Child Support (Pass On) Acts Amendment Bill

Members, we come first to the Child Support (Pass On) Acts Amendment Bill, and we begin the debate on Part 1. This is the debate on clauses 3 to 28, and Part 1 of the Schedule, “Amendments to child support legislation”.

Point of order. I seek leave for all provisions to be taken as one question.

Leave is sought for that purpose. Is there any objection? There is none. The question is that Parts 1 and 2, the Schedule, and clauses 1 and 2 stand part.

Thank you, Madam Chair. I expect that members will have a lot to discuss in the committee of the whole House stage for this piece of legislation. I did indicate in the second reading, which was only yesterday, that National supports it, but with some significant reservations, so my expectation is that, as a result of the committee stage, those reservations will go one way or the other.

My first question to the Minister in the chair is: what is the primary objective of this legislation? Is it around child poverty reduction, and why is it that the figures for the number of children who would be lifted out of poverty by this bill have changed from the regulatory impact statement until now?

Madam Chair, it would be really helpful to get some answers, so—

Order! Order! It is up to the Minister as to when the Minister addresses the questions. In order to keep the debate going, members should seek a call.

Thank you, Madam Chair. For those who have just tuned in to the committee of the whole House, this is a recommendation that was agreed by the Government in the report of the Welfare Expert Advisory Group, which reported back in May 2019. So I’m going to give a bit of a time line to help the Minister in the chair answer some of the questions. May 2019 was the Welfare Expert Advisory Group report back, and in March 2022, the regulatory impact statement (RIS) was drafted. So what generally happens is that a piece of legislation goes to a Cabinet committee, and the Government of that day decides. So it’s somewhat puzzling that it has been 12 months later, on 26 March, before a bill then landed in this Parliament—oh, and then it became urgent. Then it became urgent, because the Government wanted to be able to say it had done something by 1 July, which is—guess what!—a mere few months before an election. Fancy that!

Unfortunately, as is common with the Minister in charge of this bill, we had another rushed process. That’s why it is really important in the committee of the whole House to have a high level of scrutiny, because the public didn’t have the opportunity to scrutinise it fully in the select committee.

So, as I say, my first question is around the pure essence of this legislation. Is it about increasing welfare payments—in this case—to sole parents, or is it about lifting children out of poverty? If it is the latter, I’d like to know why the numbers affected, in terms of the numbers being lifted out of poverty according to the RIS would change, and what the evidence is for the change.

I thank the member for her questions. As I see in the legislative statement for the bill at the second reading of this bill, the major purpose of this bill is to correct an unfairness between sole parents on benefit and other families on benefit. So that is the purpose of the bill. The fact that children are lifted out of poverty is of course a good thing, but the major purpose of the bill is, in fact, to correct that anomaly between the way that sole parents were treated and the way that coupled parents were treated.

Following on from that, because it’s evident from the regulatory impact statement—or at least in some of it, because there are still heavy redactions in the regulatory impact statement. So there is still a lot that’s not open and transparent to the public or to this House.

But in terms of the options that were considered, given the Minister’s comment about it being to change the status of the sole parent benefit to match others, I’m interested to know, given that one of the drivers of the welfare system—and I’m not quoting directly, but perhaps I should. Let me quote directly: “the general purpose of … welfare assistance … [is] to use all available resources before seeking financial assistance [through the Ministry of Social Development].”, whether or not in considering the options available for this bill that liable parents—who tend to be fathers—are responsible for their children, irrespective of whether the receiving parent is receiving welfare or not. So the fundamental principle here is that families are responsible for their children, and in the child support legislation, the liable parent is responsible for their children, and they pay the receiving parent accordingly.

The question of principle that I’m interested in the Minister responding to is whether or not that then means that there should be a differential with the sole parent benefit, because it is about the liable parent financially supporting and providing for their children, irrespective of the receiving parent’s economic status—i.e., whether they’re on a benefit or not, and whether that should be agnostic in terms of the pass on of support. If you are then saying that the liable parent is liable, then those funds—it’s entirely appropriate that it offsets the costs associated with the sole parent benefit. So I’m interested in the Minister’s explanation for this legislation as to why that differential shouldn’t have been maintained.

Thank you, Madam Chair. Whilst the Minister’s contemplating her responses to the questions posed by my colleague Louise Upston, I turn to clause 5 of the bill, replacing section 9, which is headed “UCB”—which is “unsupported child benefit”—“beneficiaries must apply for formula assessment”.

So, Minister and officials, advisers, my question is focused not so much on, as the Minister answered, unfairness to the sole parent recipients, but, actually, the unfairness to the child or the children who will be the direct beneficiaries of payments from a liable parent. Minister, submissions have been made by members of the public such as the Child Poverty Action Group, Community Law Centres of Aotearoa, and Salvation Army Te Ope Whakaora identifying that this bill is, effectively, addressing the rights of sole parent beneficiaries by way of the process of pass on of payment from a liable parent rerouted from IRD directly to the sole parent.

New section 9, inserted by clause 5 in the bill, identifies and sets apart that a child who is in the care of not their sole parent, for which a liable parent is responsible for direct payment towards the upkeep of that child—New Zealand has a number of children who are not in the care of one or other parent. That is, effectively, either a grandparent, a foster parent, or a family member not deemed as a sole parent beneficiary but as an unsupported child benefit beneficiary. Minister, can the answer be provided, please, why there is a discrimination directly as a result of clause 5 of the bill, which identifies that a child who is in the care of not a sole parent but another caregiver—why the UCB beneficiary is not entitled to the liable parent pass-on payment for the direct benefit of the child?

So the focus of my question is not about fairness to sole parent recipients, but, actually, it’s about fairness to all children, be they either in the care of the sole parent or a non-parent who is a caregiver under the unsupported child benefit beneficiary.

I’ll answer the member who just spoke, Harete Hipango, first, as to why children on the unsupported child’s benefit weren’t taken into this bill. It’s a straightforward reason: it is because it is being considered by Oranga Tamariki as part of the long-term work to reform the system of financial assistance and support for caregivers. So that issue is being addressed in that particular review, where it’s the appropriate place for it to be addressed, I believe.

In response to the Hon Louise Upston, who is concerned about the differential between sole parents and other parents—I think the real concern was about parents being liable for their children and using their resources to support their children before calling on the resources of the State. One of the things, in terms of a behavioural response to the child support practices in place at the moment, is that we know that it discourages—it discourages—liable parents from actually paying child support. We know that there has been a great deal of information to suggest that if child support paid by a liable parent flows through to the caregiving parent, then the liable parent is much more likely to pay. So, indeed, it does encourage liable parents to take up their responsibilities.

Thank you, Madam Chair. I recognise my colleague will have a number of questions. So I want to start from that very point that the Minister has answered around liable parents, because what is not evident in any of the documentation that would be very interesting, given the cost of this policy being $354 million, and there are lots of ways that you could alleviate child poverty with $354 million, is: how many additional liable parents will child support be recovered from as a result of this policy? How much more child support, in terms of quantifiable amount is expected to be received on behalf of receiving parents, and what evidence do you have for that? That’s my first set of questions around liable parents and the theory of the incentive. I’m interested in the evidence of that.

I want to pick up on the comments that my colleague Harete Hipango raised about the unsupported child benefit—or the UCB—which is in a number of parts of this legislation, that one was a really significant issue raised by submitters in the very short period of time they had to consider this—and I understand the work that Oranga Tamariki is doing, but why is it not that, as a stage one, they could have been provided assistance? Most people would agree the most vulnerable children in New Zealand are those who are not in the care of their direct family, and those who receive an unsupported child benefit fit that category. Therefore, why wasn’t the extension, even if it was as a transitionary method, until the final work—goodness knows how long that might be that Oranga Tamariki is doing that review—couldn’t have been paid even in the short term? And what number of children would have been lifted out of poverty had that extension to the beneficiaries of the unsupported child benefit been extended the generosity of the State through this policy?

Following on from my colleague Louise Upston’s question around the unsupported child benefit, it’s a cop-out and it’s an easy answer to say that there’s work being done by Oranga Tamariki addressing this issue. Again, advocating the child’s interest—and this must be about, because it’s called the Child Support—not the “sole parent beneficiary support”—(Pass On) Acts Amendment Bill. So when is this piece of work from Oranga Tamariki going to address the recipients of the unsupported child benefit for our children? When is that? What is the time frame? Repeatedly, I’ve stood in this Chamber and I have advocated from a child-centric point of view, which this Government consistently—which is something that they are consistent about—dismisses the relevance, the significance, and the importance of our children in this legislation. When is this piece of work by Oranga Tamariki going to be completed to address this very issue of concern about not only our most vulnerable children who are in the custodial care of a non-parent—and, often, they are our kaumātua; our nannies; our koros; our aunties; our uncles; and, sometimes, older siblings; if not, foster parents—but for the benefit of the children of Aotearoa New Zealand?

In response to the Hon Louise Upston, who asked about the evidence that liable parents were more likely to pay out, there is, of course, no evidence from New Zealand yet because the change hasn’t been put in place. However, there is evidence from overseas research showing that that tends to be the case. I refer the Hon Louise Upston to Cancian, M; Meyer D R; and Caspar E, 2008, Welfare and Child Support: Complements, Not Substitutes in the Journal of Policy Analysis and Management, 27(2), pages 354 to 375, which will give her that evidence that she asked for.

In terms of what we might have available for New Zealand in evidence, there is provision in the funding for this to review the proposal over the next two years, to see what actually does happen, and to get the evidence from New Zealand as to what happens with respect to liable parents—what we hope will be the increase in liable parents paying child support.

Both the Hon Louise Upston and Harete Hipango, again, focused on the unsupported child benefit and why that wasn’t included in the child support pass-on. There is work being done, as I said before, in Oranga Tamariki on what to do with respect to unsupported children. I understand the request came from Oranga Tamariki not to include the unsupported child benefit in this particular piece of work, but to wait until that review was done. Of course, I can’t explain when Oranga Tamariki will do that work, because I do not have responsibility for Oranga Tamariki.

Thank you, Madam Chair. So in the second reading, I alluded to the issue of the child support pass-on being treated as income for the purposes of benefit entitlements and eligibility for the income-related rent subsidy. Hopefully she can hear me better. And one of the things I was interested in, in terms of the bill’s potential for child poverty reduction, was—it’s my understanding that there was no analysis being done around the sort of distributional impacts—well, mostly child reduction impacts—there would have been if the child support pass-on hadn’t been treated as income for the purposes of benefit eligibility.

And, I guess, I want to get the Minister’s reflection about whether this could have been a missed opportunity in terms of—because I’ve heard the arguments, right? But if we didn’t treat it as income, you could then have people, in theory, double-dipping into a benefit and receiving child support none the less. But, I guess, the trade-off is that the gains for those families on a benefit would have been considerably higher, and, therefore, the number of children that we could have lifted out of poverty would have also been significantly higher. And, ultimately, because the child support payment is supposed to go to the child, and the benefit, in and of itself, is just supposed to go to the household, I’m curious to get some analysis as to whether the Minister, at any point, had considered exploring something different.

And in terms of the income-related rent subsidy eligibility, while I understand that there will be very few people who fully lose it, I guess I’m just interested in her reflections on how that will impact housing affordability.

Lastly, when it comes to the impact this will have in terms of people’s placement in the public housing waiting list, I was curious to also get a sense of how this may impact, in the long term, people’s placement in the public housing waiting list in terms of those people who would have otherwise been high priority. We don’t expect many, if any, people—basically, we expect an insignificant amount of people dropping from the public housing waiting list. But inevitably, in terms of their priority numbers, there will be some people who will be affected, and so I wanted to get the Minister’s reflections around whether any work could go on to ensure that people who hadn’t been considered adequately housed are now considered to be adequately housed.

I thank the member for his questions. I’ll answer them as best I can. In terms of why child support that is passed on to the receiving parent will be treated as income for benefit purposes, it’s important to remember that it doesn’t mean that people won’t get the benefit; it just means that the income that is taken into account for when the benefit starts to abate will include the child support received. What it does is it places people who receive child support payments in the same sort of place as people who perhaps earn some extra income through wages and the like. It treats it in the same way. But, of course, there is actually just straightforwardly a parity issue within the law there anyway. For other beneficiaries who received child support payments already and have received them in full, because they’re perhaps partnered or something like that, already those payments are taken into account as income for calculating eligibility for benefit or how much they might receive in terms of benefit. So couple of reasons there. One is it ends up treating sole parents in the same way as partnered parents are treated for the purposes of child support pass-on. So that’s a straightforward parity reason there. And the other one is just that that does count as income, and it also treats that income in a similar way to wage income that sole parents might receive.

In terms of what impact it might have on accommodation assistance and housing allowances and the like, of course, the major constraint on when people can access public housing is simply the number of public houses available. So, rather than the particular income they might have, if they are on the list, they are on the list, and their eligibility criteria are taken into account as best possible. That includes how much income they receive and, of course, typically a whole variety of other circumstances. So I don’t think this particular measure, in and of itself, would have had a dramatic effect on that.

Thank you, Madam Chair. I just was looking and thinking about some of the submissions that were made and some of the comments that were made within the select committee process. It was around debts caused by disruption to the automatic electronic system, the sharing system that we’re going to be using to identify what income is coming in and going out. There’s a clause in there that states that debts caused by the errors would not be recoverable, so we wouldn’t be putting sole parents into debt through mistakes that were made through this new sharing system.

But there’s a section within the bill in new section 115A, inserted by clause 64A, about duties to advise around change of circumstances in relation to payments. There was a concern that people will feel, because it’s automated and because they think that everything’s being done automatically, that they may not have to advise on change of circumstance. There are examples on here where the person would have to advise the Ministry of Social Development on a change of circumstance, and it was brought up that this may be confusing to a person that is receiving this child support in this way. If they fail to report on change of circumstances, will they then be liable for any overpayments if they don’t meet that obligation of reporting a change of circumstance?

Thank you, Madam Chair. And I thank the Minister in the chair for her answer about the provision of international evidence about liable parents paying. I’m interested to know, though, what estimates have been made in terms of the options put forward—what the estimate is, both in terms of the number of liable parents who will now pay child support as due, and, second, the child support that would be collected to offset this. And I’m sure that analysis has been done and the formulation of the options considered and then the decision. So that’s my first line of questioning.

I want to go back, because I don’t believe the Minister answered my question around the change of figures in the regulatory impact statement from March 2022 to March 2023 on the number of children that will be lifted out of poverty. And I think I would have unanimous support in the House that every party in this House wants to see fewer children living in poverty, so the detail behind the change of the numbers is important. So the original estimate was that 7,000 children on the fixed line AHC50 measure would be lifted out of poverty. That’s increased to 10,000, so quite significant. It would be really interesting to know the detail of what’s behind that change.

And then, also, in terms of the before-housing measure, it was 5,000, and with the revised figures in the regulatory impact statement, it is 6,000. And I’m interested to know of the other scenarios that were considered, what the number of children on both of those measures that would have been lifted out of poverty were in determining option 2 that became option 6 that’s now in the bill we’re debating before Parliament tonight.

It may take me a while to just get my head around that last question, I’m sorry. But if I can address the question raised by Karen Chhour, who was concerned about debts caused by disruption or, basically, errors. Obviously, if there’s an error caused by the Ministry of Social Development or by the system doing something wonky, then, no, there is no liability to pay—that’s just a matter of fairness. But, then, recipients are required to advise a change of circumstance. And Ms Chhour asked, if they failed to advise a change of circumstance, would they then be liable for overpayments? Yes, there is an obligation to advise a change of circumstance. Yes, that can be confusing if you think that the system is doing it all for yourself. Nevertheless, that obligation still exists, and that exists right across our systems. So would they then be liable for overpayments if they had failed to advise a change of circumstances? The answer is, yes, they would still be liable for that.

The Hon Louise Upton asked about why there was the change in the number of children living in poverty that would be lifted out of poverty by this measure. And I do want to point out, again, that the major purpose of the bill was to correct the disparity between sole parents and partner parents in terms of how child support was treated. Nevertheless, it does also have the effect of lifting more children out of poverty. The reason for the change between the numbers in March 2022 to March 2023 was, pretty straightforwardly, that we have some different economic data over the course of that year. So that means that some of the data behind the modelling changed over that time and that was why we got those different numbers. I’m sorry, I wouldn’t be able to go into the detail of that modelling as I’m not an economist myself, but that is the reason—I’ve been assured—as to why it happened that way. And I’m sorry, Ms Upston, that I think I lost the detail of the second part of your question there, if you would care to repeat it. Thank you.

Thank you. Talking first about the child poverty numbers, the Minister has clarified that that wasn’t the primary objective of the legislation. I actually find that somewhat disappointing, because, actually, I think that would have been a more noble objective in this instance. As I said, the National Party still has reservations about this bill, and that’s why I want to interrogate some of it. So, with those updated Treasury figures that have been built into the numbers that mean the regulatory impact statement from this year has changed from last year, does that also reflect the increase in the number of sole parents on benefit from 12 months ago? And a related part of that question is: is it seen, as a result of this policy, that there may be an increase in sole parents, and, if yes, by how many?

Thank you, Madam Chair. I acknowledge the Minister for the attempted answers to complex legislation, however I am going to labour the point with this Labour Government and seek some direct answers, please.

Back to the UCB—the unsupported child’s benefit. I’ve been advised that Oranga Tamariki is doing a review around caregiver payments, but, again, the concern is: when is that going to be completed? How long is a piece of string? How long do our children have to wait before they become the direct recipient beneficiaries of these child pass-on legislation payments? That’s my first question.

The second limb is, Minister, the lack of external consultation. It’s been noted that the Welfare Expert Advisory Group commissioned by the Minister for Social Development and Employment—so that Welfare Expert Advisory Group consulted with 3,000 New Zealanders for its 2018 review of the welfare system. It’s noted that its consultation included benefit recipients, advocates, and Ministry of Social Development (MSD) staff. So the Welfare Expert Advisory Group recommended that child support payments from the liable parent should be passed on to the receiving carer, not just the sole parent beneficiary—a receiving carer is also an unsupported child beneficiary.

So, Minister, IRD and MSD—it’s been noted that the Minister engaged this Welfare Expert Advisory Group. The recommendations from that have been, again, kicked into touch by this Labour Government. Why is that? Why are our children not benefiting from this Government with some direct answers that are going to be accountable to our very children who need it the most, and the caregivers who are looking after them, under this Child Support (Pass On) Acts Amendment Bill?

With apologies to the members in the Chamber, there is a film crew up in the gallery. I’m advised that no permission has been sought or given for them to film, so I’d ask them to clear the gallery.

Thank you, Madam Chair. So the next question, again—although I understand it’s not the primary objective—I am interested, in terms of the child support pass on, the demographics or data on two levels. One is of the liable parent, where the pass on occurs—and I’m making assumptions about them being higher-income earners for the level of pass on to go through. So that’s one end of the question—the collection of child support from the liable parents, and data around who the liable parents are. But, more importantly, and more importantly in terms of child poverty reduction, the children in the families with sole parents who will receive the pass on—what is the percentage of Māori and Pasifika children who will benefit as a result of the sole parent child support pass on?

I too am a little bit concerned about the unsupported child benefit being left outside of this bill, but my question is, really: was any consideration taken by officials or the Minister to include the UCB—or the unsupported child’s benefit—within this piece of legislation so that these families did not miss out on the support as a temporary measure between now and when this other bill that we’re thinking is being worked on in the future comes into place? Because, after all, isn’t this bill about looking after all children and making sure that no child is living in poverty, and helping every child to have the best quality of life possible. And was any consideration at all taken to adding the UCB into this bill temporarily until the alternative came around?

With respect to the unsupported child benefit, the answer—I realise that members may not find it satisfactory, but it’s the one I’ve given several times already—is that Oranga Tamariki are working on what to do with respect to unsupported children. There’s a major review going on there. Oranga Tamariki asked for this particular measure not to be included in this bill. That is the reason, and I can keep on repeating that a number of times, but that is the reason.

I also want to just talk about, in terms of the demographics—questions which were raised by the Hon Louise Upston. In terms of the demographics of the liable parents and the like, I don’t have those to hand. The objective of this bill is to correct the disparity between the treatment of sole parents and the treatment of parents in partnerships, with respect to child support and whether or not they get that child support passed on from the liable parent. So that is the major—the primary—purpose of this bill. It is to correct that disparity. Of course, data around liable parents is likely to be available on request. It is the sort of data that might well be available through IRD and the likes. So it is available, but it is not the major reason for this particular bill. I may be able to find the data for Māori parents for her—or I’ll see if I can do—on that.

In terms of whether or not there would be an increase in sole parents as a result of this legislation—I think that was the question the member asked, but I think the question she meant to ask was whether there would be an increase in sole parents claiming benefit as a result of this legislation—there is not expected to be. I’ve been advised that there is not expected to be an increase in the parents claiming benefit; that parents don’t claim benefit because then they would get the child support pass-on, I’ve been told. However, that is exactly the sort of information we will get out of the review that has been built into this so that, within a couple of years, we should have some evidence around that, which would answer that particular question.

And I’ll try to find out whether or not the increase in the children lifted out of poverty is because there was an increase in the number of sole parents on benefit.

Kia ora. A couple of questions. What specific programmes is the Government implementing to reduce the number of individuals receiving sole parent support, and what is the annual success rate in numbers of those individuals over the 2022 year and 2023 year to date? Final pātai is: will the Government asset test the intended recipient parents of the support, and, if not, why not?

Thank you, Madam Chair. Of course, I’m not sure that the Government has in place any specific programmes to decrease the number of sole parents on benefit, except perhaps we’re ensuring we have free contraception available when people need it. That’s not, you know, part of this legislation. The object of this legislation is to ensure that sole parents are treated fairly in comparison to parents who are coupled.

I have now a couple of answers for some of the questions that the Hon Louise Upston and Harete Hipango raised. So in terms of the increase of the number of children that we expect to be lifted out of poverty by this legislation, the change will be March 2022 and then March 2023. And the Hon Louise Upston asked was that incorrect because the number of sole parents increased; well, the number of sole parents increased by 1,200. That would not be sufficient to—unless they’ve all had several children—generate the increase in the children lifted out of poverty that’s estimated in this bill between March 2022 and March 2023. So it really is due to the underlying economic conditions that has changed those numbers around.

We expect, in terms of the demographics of some of the families who will be affected by this—the numbers are being given that we expect that about 41,000 families will be positively affected by this change in the legislation. So that’s about 41,000 families who will get the child support paid directly through to them instead of it being tapped by the State in-between. And so they’ll be better off because of that. We think there will be about 20,000 Māori families who will be better off as a result of this legislation, and about 3,700 Pasifika families who will be better off as a result of this legislation.

Thank you, Minister, for providing the statistics and the information. Again, I’m drilling down on the point that has been made by the Government: that this bill is actually about entitlements for the sole parent. I’m focused on the actual rights and interests of the child. So the caregivers—under an unsupported child’s benefit (UCB), who’s looking after these children? They’re vulnerable children who aren’t being looked after by a sole parent or the liable parent. How many UCB beneficiaries, and the number of children that are in their care, are going to be detrimentally affected by the non-inclusion within this bill?

Thank you, Madam Chair. So we’re aware of the 41,000 sole parent benefit recipients that will benefit from this policy an average of $20 a week. And as someone who’s been a recipient of the sole parent benefit, $20 a week makes an enormous difference. So my question is really looking at the targeting of that additional support. Was there another way that could have better targeted the financial support to reach those with higher needs, and, if so, what were they and why were they discounted? So that’s one question.

And then I want to come back to—because, I think, philosophically we’ve still got this sticking point between our side of the House and the other side of the House around whether or not a status, in terms of when somebody is on a benefit for the reason that they are a sole parent, is the simple justification as to why the child support should be captured as an offset against the cost of the sole parent benefit, and I think that’s still our philosophical sticking point. And I know there were other options considered, and it appears from the regulatory impact statement that it became about the time pressures involved in implementing something because it had to be done by 1 July so the Government could say to the 41,000 voters, “You’ve got some more money available.” What were the other options, had time not been an issue, that would have been a preference if it was about delivering greater support? And was the issue of the comment I made earlier—because I’m not sure that that’s been addressed—that the first port of call for welfare assistance is to use all available resources, and, in this case, all available resources is the child support that is actually being collected by the liable parent.

In terms of looking at other ways of supporting children in sole parent families, of course, our Government always considers this. However, that’s not the objective of this bill; the objective was to correct the anomaly between sole parent families and partnered-parent families, where the payments made by liable parents to sole parent families were not passed on to the sole parent family until the amount of benefit was recovered, whereas the payments that were made by liable parents to parents and partnered-parent families on benefit were passed straight on through to the receiving family. So it was correcting that anomaly, which was the purpose of this bill.

In terms of why this particular measure is being pushed through—though it has been in development for quite some time—there are about 41,000 families. It’s a fairly straightforward way of doing it. The calculations are fairly straightforward. There are some complexities for a number of families—although conceptually it’s easy to talk about how the child support payment would be passed on, in actual fact the legislation is very complex, so they are being worked through and we expect to have a solution for those families within the next couple of years—actually, at about the same time as will end up having some more evidence to be able to assess what’s going on and whether or not this is an effective measure, in particular with respect to encouraging more liable parents actually to make the payments that they’re supposed to make.

Thank you, Madam Chair. I think, on the philosophical difference, we’re probably not going to get that bridge covered, so I want to focus on a different area, and that is the area of the temporary additional support. Again, if you think about the social contract that taxpayers and recipients of welfare have, there is a general agreement that where you can provide for yourself and your family, you do, and, where you have responsibilities and where you have children, you fulfil your responsibilities and obligations.

So I’m interested—if the Minister could answer the questions around why there is a change in this bill to then say for the liable parent who is on a benefit themselves, the expectation that the temporary additional support goes up, which is, of course, paid by taxpayers, to pay for their children.

💬 Hon Dr Deborah Russell: Ahh—thank you.

CHAIRPERSON (Hon Jacqui Dean): The Hon Dr Deborah Russell.

Sorry, I was standing up here, saying “ahh”—ha, ha! Thank you, Madam Chair. When this whole child support pass through was being developed, we worked out that there was a gap in the temporary additional support settings, and the bill was an appropriate vehicle in which to correct that gap. The idea of temporary additional support is that so someone literally has enough to live on, that they can actually buy some food, pay their rent, and have a place to live. There are cases where the obligation to pay child support out of their benefit would have left the person with—I never like using the term “negative income”—simply, literally, not enough money to pay for the necessities of life. The temporary additional support allows them to do that, just to ensure that they are not left to starve in the streets because they’re paying child support out of their benefit. It’s a simple pragmatic matter.

The member Louise Upston referenced the philosophical difference, if you like, a couple of times between one side of the House and the other, and the thought that, of course, parents ought to support their children; indeed. The fact is that some parents don’t have the resources to; some parents, through all sorts of circumstances, end up on benefit—and, in this case, on this side of the House, we feel that the State ought to step in and provide support to enable them to get back going again. I can’t resolve that difference between us, I’m sorry.

So just exploring that further, in terms of the liable parent, they pay child support to pay to support their children, and that’s where this $350 million bill—to now assume the responsibility of that and not offset—creates a dilemma. So I still want to put that on record. My colleagues on this side of the Chamber wouldn’t forgive me for not putting that figure on the record, because it is really important. Every Government has choices, and if the choice is to support the children in those households of sole parents, there are a number of ways to do that. And that’s why I labour the point, and I’m kind of disappointed, actually, that the main objective of this bill isn’t about lifting children out of poverty.

So, then, the second part of it is—and I appreciate your attempt at the answer around the temporary additional support, and I’m grateful for this, the numbers that you’ve provided in answers to other questions—how many recipients are expected to get temporary additional support? So I’m interested in the number of beneficiaries, and I’m interested, on average, what that amount of temporary additional support is, because that is another cost to the taxpayer. And every dollar spent of taxpayer money in this inflationary environment has an impact on interest rates and the costs of New Zealanders—hard-working New Zealanders—all over the country. So we must treat the $350 million with respect and dignity in scrutinising the costs.

And I appreciate that the interaction between Inland Revenue and the Ministry of Social Development and benefit payments is complex. I know that some of the submitters raised—as the colleague from the Green Party raised—concern about flow-on impacts to assistance that those on sole parent benefit may be receiving that will be impacted by the child support pass-on. And I am interested to know in the numbers of those that will have reductions in other areas of support.

The other piece that I’m interested in, because the Minister in the chair, the Hon Dr Deborah Russell, has referred to it a couple of times—and I do want to acknowledge the Government for doing this, for funding an evaluation. I’d like to see every piece of legislation with funding for post-implementation evaluation to be included. So if the Minister could provide detail about when that evaluation will occur and exactly what the measures of success of this policy would be measured on.

In terms of the number of people receiving temporary additional support, there’s about 81,000 people who receive temporary additional support at the moment. Of those 81,000 people, we think there’s about 6,450 liable parents who will benefit from their child support being an allowable cost. We think it will benefit them to the average of about $21 a week, so that’s the amount there. Obviously, that’s not the whole $345 million; it’s just a small portion of it.

In terms of the evaluation of this piece of legislation, we’ve been allowed—I think 450,000 has been allowed to evaluate it in the two years following implementation. Inland Revenue will undertake a process evaluation to measure the effectiveness of the initiative, and they will be monitoring some of those key metrics like changes to the number of child support applications, the amount of child support received, and also the amount of child support arrears. We know that liable parents often end up in arrears, and, of course, often they’re not very incentivised to pay because they think the money isn’t going to their kids. So this should help to change that figure.

Thank you, Madam Chair. I want to come back to a line of questioning that my colleague Tama Potaka raised, and that is looking at—and I’m hoping it will be included in part of the evaluation—the number of those receiving the sole parent benefit and whether or not the additional funding that will go into that household will mean greater access for sole parent benefit recipients—the majority, by far and away, are women—and whether we see, as a result of additional financial support into the household, that there will be greater numbers of sole parent benefit recipients commencing work part-time or training, and, if so, what those numbers are.

Thank you, the Hon Louise Upston and Tama Potaka, for that question, which I didn’t answer before—sorry, I lost track of that one. Will there be more sole parents, as a result of the additional support, going into training or into paid employment? Of course, if sole parents go into paid employment, it depends how much there is, how much they take on, because, of course, if they go into sufficient, they go off benefit anyway, so the pass-through question becomes irrelevant.

In terms of people going into training, I suspect that the Training Incentive Allowance will have a much better impact on whether or not people can access training. It is worth remembering that there is extra money going into sole parent households because of this. On average, we think it’s about $47 a week, but the median is only $20.

💬 Hon Louise Upston: Yeah, 20.

20. The median is only $20 a week. We know it helps. We know how many loaves of bread that buys and things like how many pints of milk. Although it will all help, I don’t think it’s going to make a sufficient difference—or it may do, but, you know, that’s possibly not enough to make that difference. Which brings us back, really, to the point that this was to correct the anomaly, and that being the overall objective of this. We do think it will help lift some children out of poverty, but, actually, the real objective of this legislation is to correct the anomaly between sole parent—receiving carers and coupled or partnered—receiving carers.

Thank you, Minister, for clarifying those aspects of anomaly. Again, a question was asked in the Chamber earlier this evening—still awaiting the answer—which is: how many children in the care of unsupported child beneficiaries are there that are not the direct recipients or benefactors of this legislation, in comparison to those children who will be under a sole parent with this pass-on legislation? Which will give a clearer picture of the number of children in need of care and support from the State directly from the liable parent, which is what this legislation is about.

I don’t have those numbers to hand, and I believe I have already answered several times as to why the unsupported child’s benefit and pass on has not been considered in this legislation. It is because there is a review of the unsupported child benefit in the legislation going on through Oranga Tamariki, and Oranga Tamariki asked for that not to be considered as part of this particular piece of legislation.

I could go back through my cards and count how many times I’ve answered that. I’m afraid the answer is not going to change.

Yes, thank you, Minister. Has the Government assessed the long-term liability of a child living in whānau that receive sole parent support? And has the Government assessed the long-term liability of a Māori child living in whānau that receive sole parent support? The final one is that we’ve seen some elevated reporting for Māori proposed in the ACC space, is there an intention for this type of reporting for Manatū Whakahiato Ora and Te Tari Taake?

I apologise to the member. Could I ask you to repeat the question? I blanked out for a moment.

💬 Tama Potaka: The third question?

The first question.

💬 Tama Potaka: Yeah, has the Government assessed the long-term liability to the Crown of a child living in whānau that receive sole parent support?

💬 Hon Louise Upston: Point of order, Madam Chair. It is actually really difficult to hear the question and the answer with all the chatter on the other side of the Chamber. As I said, we’ve had limited scrutiny of this legislation, we do want to support it, but it will mean getting some answers to the questions.

CHAIRPERSON (Hon Jacqui Dean): Thank you. Yes, that is quite right. I was struggling to hear. So I would ask the Government benches to just quieten down a bit. Equally, I don’t know whether Tama Potaka’s microphone is—or maybe it’s his dulcet tones, I don’t know, but I was struggling to hear him, as well. So thank you for that. Now, where were we?

A little lost, I think, Madam Chair.

OK, why don’t I try and speak into the microphone—I feel like I’m at the karaoke down at Cuba Mall!

Has the Government assessed the long-term liability to the State of a child living in whānau that receive sole parent support? Has the Government assessed the long-term liability of a Māori child living in a whānau that receives sole parent support? And we have seen some elevated reporting for Māori proposed for the ACC space—the compensation scheme, is there an intention for this type of reporting for the Manatū Whakahiato Ora and Te Tari Taake?

Those are really interesting questions, but I’m not sure they’re comprehended within the scope of this bill. It would be a question to go to the broader Government stuff around benefits in general, rather than the child support pass on. So I agree they’re interesting questions, but perhaps not in respect of this particular bill.

Thank you, Madam Chair. And I actually think the questions put by my colleague Tama Potaka are very thoughtful and actually really come to the—

CHAIRPERSON (Hon Jacqui Dean): OK, sorry. I’m just going to clarify this. Relevancy is the sole judge of the Chairperson. So I will judge whether or not matters brought up by members are relevant, thank you.

Thank you, Madam Chair. On that, then, I look forward to an answer to that question from the Minister. I have a separate question, which is a bit technical—I appreciate that—but, given we are now at 31 May and this is the committee of the whole House, so there are further steps for the bill to pass before it is passed and before it is signed, assuming it does get signed, by the Governor-General, what is the confidence level that this can be actioned and implemented on 1 July, given that we have less than a month to go?

Thank you for the question. It has taken a long time to get this legislation in place. In part, that was because the systems were being built at the Ministry of Social Development and IRD to handle the technical complexities of making sure the payments actually flow through to the receiving families. I have been assured that those systems will be ready in time.

Is the Minister saying that activity and action has been taken by the Public Service ahead of Parliament’s decision about the legislation passing or otherwise?

That would, in fact, be a fairly common practice. Tax systems and social welfare systems are very, very complicated, as I am sure the member knows. Of course, a lot of preparation work is going on in the background to make sure that this does all work.

Parts 1 and 2, the Schedule, and clauses 1 and 2 agreed to.

Bill to be reported without amendment.