Social Security (Benefit Categories and Work Focus) Amendment Bill - Submission to the Social Services Committee [2012] NZHRCSub 10 (1 November 2012)

Last Updated: 27 June 2015

Submission by the

Human Rights Commission

Social Security (Benefit Categories and Work Focus) Amendment Bill

to the Social Services Committee

1 November 2012

Contact person:

Michael White

Legal and Policy Analyst

Human Rights Commission

Direct dial 04 471-6752

Email: [e-mail]

Introduction

1. The Human Rights Commission (Commission) is an independent Crown entity that derives its statutory mandate from the Human Rights Act 1993 (HRA). The long title to the HRA states it is intended to provide better protection of human rights in New Zealand in general accordance with United Nations human rights Covenants and Conventions. The Commission’s statutory functions are to:
   • advocate and promote respect and an understanding and appreciation of human rights in New Zealand;
   • encourage the maintenance and development of harmonious relations between individuals and among the diverse groups in New Zealand;
   • lead, evaluate, monitor and advise on equal employment opportunities; and
   • provide an enquiries and complaints service.

2. The Commission has a responsibility to monitor domestic legislation for its human rights compliance and provide specialist human rights policy advice to Parliament, government agencies and other organisations and groups. Therefore, the Commission welcomes the opportunity to make a submission on the Social Security (Benefit Categories and Work Focus) Amendment Bill (Bill).

3. This submission is informed by the Commission’s work on the right to social security including its focus on those groups most vulnerable to poverty^[1]. It has drawn from evidence about overseas welfare reforms similar to those proposed for New Zealand in the Bill. In addition, the Commission has looked at the opinions and recommendations of international bodies that have recently scrutinised New Zealand’s performance under the International Covenant on Economic, Social and Cultural Rights (ICESCR) and the United Nations Convention on the Rights of the Child (UNCROC).
   
4. The Commission welcomes a focus on promoting and protecting people’s right to work. However, it is concerned about the manner in which the Bill seeks to achieve this given New Zealand’s domestic and international human rights obligations.

International Human Rights Standards

5. New Zealand has ratified the core human rights treaties and conventions. These are binding on New Zealand as a matter of international law and include obligations to progress the right to work and the right to an adequate standard of living (including social security) in addition to ensuring freedom from discrimination. The Bill risks undermining a number of New Zealand’s international obligations, particularly the obligation to progressively realise the right to social security and to protect against all forms of discrimination.

6. The right to social security, including the requirement to address the specific needs of women, children and young people, and disabled people, is detailed in the following human rights instruments to which New Zealand is a party:
   • Article 25 of the Universal Declaration of Human Rights (UDHR)
   • Articles 9 and 10 of the ICESCR
   • Article 14 of the Convention on the Elimination of all forms of Discrimination Against Women (CEDAW)
   • Article 26 of UNCROC
   • Article 28 of the Convention on the Rights of Persons with Disabilities (CRPD) and
   • Article 21 of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP).

7. The right to social security is of central importance in guaranteeing human dignity for people when circumstances deprive them of the capacity to fully realise their economic, social and cultural rights. Social security, and its interface with the tax system, redistributes resources and is essential to the attainment of rights to participate in our democracy, the right to social inclusion, to equality, education, work, housing and the highest standard of health.

8. One of the most comprehensive assessments of the right to social security is contained in the 2008 general comment from the United Nations Committee on Economic Social and Cultural rights (CESCR).^[2] It considers New Zealand and other States Parties’ compliance with their international human rights obligations under ICESCR. The Committee has identified five essential elements of the right to social security, namely:
   • availability of a sustainable social security system;
   • coverage of social risks and contingencies;
   • adequacy – of amount and duration, respecting the principles of human dignity and non-discrimination;
   • accessibility – coverage for all, especially those who are marginalised, and eligibility criteria must be reasonable, proportionate and transparent; and
   • relationship to other rights – other measures are necessary to complement the right to social security, including rehabilitation, childcare and welfare, and measures to combat poverty and social exclusion.

9. Under the ICESCR, State Parties are required to take measures “to the maximum extent of their available resources” in order to respect, protect and fulfil these rights. Together with an obligation to progressively realise the right to social security, this means that it is incumbent on New Zealand to take steps to improve its social security system in relation to all the elements described above.
   
10. CESCR has also highlighted the importance of non-discrimination, particularly for groups who traditionally face difficulties in exercising the right to social security including women and children and disabled people. In addition, both the Committee on the Rights of the Child and the Special Rapporteur on the rights of indigenous peoples have also reiterated the need to address the economic marginalisation of Māori and the impact on Māori children.^[3]

11. The UNDRIP affirms that indigenous peoples have the right to the “recognition, observance and enforcement of treaties... and to have States honour and respect such treaties” (article 37). It also recognises that “treaties, agreements and other constructive arrangements, and the relationship they represent, are the basis for a strengthened partnership between indigenous peoples and States” (preamble, paragraph 19).

12. The Treaty of Waitangi is New Zealand’s own unique statement of indigenous and human rights, setting out the rights and responsibilities of the Crown, Rangatira (Māori leaders) and of all New Zealanders. In affirming the foundational status of the Treaty, UNDRIP upholds the rights conferred by that agreement. Those particularly relevant to this submission are Articles 1 and 3 of the Treaty. Article 1 sets out the state’s right and responsibility to govern. While, under Article 3, all people the right to live as equal citizens in New Zealand. This includes the right to social security coverage on an equal basis for all.^[4]

13. Non-discrimination is a fundamental component of all core international human rights covenants and conventions. The CESCR’s General Comment No. 18 reiterates that “even in times of severe resource constraints, disadvantaged and marginalized individuals and groups must be protected by the adoption of relatively low-cost targeted programmes”.^[5] This should include a focus on sole parents, disabled people and other groups that are disproportionately represented amongst the long-term unemployed.

14. In May 2012 the CESCR sent an open letter to New Zealand and all other signatories to the ICESCR about “protection of the Covenant rights in the context of the economic and financial crisis”.^[6] It emphasised the need to pay specific attention to reducing inequalities and ensuring that the rights of marginalised groups are not disproportionately affected. Specifically it noted:

that States parties should avoid at all times taking decisions which might lead to the denial or infringement of economic, social and cultural rights . . . .

. . . . this requires States to adopt and implement laws and policies that aim to achieve incremental improvements in universal access to basic goods and services such as health care, education, housing, social security and cultural life.

The Committee realizes that some adjustments in the implementation of some of these Covenant rights are at times inevitable. States Parties, however, should not act in breach of their obligations under the Covenant.

In such cases, the Committee emphasizes that any proposed policy change or adjustment has to meet the following requirements:

• First, the policy is a temporary measure covering only the period of crisis;
• Second, the policy is necessary and proportionate, in the sense that the adoption of any other policy, or a failure to act, would be more detrimental to economic, social and cultural rights;
• Third, the policy is not discriminatory and comprises all possible measures, including tax measures, to support social transfers to mitigate inequalities that can grow in times of crisis and to ensure that the rights of the disadvantaged and marginalised individuals and groups are not disproportionately affected ;
• Fourth, the policy identifies the minimum core content of rights, or a social protection floor, as developed by the International Labour Organisation, and ensures the protection of this core content at all times.

The Bill

15. As noted in the Bill’s explanatory note, it amends the Social Security Act 1964 (SSA) to:
    • reduce benefit dependency;
    • support an investment approach to focus resources where they will be most effective;
    • support beneficiaries into work; and
    • introduce social obligations for parents and encourage beneficiaries with warrants to arrest to clear them.

Social Obligations

16. The Bill imposes social obligations on those receiving certain financial support through the social security system. The social obligations require beneficiary parents (or caregivers) to take all reasonable steps to have their dependent child:
    • aged three years or over enrolled in and attending early childhood education (ECE) for 15 hours per week until they start school;
    • enrolled in and attending school from the age of five (or six) years depending on when the child first starts school;
    • enrolled with a primary healthcare provider; and
    • up-to-date with the core Well Child checks.

17. This represents a fundamental change to the provision of social security in New Zealand. Those receiving welfare benefits will not only be required to meet work availability and work preparation obligations but also to adhere to these social obligations. Most of these social obligations fall within the range of ordinary parenting norms in New Zealand. However by setting a specific minimum level of ECE participation, the Bill effectively means that beneficiary parents have less flexibility than other parents in assessing what level and type of ECE is in the best interests of their individual children. This is compounded by the financial penalties a parent receiving a benefit faces for not meeting these obligations.

18. The Bill sets out the following sanctions for non-compliance with these social obligations:
    • in the case of a first failure, a reduction in benefit of 50 percent until the person re-complies;
    • if the person has not re-complied within four weeks, the benefit is further reduced by 50 percent (amounting to a 100 percent reduction) until the person re-complies;
    • in the case of a second failure, the benefit is suspended until the person re-complies; and
    • in the case of a third failure, the benefit is cancelled.

19. Certain safeguards are introduced in the Bill in an attempt to mitigate the inappropriate application of sanctions. For example, the Chief Executive of the Ministry of Social Development (MSD) must ensure that reasonable and appropriate steps are taken to ensure every beneficiary is aware of their social obligations.^[7] In addition sanctions can only be imposed where the beneficiary has failed without reasonable cause to comply and MSD has communicated with them regarding this failure (or potential failure) to comply on at least three occasions.^[8]

20. The Commission is concerned that these provisions breach New Zealand’s international human rights obligations because they impose further conditions on access to and adequacy of benefits and are retrogressive in terms of the State’s obligation to realise the right to social security. Furthermore the provisions are likely to increase stigmatisation of families on benefits given the explicit messaging that this group need to be coerced into parenting norms. This would breach the right to be treated with human dignity.

21. The Commission is also concerned about how people will cope with both the threat and actuality of losing some or all of their income. Overseas evidence of similar sanctions indicates these types of sanctions can:^[9]
    • exacerbate the poverty-related risks for families on benefits - such as losing accommodation, going without food, increasing stress and anxiety and contributing to declining health (in some cases resulting in premature death);
    • have negative long term effects in terms of people’s earning capability, women’s location in the marginalised workforce and access to employment opportunity, child wellbeing and crime rates;
    • exacerbate and entrench disadvantage associated with lack of educational opportunity, disability, youth, gender or culture;
    • in operation, lead to racial and area targeting. In this regard, the Commission is concerned about the intention to target reflected in the comment in the Regulatory Impact Statement (RIS) that - “only a portion of all beneficiaries who have the obligation would be targeted for compliance testing” and “because the majority are expected to comply it can be operationally focused on families with children identified as being the most vulnerable”. ^[10]

22. The Ministry of Justice (MOJ) has provided advice to the Attorney General on whether the imposition of social obligations is consistent with the right to freedom from discrimination under the New Zealand Bill of Rights Act 1990 (BORA). MOJ concluded that the imposition of social obligations on beneficiaries did not represent a prima facie breach of section 19 of the BORA. Furthermore, even if it did, that any such discrimination is justifiable under section 5 primarily because the obligations were deemed to be beneficial for children and young people.
23. Children from lower socio-economic groups, and in particular benefit-supported households, are at greater risk of experiencing a range of negative social outcomes. Participating in health and education services improves outcomes for children and young people. Therefore the MOJ argues that the specific social obligations in the Bill are in children’s best interests.

24. However, the Commission acknowledges concerns that this may not be true for all children at all times. For example, the requirement to be enrolled in 15 hours’ ECE has been subject to criticism from some parents and educationalists. A number have cited New Zealand Kindergartens’ recommendation that three year olds should only be in 12 hours ECE per week, not 15 as required in the Bill.

25. While there is obvious value in encouraging participation in ECE, and in primary education and health services, the Commission considers that there are less intrusive and more rational alternatives to the sanctions proposed in the Bill to achieve this goal. For example, further consideration should be given to a more flexible case management approach.

26. Furthermore evidence from overseas indicates a high risk that sanctions will impact negatively on children. In the United States, for example, welfare sanctions have been linked to a 30 percent increase in risk of hospitalisation and a 50 percent greater risk of food insecurity for infants and toddlers. More generally, they have exacerbated chronic health conditions or the onset of acute and serious health problems in young children.^[11]

27. Peters and Joyce’s 2006 review of the United Kingdom’s sanctions regime identified mixed findings about the impact of sanctions.^[12] Over two-thirds (68 per cent) reported financial hardship resulting from sanctions. Qualitative interviews with seventy beneficiaries showed they relied on friends and family, took out loans, spent savings or applied for other benefits or allowances after being financially sanctioned. Reliance on family and friends meant sanctions had a knock-on effect within the wider community and potentially prolonged the financial impact as people took time to pay off debt.^[13]
    
28. The CESCR has recently expressed concern about the retrogressive nature of welfare reforms and “urged [New Zealand] to meet its obligations under the Covenant by ensuring that welfare reforms, including those aimed at reducing long-term welfare dependency, protect the right to social security and to an adequate standard of living in respect of disadvantaged and marginalized individuals and groups”.^[14]
    
29. In light of these concerns the Commission recommends that the Government re-evaluate the need for these sanctions with particular regard to the impact that they will have on child poverty in New Zealand. Rather than imposing a regime of sanctioned social obligations on beneficiaries with children, the Commission suggests that priority be given to progressing the following recommendations made by the United Nations Committee on the Rights of the Child (CRC) in January 2011.

30. The CRC noted with concern the number of children who continue to live under the poverty line and recommended that New Zealand “take all necessary measures to provide appropriate support to allow disadvantaged families and their children to move out of poverty in a sustained way while, at the same time, continuing to provide assistance to those under the poverty line.”^[15] In addition it recommended that:
    • inequalities in access to health services are addressed through greater co-ordination between health policies and those aimed at reducing income inequality and poverty^[16]
    • steps are taken to ensure that all children have access to high quality early child-care education that, at a minimum, is free for socially disadvantaged children and families^[17]
    • efforts are intensified to develop services that provide assistance to parents and legal guardians in their child-raising duties, including parenting-support counselling, drug and alcohol treatment and culturally appropriate services for Māori and Pacific people^[18] and
    • stronger efforts are made to provide young people with appropriate reproductive health services, including education and promotion of healthy lifestyles.^[19]
      
31. Children whose parents are dependent on income from a social security benefit are particularly vulnerable to hardship and poverty. In June 2011 there were 234,000 children in beneficiary families. This amounts to 22% of all dependent children. Around 25% of children live in households in which there is no adult in full-time employment. Recent MSD research highlights the systemic, disproportionate impact of poverty and hardship on children in sole parent and/or beneficiary families, particularly Māori children.

Poverty rates for children in beneficiary families are consistently around 65-75%, much higher than for children in families with at least one adult in full-time employment (9% in 2011). Since the benefit cuts in 1991, 65-75% of children in beneficiary families have been identified as ‘poor’ in each Household Economic Survey. The figure was close to 70% for 2004 to 2009, and 65% in 2011 . . .

Children in sole-parent families have a higher risk of hardship (46%) than those in two- parent families (12%). On average in 2010 and 2011 around half of poor children lived in sole-parent families and half in two-parent families . . .

Poverty rates for Maori and Pacific children are consistently higher than for European/Pakeha children. On average from 2009 to 2011, just under half of poor children were Maori or Pacific.

On average over 2007 to 2011, around one in six European/Pakeha children lived in poor households, one in four Pacific children, and one in three Maori children (double the rate for European/Pakeha children). The higher poverty rate for Maori children is consistent with the relatively high proportion of Maori children living in sole-parent beneficiary families and households (e.g. around 43% of DPB recipients were Maori in the 2007 to 2011 period).^[20]

32. Welfare reforms have the potential to significantly impact, either positively or negatively, on the wellbeing of these children. It is therefore crucial that any welfare reforms, including the current Bill, give paramount consideration to the best interests of the child, as required under Article 2(1) of the UNCROC. For this reason, the Commission recommends that social obligations on beneficiaries with dependent children, enforced through financial sanctions, are removed from this Bill.

33. However, if the Bill proceeds with social obligations and related sanctions, the Commission recommends that:
    • a provision be inserted requiring consideration of the best interests of any child likely to be affected by the sanctions
    • that sanctions are assessed at the outset on an individual basis and only applied as a matter of last resort after all other options have been exhausted.

Adequacy of benefits

34. Long-term reliance on income from welfare benefits heightens poverty and deprivation. The 1972 Royal Commission on Social Security recommended the welfare system should ensure beneficiaries a standard of living at least similar to that of other New Zealanders, so that they participated in and felt they belonged to the community at large.^[21] This focus was reiterated by the 1988 Royal Commission on Social Policy. It concluded that people require “access to a sufficient share of income and other resources to allow them to participate in society with genuine opportunity to achieve their potential and to live lives they find fulfilling”.^[22]

35. Yet in terms of adequacy, the real value of core benefits, including family tax credits, remains well below levels prior to cuts in 1991.^[23] Even when accommodation and special benefit / temporary assistance supplements are taken into account, the level of financial support to beneficiaries has fallen in real terms over this period.^[24]
    
36. For these reasons, the Commission’s December 2010 assessment of 30 priority actions required to improve human rights in New Zealand recommended “reviewing and addressing the adequacy of core benefit rates”.^[25]

37. The Commission is concerned that such an assessment has been notably absent from current welfare reform debates. New benefit categories in the Bill would potentially have reduced benefit rates even further for those people who moved from a part-time work test (and abatement rate) to a full-time work-test and much higher effective marginal tax rate.

38. The Commission supports the decision to ensure that current beneficiaries do not face a drop in income, through the Bill’s proposal to grandparent current arrangements for beneficiaries in this position. However it notes that the new benefit categories mean a larger proportion of those coming on to benefits will be on a fulltime work-test and subject to the financial constraints of higher abatement and effective marginal tax rates. This is likely to impact on poverty and hardship rates for these beneficiaries and their families.

39. As already noted in this submission, the Commission is concerned that the application of sanctions for non-compliance with social obligations will result in further deprivation for vulnerable groups and individuals. The Bill proposes a variety of sanctions and penalties in addition to those associated with social obligations including:
    • where a person (with a work availability expectation) turns down any offer of suitable employment they will have their benefit cancelled and a 13 week stand down will apply;

• where a person does not fulfil their social obligations they may have their benefit reduced or suspended;
• where a person has a warrant out for their arrest that has been outstanding for 28 days their benefit may be suspended;
• where a person fails or refuses a drug test they may have their benefit suspended or cancelled; and
  • where a person or their spouse or partner fail to comply with pre-benefit activities.
    

40. In light of inadequacies in current core benefit rates, these reductions or suspensions are likely to have significant consequences for the health and wellbeing of affected beneficiaries and their families. The Commission notes that when a beneficiary has dependent children the maximum level of financial sanctions (50%) is less than the 100% reduction for beneficiaries without children. However given many household expenses are fixed, including high budget items such as housing costs, often the most discretionary household expense is food. A 50% drop in family income is likely to have a significant impact on children’s access to food and therefore nutrition.
    
41. The Commission considers that the sanction provisions in the Bill undermine New Zealand’s obligation to progressively realise the right to social security and suggests that it is timely for benefit levels to be reviewed.

42. While there is a limited public purse, there are strong economic arguments for ensuring adequate benefit levels. There are correlations between benefit levels and prison populations. Those countries with better welfare systems and more equal distribution of wealth tend to have lower incarceration rates.^[26] In economic terms therefore, overseas experience indicates that what the government may save in welfare costs, it pays for elsewhere, particularly in relation to criminalisation and incarceration costs.

New Benefit Categories and Disabled People

43. The Bill abolishes the Sickness Benefit (SB). People who were previously eligible for the SB will be moved to the Jobseeker Support Benefit (JSB) and be subject to work availability requirements and pre-benefit activity requirements.

44. The JSB is targeted at people who can work at least 15 hours a week, or perhaps need a short time to recover from illness or injury before returning to work. For those who are unlikely to ever be able to support themselves through work, the Invalid’s Benefit (IB) is replaced by the Supported Living Payment (SLP). However, the Bill requires those on SLP who are deemed “up to it” to undertake work preparation and to have a work plan.

45. The Bill’s proposals reflect the approach adopted in the United Kingdom (UK), which is based on the use of the bio-psychosocial model of disability.^[27] The discontinuation of the sickness benefit in the UK, as well as the introduction of work capability assessments has been very controversial. Professor Harrington’s first independent review in the UK highlighted significant problems with fairness and transparency of the work capability assessment process conducted by contracted providers such as Atos Healthcare for Jobcentre Plus (the UK equivalent of Work and Income).^[28]

In broad terms, the pathway for the claimant through Jobcentre Plus is impersonal, mechanistic and lacking in clarity. The assessment of work capability undertaken for the Department for Work and Pensions by Atos Healthcare suffers from similar procedural problems. In addition, some conditions are more subjective and evidently more difficult to assess. As a result some of the descriptors may not adequately reflect the full impact of such conditions on the individual’s capability for work.

The final decision on assigning the claimant to one of the three categories theoretically rests with the Decision Maker at Jobcentre Plus but, in practice, the Atos assessment dominates the whole procedure. This imbalance needs correcting and the Decision Maker, using the Atos assessment as part of the whole data gathering exercise, needs to take control. Such a shift in procedure and authority would almost certainly decrease the high number of referrals to the appeals process– itself a stressful and time consuming activity for the claimant.

The claimant needs to feel that they have been fairly treated and thoroughly assessed. They need to know that the object of the whole exercise is accurately to assign them to a work or a work-related activity group but also to ensure that those who cannot work receive the full support of the state.

46. UK disability advocates continue to raise concerns about the assessment processes. One particular area of concern is that people who live with severe mental illness and conditions such as Chronic Fatigue Syndrome and Fibromyalgia have been interpreted as capable of work despite medical reports to the contrary. Thus people have been left extremely unwell with no income.
    
47. The Commission is concerned that a similar situation may occur in New Zealand with a group of vulnerable people, including those with mental illness, being unable to work and unable to receive adequate social security assistance. In some cases they may also become subject to sanctions under the Bill.

48. By ratifying the United Nations Convention on the Rights of Persons with Disabilities (CRPD) in 2008 New Zealand has committed to protecting the rights of disabled people. The CRPD adopts a social model of disability. That model of disability, developed in the 1980s, emphasises that people with disabilities are disempowered not due to their impairments, but rather by the barriers they face which flow from societal attitudes and restrictions against disabled people.^[29]

49. While a bio-psychosocial model of disability focuses on capacity assessment, the emphasis in a social model of disability is on creating work opportunities and removing employment barriers. The workplace barriers disabled people report include lack of reasonable accommodation, employers who have little information or knowledge about how to respond to reasonable accommodation requests, and discriminatory workplace attitudes. These are compounded by inadequate support outside the workplace, for example inaccessible transport and inflexible disability support arrangements.

50. People with disabilities want work. The key challenge is to ensure that barriers to participation and inclusion are addressed. The CRPD anticipates that States Parties shall take all appropriate steps to ensure that reasonable accommodation is provided. Reasonable accommodation is defined as:

... necessary and appropriate modifications and adjustments not imposing a disproportionate or undue burden, where needed in a particular case, to ensure to persons with disabilities the enjoyment or exercise on an equal basis with others of all human rights and fundamental freedoms.

51. It is important that disabled people’s right to reasonable accommodation when seeking employment is protected. This includes their right to refuse work that does not meet these requirements, without being sanctioned. People with mental illness, for example, may require specialised services, including assistance with pre-vocational issues, social preparation for employment, and flexible post-placement support. What is 'reasonable' should be viewed in a positive and practical light, with activity directed toward what is possible given a specific situation and not limited strictly to avoidance of costs.^[30]

52. By adopting a bio-psychosocial model the Bill is at odds with the spirit and letter of the CRPD. The Commission recommends that further consideration be given to the application of work availability and pre-benefit requirements in relation to disabled people. People assessed as eligible for the Supported Living Payment should be given work opportunities that match their skills, abilities and aspirations without the threat of sanction if the appropriate opportunity cannot be found or their support needs cannot be reasonably accommodated.

53. Therefore before work ability assessments and work availability and pre-benefit requirements are introduced for disabled people, it is vital to ensure that:

• appropriate, decent work opportunities exist
• these jobs protect disabled people’s right to reasonable accommodation and
• disabled people’s general living arrangements are not significantly compromised by these requirements.

54. Without such prerequisites, the Commission recommends that any work availability and pre-benefit obligations (and corresponding sanctions) on disabled people should be removed from the Bill.

55. The Commission is aware of and supports concerns raised by disability groups about the title of the new Supported Living Payment. Specifically, the Commission understands that the name is identical to that used for another service provided to disabled people, through the Ministry of Health. This is likely to be particularly confusing for people with a learning disability. Therefore the Commission recommends the SLP is renamed, in consultation with disabled people. The amended name should meet the obligations set out in the CRPD, including respect for the inherent dignity of disabled people, and clearly distinguish this benefit from other services that disabled people receive.

Disability allowance costs

56. The CRPD is based on a number of core principles including the right to respect for one’s inherent dignity, individual autonomy and independence. The Bill’s provisions may significantly reduce some disabled people’s ability to exercise their autonomy in accessing supports and services that they require. Specifically, clause 69C of the Bill requires goods and services that are to be purchased with a disability allowance to be purchased from a ‘preferred supplier’. While this may be an appropriate option for some disabled people, the Commission is concerned that a ‘standard supplier’ may not be suitable for the diversity of disability needs. Thus the provision may not provide the necessary degree of individualised support that underpins current disability reforms.

57. The Commission understands that items that might be covered by the Disability Allowance include, for example, counselling, health-related dietary needs, some additional medication costs, and travel to a doctor. If a preferred supplier reduces flexibility by limiting available options, this is likely to adversely affect the health and wellbeing of some disabled people.

58. The Commission acknowledges that there is discretion in the Bill for the Chief Executive to allow an individual to purchase goods from alternate suppliers. However, this exception is extremely limited. It only applies where a person is receiving the maximum appropriate rate of the disability allowance and the preferred supplier does not stock the item required. The Commission believes that this is inadequate. It would be more appropriate and in line with New Zealand’s international human rights obligations to enable decisions to be made on a case-by-case basis taking into account the diversity of disability needs.

59. Perhaps more worrying is the fact that the Bill removes any right of review in relation to a decision by Work and Income about disability allowance costs.^[31] The right to review a determination made by a public authority is a longstanding principle of New Zealand’s legal system, is codified in international human rights law^[32] and affirmed by customary international law.
    
60. Assessing disability needs and supports is complex. The Commission is concerned that the lack of review and appeal rights may result in some people who would otherwise legitimately be entitled to disability support being forced to live without the supports and assistance that they need to fully participate in the community.

Drug Testing

61. The Bill introduces pre-employment drug testing requirements for beneficiaries to determine whether the candidate’s capacity to work, or be trained for employment, is impaired. The Commission notes and welcomes the Bill’s distinction between those who have a dependency on drugs and recreational drug-users. This reflects international jurisprudence confirming that drug (or alcohol) dependency is a medical condition and therefore any sanctions against someone dependent on drugs amounts to prima facie discrimination on the ground of disability.^[33]

62. In relation to people with a drug dependency, the Commission welcomes provision for them to be offered support. However, it is important that people are not compelled to undertake medical treatment and that sufficient recognition and allowance is given to the complex long process of recovery from addiction. There is also a need to recognise the geographical differences in programme availability and for services to be sufficiently responsive to Māori, other cultural groups, young people and people with disabilities.

63. Recreational drug-use is not protected under anti-discrimination law. However there are still limitations on workplace drug-testing given the right to be secure against unreasonable search and seizure (section 21 of the BORA) and the right to privacy.

64. The Bill’s drug testing requirements only apply where undertaking and passing a drug test is required as part of a job application or training programme. This is a necessary but not sufficient limitation on workplace drug-testing.

65. The threshold in relevant case law is typically tighter than that a drug test is required by an employer. For example, the three-fold test established in the Canadian case British Columbia v British Columbia Government and Service Employees’ Union^[34] requires assessing:
    • Did the employer adopt the policy and standard for a purpose rationally connected to the performance and the job?
    • Did the employer adopt the particular policy or standard in an honest and good faith belief that it was necessary to the fulfilment of that legitimate, work-related purpose?
    • Is the policy or standard reasonably necessary to the accomplishment of that legitimate, work-related purpose?

66. Given the potential human rights implications of drug-testing provisions that are coupled with sanctions, the requirement to pass a drug-test should be clearly justified in every case. The Commission recommends that transparent criteria, based on relevant case law, should be used to determine whether passing a drug test is a reasonable requirement for a specific job.

67. Finally there is a range of technical issues that the Bill does not address. Firstly it is difficult to distinguish between drug dependency and recreational drug use. Secondly it is possible to test whether a potential or current employee’s reactions and judgements are impaired by alcohol and therefore affecting their work performance. However, in the case of drugs, it is often hard to show that a positive drug test equates with impairment. These technical issues are likely to impact on the practical feasibility of the Bill’s proposals.

Monitoring and Evaluation

68. As already noted, specific population groups (including disabled people, Māori and women) will be disproportionately affected by current welfare reforms. Families on benefits are more likely to be those with greater caring responsibilities, for young children or for ill or disabled family members. Two out of every five disabled children, whose disability is sufficiently severe for their carers to receive the child disability allowance, live in families dependent on a core benefit or New Zealand Superannuation.^[35]

69. In July 2012 the United Nations Committee on the Elimination of all forms of Discrimination against Women (CEDAW Committee) noted with concern that the “new social security legislation will likely predominantly affect Maori women and reduce social benefits”.^[36] The Committee recommended that “[New Zealand] ensure that the ongoing welfare reforms do not discriminate against disadvantaged groups of women and that an independent evaluation of their gendered impact is made.”^[37]
    
70. The Committee reiterates concerns raised by the Commission in its submission on the Social Security (Youth Support and Word Focus) Amendment Bill, recommending an independent evaluation to monitor the impact of welfare reforms. This included the need for greater public access to relevant MSD administrative data and ensuring that such data can be disaggregated sufficiently to measure the impact of welfare reforms on groups vulnerable to systemic disadvantage. The Commission specifically recommended scoping options for collecting better data on beneficiaries with disabilities.
71. The current Bill does not provide enough detail to assess whether planned monitoring and evaluation of this second stage of welfare reforms will be sufficient either. The Commission recommends that government funding is provided for an independent evaluation of the impact of welfare reforms on levels of:
    • hardship
    • poverty
    • inequality and / or
    • direct or indirect discrimination against vulnerable groups.

72. This monitoring and evaluation should involve consultation with those currently receiving benefits, those who have moved off benefits since welfare reforms were introduced and population groups (including disabled people) who are disproportionately reliant on benefits as their primary source of income.

Recommendations

73. The Commission believes that the Bill’s provisions introducing social obligations and drug-testing, both backed by sanctions for non-compliance, will disproportionately impact on those individuals who are already in vulnerable situations. In some cases the provisions may force people off benefits and into poverty.

74. The Bill also changes the way in which social supports and services are applied to disabled people. These provisions potentially limit accessibility and undermine the rights of disabled people to live independently and with autonomy.

75. In conclusion, the Commission has serious concerns about the passage of the Bill in its current form and recommends:
    
    • removing the social obligations on beneficiaries with children that would be enforced through financial sanctions
    • if the Bill does proceed with social obligations and related sanctions, that a provision be inserted requiring:
      • - consideration of the best interests of any child likely to be affected by the sanctions
      • - that sanctions are assessed at the outset on an individual basis and
      • - that sanctions are only applied as a matter of last resort after all other options have been exhausted.
    • removing work availability and pre-benefit obligations (and corresponding sanctions) on disabled people unless it can be demonstrated that appropriate work opportunities exist, disabled people’s general living arrangements are not significantly compromised and their right to reasonable accommodation has been protected
    • introducing a broad discretion to enable decisions about whether or not disabled people must use a preferred supplier to be made on a case-by-case basis taking into account the diversity of diversity needs
    • ensuring that review and appeal rights are maintained in relation to all determinations made by Work and Income, including decisions about disability allowance costs
    • amending the name of the Supported Living Benefit, in consultation with disabled people, to reflect the principle of respect for a disabled person’s inherent dignity and to clearly distinguish this benefit from other services that disabled people receive
    • ensuring transparent criteria, consistent with relevant case law, for assessing whether passing a drug test is a reasonable requirement for a specific job
    • independently evaluating the impact of welfare reforms in order to monitor and address any negative impact they might have on hardship, poverty, inequality or direct or indirect discrimination against vulnerable groups and
    • urgently reviewing the adequacy of core benefit rates.

76. Thank you for the opportunity to make a submission on this Bill. The Commission would like to appear before the Select Committee to speak to this submission. Any questions about the submission can be directed, in the first instance, to the Commission’s Legal and Policy Analyst Michael White on [e-mail] .

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^[1] See for example the right to social security chapter in Human Rights in New Zealand 2010 and the Commission’s submissions to the Welfare Working Group and on the Social Security (Youth Support and Work Focus) Amendment Bill 2012. Accessible online at: http://www.hrc.co.nz/hrc_new/hrc/cms/files/documents/15-Dec-2010_12-41-26_Chapter_15pp220-237.pdf, http://www.hrc.co.nz/resources#submissions and http://www.hrc.co.nz/2012/submission-on-social-security-youth-support-and-work-focus-amendment-bill respectively.
^[2] Committee on Economic, Social and Cultural Rights (2008), general comment 19. The right to social security, 39th session: E/C.12/ GC/19. Accessible online from: http://www.unhcr.org/refworld/docid/47b17b5b39c.html
^[3] Committee of Economic, Social and Cultural Rights (2012), Concluding observations in relation to New Zealand’s third periodic report, E/C.12/NZL/3; Committee on the Rights of the Child (2011), Concluding observations in relation to New Zealand’s third and fourth periodic reports, CRC/C/NZL/CO/3-4.
^[4] A more detailed analysis of the relationship between UNDRIP and the Treaty of Waitangi is contained in the Commission’s 2012 submission to the Māori Affairs Committee’s Inquiry into the determinants of wellbeing for Māori children. This is accessible online at: http://www.hrc.co.nz/2012/maori-children-denied-basic-human-rights
^[5] At para 12. See also CESCR general comment No. 3 (1990) The nature of States parties’ obligations, paragraph 12.
^[6] Accessible online at: http://www2.ohchr.org/english/bodies/cescr/docs/LetterCESCRtoSP16.05.12.pdf
^[7] New s 60 RB.
^[8] New s 60RC(1) and (3).
^[9] For example, Griggs J & Evans, M (2010) A review of benefit sanctions. Accessible online at: www.jrf.org.uk.
^[10] Ministry of Social Development (2012) Regulatory Impact Statement: Proposals for Bill two of the Welfare Reforms. Accessible online at: http://www.treasury.govt.nz/publications/informationreleases/ris/pdfs/ris-msd-wrpbt-sep12.pdf
^[11] Children’s Sentinel Nutritional Assessment Program Report (2002), The Impact of Welfare on the Health of Infants and Toddlers A report from the children’s sentinel nutrition assessment program. Accessible online at: http://www.childrenshealthwatch.org/upload/resource/welfare_7_02.pdf
^[12] Office of the Minister for Social Development (15 February 2012) Paper B Welfare Reform: Availability and preparation for work for sole parents, widows, women alone and partners, para 50.
^[13] Peters, M. and Joyce, L. (2006) Review of the JSA Sanction Regime: Summary Research Findings, DWP Research Report No. 313. Accessible online at: http://research.dwp.gov.uk/asd/asd5/summ2005-2006/313summ.pdf
^[14] Supra note 3.
^[15] Supra note 3.
^[16] Ibid, Paragraph 37
^[17] Ibid, Paragraph 45(a)
^[18] Ibid, Paragraph 31
^[19] Ibid, Paragraph 41(a)
^[20] Perry, B. (2012) Household Incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011, pp 18-19. Wellington: Ministry of Social Development. Accessible online at: http://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/monitoring/household-income-1982-2007/2012-hir-main-report.doc

^[21] Krishnan, V (1995) “Modest but Adequate: An Appraisal of Changing Household Income Circumstances in New Zealand”. Social Policy Journal of New Zealand 1, 3.
^[22] Royal Commission on Social Policy (1988) The April Report – Report of the Royal Commission on Social Policy, p731. Wellington: Royal Commission on Social Policy.
^[23] Fletcher, M. & Dwyer, M. (2008) A Fair Go for all Children: Actions to address child poverty in New Zealand. A report for the Children’s Commissioner and Barnardo’s. Wellington: Office of the Children’s Commissioner.
^[24] Ibid; p 37
^[25] New Zealand Human Rights Commission (2010), Human Rights in New Zealand Summary. Accessible online at: http://www.hrc.co.nz/human-rights-environment/human-rights-in-new-zealand-2010

^[26] Savage, Joanne, Richard R. Bennett and Mona Danner (2008) 'Economic Assistance and Crime: A Cross-National Investigation', European Journal of Criminology 5(2): 217-238.
^[27] In a September 2012 address to medical professionals, the Social Development Minister confirmed that the proposed welfare reforms drew extensively on the UK experience: http://www.beehive.govt.nz/speech/speech-medical-professionals
^[28] Professor Malcolm Harrington (November 2010) An independent review of the work capability assessment. Accessible online at: http://www.dwp.gov.uk/docs/wca-review-2010.pdf
^[29] Andreas Dimopoulos (2010) Issues in Human Rights Protection of Intellectually Disabled Persons pp.19-25. C Barnes, G Mercer and T Shakespeare (1999) Exploring Disability: A Sociological Introduction p 21.

^[30] Many accommodations will incur little or no costs.
^[31] Clause 28 of the Bill.
^[32] See for example, article 2 of the ICCPR.
^[33] See for example, Carr v Botany Bar Council [2003] NSW ADT 2009; Milazzo v Autocar Connaisseur 2003 CHRT 37; and Alberta v Kellog, Brown & Root 2007 (ABCA) 426.
^[34] [1999] 3 S.C.R. 3, 1999 SCC 48.
^[35] Fletcher, M. & Dwyer, M. (2008), p. 5.
^[36] Accessible online at: http://www2.ohchr.org/english/bodies/cedaw/docs/co/CEDAW-C-NZL-CO-7.pdf
^[37] Ibid.