Social Security (Extension of Young Persons Services and Remedial Matters) Amendment Bill - Submission to the Social Services Committee [2015] NZHRCSub 5 (9 September 2015)

Last Updated: 3 December 2015

Submission on Social Security (Extension of Young Persons

Services and Remedial Matters) Amendment Bill

Social Services Committee

9 September 2015

_Introduction

1. The Human Rights Commission welcomes the opportunity to provide this submission to the Social Services Committee on the Social Security (Extension of Young Persons Services and Remedial Matters Amendment Bill (‘the Bill’).

2. The main purpose of the Bill is to extend the wraparound Youth Service programme, which currently applies to 16-18 year old beneficiaries, to:

• All 19 year old beneficiaries with children; and

• 18 and 19 year old beneficiaries without children who are considered at significant risk of long term welfare dependency.

3. The Bill also amends the sanctions regime of the Social Security Act¹ so that it applies in cases where young people fail to meet any of the new Youth Service obligations.

Summary of the Commission’s position

4. The Bill has a number of important human rights implications. International human rights principles provide that family and child benefits are crucial public policy mechanisms for enabling all children and young people to enjoy their right to an adequate standard of living². Furthermore, a human rights compliant approach to social security policy also requires that the welfare and best interests of any child or

¹ _{Section 174}

² _{UN Committee on Economic, Social and Cultural Rights, General Comment 19 on the right to social security, 4}

February 2008, E/C.12/GC/19. General Comments are interpretations of aspects of treaties by the international

body responsible for monitoring their implementation. As such they are regarded as the most authoritative legal interpretation of how a treaty should be implemented and indicate the requirements and standards that must be satisfied to ensure a State does not breach its international commitments

young person is given primary consideration in any decision-making process that affects them³.

5. Like the recent Support for Children in Hardship Bill, which introduced increases to core benefit rates⁴ and more onerous work testing requirements, this Bill introduces a range of measures that have both a progressive and retrogressive human rights impact. Progressive measures include increased income opportunities (such as the

$10 per week incentive payment), and increased investment on improving socio- economic outcomes through the extension of Youth Services. Retrogressive measures include the imposition of a more onerous set of obligations on young beneficiaries required to receive Youth Services⁵, a consequential extension of the sanctions regime⁶ and limitations placed on appeal avenues⁷.

6. While the Commission supports the progressive aspects of the reforms being introduced by the Bill, it is concerned at the potentially detrimental impact of onerous compliance obligations upon young, vulnerable people⁸, particularly if these reforms lead to an increased use of mandatory sanctions.⁹ The Commission accordingly recommends that the Committee consider amending the Bill to require that child/young person welfare impact assessment processes are carried out as a matter of course prior to any decision being made to implement sanctions.

International human rights obligations

7. The Bill engages the right to social security¹⁰ under a number of human rights instruments that the New Zealand Government has ratified, including Article 9 of the International Covenant on Economic Social and Cultural Rights, Article 26 of UN

³ Article 3.1 UN Convention on the Rights of the Child. See also Expert Advisory Group on Child Poverty (2012) Working Paper 10: Reforms to the tax, benefit and active employment system to reduce child poverty, Recommendation 3, p 7, http://www.occ.org.nz/assets/Uploads/EAG/Working-papers/No-10-Reforms-to-tax- benefit-and-employment-system.pdf

⁴ Including young people receiving the Young Parent Payment. Schedule 26 provides for an increase from

_{$300.28 to $325.28 per week. This is the same amount as parent payments to adult beneficiaries}

⁵ _{such as the additional set of obligations set out under clause 29 – new section 171A}

⁶ _{Clause 31 – new section 174A}

⁷ _{Clauses 6-9}

⁸ Many of the young people affected by this legislation will have started receiving the youth payment upon their transition from state care

⁹ In a September 2014 report, the Child Poverty Action Group reported that a lack of data on benefit sanctions has made it difficult to assess the impact of recent benefit reforms upon children.

_{http://www.cpag.org.nz/assets/Publications/140930%20CPAG%20Benefit%20Sanctions%20Report%20III.pdf}

¹⁰ _{The right to social security is a long standing international human right, recognised in the Declaration of}

Philadelphia 1944 and later incorporated in the 1948 Universal Declaration on Human Rights (Art. 22)

Convention on the Rights of the Child and Article 28.2 of the UN Convention on the

Rights of Persons with Disabilities.

8. In its General Comment 19 on the right to social security, the UN Committee on Economic, Social and Cultural Rights made a number of observations of direct relevance to the Bill, all of which are instructive when assessing the impact of the Bill. These include:

• The right to social security includes the right not to be subject to arbitrary or unreasonable restrictions of existing social security coverage¹¹

• Social security policy should be treated as a social good, not a subset of financial or economic policy¹²

• Family and child benefits are crucial mechanisms in enabling the protective functions of Article 9 and 10 of ICESCR (and by association Article 27 of UNCROC)¹³.

• Benefits must be of adequate value (both cash and in kind) to enable the realisation of, inter alia, the right to an adequate standard of living; and be accessible¹⁴.

• Qualifying criteria must be reasonable, proportionate and transparent.

Sanctions should be circumscribed, reasonable and subject to due process protections¹⁵.

• Special attention should be given to enabling vulnerable groups to realise their right to social security¹⁶

• There is a strong presumption against the adoption or introduction of retrogressive measures¹⁷

• Any persons who have experienced a violation of their right to social security have access to effective judicial recourse or other appropriate remedial avenues¹⁸.

_{The Bill’s Regulatory Impact Statement (RIS)}

¹¹ UN Committee on Economic, Social and Cultural Rights, General Comment 19 on the right to social security, 4

_{February 2008, E/C.12/GC/19, para 9}

¹² _{Ibid para 10}

¹³ _{Ibid para 18}

¹⁴ _{Ibid para 22,23}

¹⁵ _{Ibid para 24}

¹⁶ _{Ibid para 30}

¹⁷ _{Ibid para 42}

¹⁸ _{Ibid para 78}

9. The RIS¹⁹ prepared by the Ministry of Social Development notes that the Bill gives effect to the Government’s welfare manifesto concerning extension of the Youth Service approach to 18 and 19 years olds who are either young parents or are at risk of long term dependency on benefits.²⁰ The Youth Service policy is predicated on the Investment Approach – a funding model based on actuarial principles that places an emphasis on intensive service provision an “early and formative” stage of a persons’ life.²¹

10. The RIS further provides that the most recent evaluation of the Youth Service policy²² indicates that it has led to improved educational achievements and lower rates of uptake of the adult benefit amongst non-parent youth payment recipients. However, there is yet to be an evaluation of the impact of the Youth Service policy on recipients of the Young Parent Payment²³.

11. The Commission notes that international human rights principles are neutral as to the types of funding models or strategies used for the provision of social security. The UN Committee on Economic, Social and Cultural Rights has held that such measures cannot be defined narrowly²⁴. Instead, the critical factor is the capacity of policy measures to guarantee all people a minimum enjoyment of their right to social security.

12. The RIS also addresses human rights implications arising from the use of a statistical risk modelling (SRM) approach designed to assess the suitability of “at risk” 18 and

19 year old Jobseeker beneficiaries for Youth Service scheme.²⁵ The RIS notes that

the SRM approach makes distinctions based on age, family status and other “risk factors”. However, it concludes that the differential effect of the SRM approach does not “contradict” either the New Zealand Bill of Rights Act (NZBORA) or the Human Rights Act (HRA).²⁶

¹⁹ _{http://www.treasury.govt.nz/publications/informationreleases/ris/pdfs/ris-msd-eys-jun15.pdf}

²⁰ _{RIS para 20}

²¹ _{RIS para 7}

²² _{MSD Youth Service Evaluation Report, June 2014}

²³ _{RIS para 18}

²⁴ _{UN Committee on Economic, Social and Cultural Rights, General Comment 19, para 4}

²⁵ _{RIS paras 87-92}

²⁶ _{RIS para 92}

13. The Commission notes that the proposed SRM tool is a policy mechanism and is not a statutory instrument incorporated within the text of the Bill. It has therefore not been assessed by the Attorney-General for its NZBORA consistency. However, it will be used for the purposes of enabling decisions made under Clause 29 of the Bill (new section 171A) and thus should be scrutinised by the Committee.

14. Risk modelling tools are new to the social sector and raise a number of important ethical considerations. For example, as part of the development of the Children’s Action Plan, the Ministry of Social Development (MSD) commissioned the Centre for Applied Research in Economics (CARE) at the University of Auckland to undertake research on whether Predictive Risk Modelling (PRM) could be used to target early intervention and reduce child and neglect.

15. In that case, CARE found that, due to the limitations of the available data, a full ethical evaluation of PRM is necessary before implementation. It also found that an ethical framework should be developed to guide agencies in how they should respond to risk scores generated by PRM. Furthermore, CARE noted that implementation of PRM required strong engagement from front-line providers and staff²⁷, necessitating a “careful, deliberate and phased implementation” following its ethical evaluation.²⁸

16. The Commission considers that a similar ethical evaluation process should be undertaken prior to any decision being made to implement an SRM process. The Commission therefore recommends that the Committee consider adding a sunset clause to the Bill to require that the development of any SRM tool used for determining the risk of long-term welfare dependency is subject to full independent ethical evaluation prior to implementation.

Attorney-General’s NZBORA report

17. The Attorney-General’s report on the Bill’s consistency with the NZBORA notes that the Bill discriminates against young beneficiary parents and ‘at risk’ 18 and 19 year

²⁸ Centre for Applied Research in Economics (2012) Vulnerable Children: Can administrative data be used to identify children at risk of adverse outcomes? Department of Economics, University of Auckland

olds on the grounds of age, by placing money management requirements and other obligations that are not required of adult beneficiaries²⁹.

18. The report also finds the Bill discriminates against 19 year old beneficiary parents on the basis of family status, by imposing obligations not required of 19 year old non- parent beneficiaries. It further finds that the incentive payment scheme under clause

28 of the Bill discriminates on the basis of marital status insofar that it applies to the partners of beneficiary parents and does not apply to 19 year olds who are single or who have non-beneficiary partners.

19. However, the Attorney-General’s report concludes that the Bill appears to be consistent with the rights and freedoms contained in the NZBORA report finding that, in all cases, discrimination is justified due to a number of contextual factors, including:³⁰

• A rational connection between the policy objective and the limitation on the right

• Minimal impairment of rights

• The likely remedial effect of the legislation in addressing socio-economic disadvantage by improving outcomes and reducing welfare dependency.

20. The Commission notes that 18 and 19 year olds deemed at risk of long term welfare dependency may be subject to sanctions on grounds that they fail to meet their youth service obligations, obligations that are not imposed on other adult beneficiaries aged

18 and over who receive the regular jobseeker payment.

21. As noted above, the Commission is concerned at the expanded sanctions framework introduced by this Bill. This issue is addressed in more detail below at paragraphs

26-28.

_{Other NZBORA implications}

²⁹ Attorney-General report, para 15 and 18, http://www.justice.govt.nz/policy/constitutional-law-and-human- rights/human-rights/bill-of-rights/social-security-extension-of-young-persons-services-and-remedial-matters- amendment-bill

³⁰ Ibid paras 19, 23, 26

22. The Bill also amends the current legislation and overrides recent Social Security Appeal Authority case law³¹ in order to remove any possible appeal avenues that a person may have if affected by a MSD decision about another applicant or beneficiary.

23. The Bill also inserts a new a s 12J(5) which has the effect of providing that the economic (or other) effect of a decision or determination by MSD may not constitute a ground for appeal.

24. The Commission considers that these amendments raise questions about the Bill’s consistency with section 27(2) of NZBORA which provides for the right of a person whose rights have been affected by the decision of a tribunal or court to judicial review of that decision. The Commission is particularly concerned that new s 12J(5) would appear to limit the ability of a person to bring an appeal on the grounds of economic hardship.

25. The Commission accordingly recommends that the Clauses 6-9 of the Bill are deleted in order to retain current appeal rights.

Sanctions

26. The Commission is concerned that the Bill expands the application of the sanctions regime to young beneficiaries. Specifically, Clause 31 (new section 174A) provides that the Chief Executive must treat any failure by a young person aged 18 or 19 to meet the new youth service or work test obligations under Clause 29 (new section

171A) as a failure to meet their obligations under s 170 of the Act, thus triggering the sanctions provisions under s 173.

27. The Commission is concerned that this requirement is mandatory and does not require the Chief Executive to consider the impact that sanctions may have on the welfare of the young person affected by the decision. The Commission accordingly recommends the following amendments to Clause 31 of the Bill:

• Section 174A(4) is amended to provide that the Chief Executive’s may treat the young person’s failure to meet their s171A obligations, thus providing that

³¹ SSA 005/12 [2012]

triggering the sanctions regime is a discretionary rather than a mandatory outcome.

• Section 174A(4) is amended to provide that the Chief Executive must consider the welfare and best interests of the young person to whom s174A applies.

28. The Commission is similarly concerned that sections 173 and 174 of the Act respectively provide that a young person receiving a youth payment or a young parent payment is subject to mandatory imposition of sanctions without any requirement that consideration be given to the welfare and best interests of the young person or, as the case may be, their dependent child. The Commission accordingly recommends that sections 173(1) and 174(1) are amended as follows:

• The word “must” is replaced with “may” in order to change the Chief Executives function under that section from a mandatory to a discretionary function.

• Inclusion of a requirement that the Chief Executive must assess the impact of sanctions upon the welfare and best interests of the young person and any dependent child prior to making their decision.

Contact Person: John Hancock, Senior Legal and Policy Analyst

[e-mail]