Those are my two additional questions for parental income.

Committee of the whole House

Thank you so much, Mr Chair. I appreciate that members want to take a call, but there’s quite a lot of pages in Part 1. Just starting off with something in the new material in new section 23D, inserted into the Social Security Act by clause 5—can the Minister outline what is the net parental income outlined on page 8, between lines 10 and 20? I know she outlined what the gross parental income is, but is she able to outline what the net income is? And I wonder if there’s any sort of, I don’t know, supplement that MPs or Ministers get that maybe is comparable to the net amount.

Then on new section 23I, but I know that maybe my colleague Dr Lawrence Xu-Nan will come to ask about some of previous sections—this is page 14. I am particularly interested in between lines 10 and 35-ish, so this is maybe line 33: “Jobseeker support: parental income requirement: relationship determinations”. Now, the Ministry of Social Development (MSD) here will now basically start capturing parents who may both be working into the kind of people who MSD has the ability to prod into the kind of relationship that they are in. Normally, MSD would, for the purposes of determining whether a beneficiary is single or receiving a single couple’s rate, be able to determine whether they’re in a relationship in the nature of marriage. That means that MSD may ask intrusive questions. Almost a decade ago, for example, MSD was subject to a Privacy Commissioner investigation into how they investigated these relationship types, which I was part of helping trigger at the time in my previous job. It’s an area that I am familiar with quite intimately, having sat in relationship investigation meetings.

My question is: how many parents will be captured under new section 23I? These are parents who MSD will be able to determine whether they’re single or not. There’s a specific definition here for whether they’re single or not, and this is around line 15, which is “(a) is living apart from that parent’s spouse or partner; and (b) is not in a de facto relationship”. I wanted to ask the Minister, as well, about what definition of “a de facto relationship” MSD will be using—for example, I know that MSD and other parts of the system use “a relationship in the nature of marriage” as the basis of determining a relationship between two individuals for the purposes of benefit eligibility. Here I’m seeing being in a de facto relationship and, also, cohabitation as a component of it. Will MSD be using the criteria that they use to determine whether someone is in a relationship in the nature of marriage when determining whether a parent is?

And can parents, when determining whether they’re single or not, be subjected to welfare fraud investigations or integrity interventions by MSD; if so, has MSD made any calculations on the level of additional resources the integrity unit may need to develop now that a bunch of additional parents who may both be in work could be subjected to prodding by MSD on whether they’re single or otherwise? And what kind of level of resources or additional staffing resources will MSD require to start now assessing working parents’ relationship status?

I raise this as a matter of seriousness, right—the Privacy Commissioner, when they investigated MSD last time, found that MSD had the power even at the time to require, for example, intimate conversations between parents, and that their information-gathering powers compared to the likes of the Police and the New Zealand Security Intelligence Service. I don’t say this lightly; it was found by the Privacy Commissioner. I am concerned that some of these parents could be subjected to really intrusive welfare fraud investigations just on the basis of their relationship status.

Again, I could see that, perhaps, as a matter of survival and for the determining of the parental income threshold, parents may—take a solo mum who has just started being in a relationship and who has an 18-year-old. She probably wouldn’t want the income of that person who she just started being in a relationship with to count towards whether her son, who may have cancer or may be facing a psychological or psychiatric condition, has his benefit cut. That is why I would like the Minister’s engagement on how this will be defined relationship-wise compared to other parts of the welfare system; resources; and how many parents this captures, according to her estimates—and I have other questions on this matter.

Committee of the whole House

Thank you, Mr Chair, but I do want to seek your clarification first. We’ve been trying, since the start of this debate, to actually ask genuine questions of the Minister, and seek the Minister’s engagement. The Minister’s responses thus far has been: “it’s the same as student allowance; it’s the same as before; nothing has changed; nothing to see here”. It’s very hard to, from a parliamentary perspective, seek engagement from the Minister so that we can have our own record on some of these, including the answer to my previous question to the Minister around the definition of income, which was simply: “nothing has changed; nothing to see here”. I’ve asked specific questions which have not had the Minister’s engagement.

In saying that, I will move on to clause 5, which inserts new clause 23G. Something is introduced here, specifically, with the parental support gap. The question I have here is: if in clause 23G(1), we’re saying that the Ministry of Social Development (MSD) is determining if “MSD is satisfied that it is not reasonable in the circumstances for A to rely on P for financial support.”, in the event of a parent gap. We’re seeing in clause 23G(2), two circumstances where MSD must be satisfied. However, in 23G(3), we’re seeing that “Subsection (2) does not limit MSD being satisfied”, which means that the two requirements under clause 23G(2) are not exhaustive.

This means that MSD can have additional considerations in determining whether there is an ability test when it comes to parental support gap. My question to the Minister is: those additional considerations, or additional reasons, that MSD would be able to consider under clause 23G(3), are they regulations? Are they guidelines? Is it secondary legislation? If they are not regulations or secondary legislation, what are the checks and balances that are involved to ensure that MSD isn’t going to be able to—in the example that my colleague Ricardo Menéndez March gave—just make up criteria on the spot? What are the checks and balances, and what is the consistency test when it comes to parental support gap, to ensure that new criteria under clause 23G(3) are being compliant with the expectations of MSD?

Committee of the whole House

I move, That debate on this question now close.

CHAIRPERSON (Greg O'Connor): I’m not going to take a closure motion, but we are in that direction. Members standing up and taking five-minute calls and covering a lot of area is probably not helpful to their cause. We’re at the stage where trying to change the policy is unlikely, so clarification is probably more likely to be fruitful at this stage.

Committee of the whole House

Point of order. Thank you, Mr Chair. I would like to seek your clarification. For example, the question I asked on new section 23G was specifically seeking elucidation from the Minister on whether something is secondary legislation or it’s a regulation and how the guidelines are going to work. The Minister has not engaged, and the Minister has consistently gone back to making it sound like we’re challenging on the basis of policy. That question was not a challenge on policy; it was seeking clarification. I just want to check with the Chair if we can continue asking those questions without the Minister’s engagement.

CHAIRPERSON (Greg O'Connor): That in itself might have been a good question, rather than—it probably didn’t need quite the padding around it that it got.

Committee of the whole House

I just wanted to bring up a question which I would have brought up in the second part, but it relates to the issue around deprivation, which is around new section 16A in the cut-out for—sorry, I’ll just give you the section number. It’s actually part of clause 12.

What I want to know is: there’s the supplementary analysis report, which talks about the threshold for an income supplement, which is the second part of this legislation, which we’ll get to shortly. There’s a paragraph there with regard to families with children. It says that families with children are disproportionately impacted by this proposal—that being the issue about accommodation support—but it says, at paragraph 61, “There is a risk that this proposal combined with other budget initiatives (such as the changes to Jobseeker Support - tightening eligibility for 18- and 19-year-olds) could increase the likelihood of financial stress for families supporting their adult children.”

I’ve never really had an answer to my very early question about why we haven’t looked at the number of children in a family or the actual financial pressures instead of taking—I’ve got no answers whatsoever on that. What I want to know is: what do you make of that? You’re doing two things at once impacting on the same families, and there’s a warning here that it’s going to impact on them, and yet we’ve got paragraphs here which are all about, as you say, cutting away any other form of support to those families, such as emergency benefits, etc. Could you answer that question, very genuinely—

CHAIRPERSON (Greg O'Connor): Not me.

Sorry. Could the Minister for Social Development and Employment answer that question, very genuinely, and I’ll leave her alone on this one?

Committee of the whole House

As I said, we have set an income level. I’ve explained that multiple times—why that’s been set. At the heart of this is, actually, that we want young people in training, education, or employment, right? We don’t want them to go on to welfare and get stuck there, because we know what happens in terms of their long-term life outcomes.

I accept that other people in the House don’t agree with the policy position. I’ve explained why we set the income level at the level we have. The best way to avoid this is for parents to support their young people in their expectation to have them in education, training, or a job.

Committee of the whole House

Thank you, and I’d love to chat with any member here on, like, why this welfare policy particularly matters. When the Minister for Social Development and Employment talked about how she expects the ministry to just execute her policies, does she accept—and I speak about, for example, new sections 310ZL, 310ZN, and other provisions under clause 8, including, for example, 310ZQ, and I’ll focus a little bit on that one specifically. There’s one side of saying, “I expect the Ministry of Social Development to do what I say.” Then there’s the other one that is like, does the Ministry of Social Development (MSD) actually have the resources and is it actually equipped to do what she says? Just whipping MSD harder does not make these clauses just magically come into effect. All I’m asking, despite our disagreements on policy, is: has she sought reassurances from MSD that these provisions could actually take place? It adds additional reviews by a benefit review committee, appeals to appeal authority, and appeals to court.

Now, would she be able to outline for people—again, not a policy disagreement—has she actually checked whether adding additional things that could be reviewed would be workable in practice, considering the substantive delays that people already experience in reviews by benefit review committees or appeal authorities? And will she promise, if there are substantial challenges to this policy via the appeal processes through the courts, that she will not legislate at pace to prevent these resources from being accessed in the way that, for example, she did to clamp down on people having their debts wiped by the Ministry of Social Development (MSD) after accessing supplementary assistance while they were waiting in ACC payments? Because, for new section 310ZQ inserted by clause 8 to actually be useful to everyday people, people have to have confidence that the appeal processes will be left alone and will be adequately resourced.

For the Chair’s elucidation, normally, review committees are made up of two MSD individuals and one supposedly independent community person, which I would challenge, but it maybe would be useful for the Minister to tell me if she expects to increase that number of MSD staffers that can participate in the benefit review committee if she’s adding another decision that can be challenged, because, first of all, some of the families that I worked with have waited months to have their meeting and their appointment with the benefits review committee to challenge a decision. In this case, what I am concerned about is that if they’re waiting for months to challenge a decision, it’s months that an 18- or 19-year-old would have gone without income support, right? So it’s not just that this is sort of a frivolity of trying to grab some random clause; we’re talking about the fact that she’s added an appeal clause without elucidating to us how long an 18- or 19-year-old would be expected to wait without income while this happens, or even giving us assurances that she actually checked with MSD if they are at capacity to operationalise this at pace, rather than just saying, “I expect them to do it no matter what.”

I think, to the earlier comments, all we’re trying to do is just seek elucidation from the Minister. I’m not even trying to convince her to get rid of any of these clauses at this point. All I’m trying to do is to debate and seek confidence that the Minister actually understands what she’s doing, especially when we had, this week, incidents in which, clearly, the Minister was found to be inconsistent saying no to questions about benefits being suspended when it turns out they were.