THE STATISTICAL REPORT

FOR THE YEAR ENDING JUNE 2006

Section 2: Assistance provided by Work and Income

This document is Section 2 of 7. The other sections and the appendices of the Statistical Report can be found on the MSD website www.msd.govt.nz.

Section 2 Assistance provided by Work and Income

Introduction

This section summarises information on the use of financial assistance and employment services offered by MSD’s Work and Income service line. Sections 3 and 4 contain more detailed information about eligibility for, and use of, the assistance provided by Work and Income. Information about the use of financial assistance provided by MSD’s StudyLink service line is outlined in Section 5.

Income tests, work tests and client development processes applied when providing benefits and pensions are briefly described in Appendix 1. Appendix 2 outlines the definition of official unemployment, and reasons for differences between the number of registered job seekers and the number of people officially unemployed. Appendix 3 contains additional information about the ages of people receiving or covered by Work and Income assistance.

Conventions in this report

Focus on working aged clients

Information in Section 3 concerning the use of main benefits is focused on working aged clients. This report defines “working aged” clients as aged 18–64 years, to reflect the minimum age of eligibility for most main benefits and the age of qualification for New Zealand Superannuation. To maintain consistency with earlier reports in this series, total numbers of recipients of main benefits over all age groups are also shown. If required, more information can be obtained from MSD’s Decision Support team.

Naming of financial assistance

This report uses the term “main benefit” to refer to the group of benefits previously referred to as “income-tested benefits”. This change in terminology reflects a new MSD reporting convention.

Throughout this report, financial assistance is referred to:

·  by the official name (as at the end of June 2006) of a specific type of financial assistance (eg Domestic Purposes Benefit – Sole Parents), or

·  as part of broad groups of main benefits that are delivered for similar purposes (defined in Section 3).

The official names for financial assistance used in this report have been current since at least 1 July 2001. Where the official name for assistance has changed over time (eg Community Wage – Job Seeker to Unemployment Benefit), this is noted within the relevant section of the report.

Information sources

The report refers to SWIFTT and SOLO as data sources. SWIFTT is the system used by Work and Income to record information about recipients of financial assistance and the assistance they receive. MSD holds a comprehensive record of information collected in SWIFTT since 1996. SOLO is the system used by Work and Income to record information about registered job seekers and about employment services being provided. It contains a comprehensive record of information collected since 1999. MSD also holds some information for earlier years concerning financial services, employment services and registered job seekers.

Statistics shown in the report

Trends over time in the numbers of people receiving assistance from Work and Income are shown as numbers receiving services at the end of June. This approach aims to show both broad trends over time in service use and the actual numbers of clients receiving services.

Please note, however, that this approach gives no information about numbers receiving Work and Income assistance at other times of the year. Large numbers of people may be granted assistance from Work and Income, and later cease receiving that assistance, without being reflected in numbers receiving benefits at the end of June. Assistance provided to such clients is, however, reflected in statistics showing assistance granted, assistance ceased, and expenditure on assistance. Because of this, the difference between assistance granted and assistance ceased during the financial year will not correspond to the change from June to June in numbers of people receiving assistance.

All data showing trends in the use of main benefits excludes spouses, partners and dependants of people receiving these benefits. Data on the use of pensions includes non-qualified spouses receiving pensions, but excludes any other dependants of the client. This report therefore does not indicate the total number of people, or the proportion of the population, who are dependent on benefits or pensions.

It should also be noted that around 2% of work services clients are not registered job seekers, and are excluded from job seeker statistics. These clients consist of:

·  vacation workers

·  people already working full-time but seeking to change jobs.

This report therefore does not indicate the total number of people, or total proportion of the population, who are work services clients.

All percentages shown in tables are rounded to one decimal place. Because of rounding, percentages may not add to 100.0%.

Expenditure information in the report

Expenditure data presented in this report differ from official MSD expenditure data, do not reflect state sector financial reporting conventions, and should not be cited as official MSD expenditure data. These differences arise because of:

·  smoothing of expenditure data presented in Sections 3, 4 and 7. This aims to give figures which are comparable across time, despite changes in operations, policy or accounting practice

·  the treatment of debt established. This is deducted from expenditure figures shown in Sections 2 and 7, but not from expenditure figures in Sections 3 and 4

·  the use in Sections 3 and 4 of expenditure information which has been adjusted to standardised payment periods

·  the inclusion in expenditure data in Sections 3 and 7 of expenditure on selected supplementary benefits.

In this report, the presentation of expenditure information which differs from official MSD expenditure information reflects the aim of showing:

·  the “net gain” to clients from receiving financial assistance paid by Work and Income

·  expenditure series which allow meaningful comparison between points in time, regardless of significant change in both operational policies and accounting conventions.

Official MSD expenditure data is available from the MSD Annual Report.

Treatment of civil unions

MSD service lines treat clients who are in a civil union in the same way as clients who are married or living as married. All references in this report to clients who are married or living as married should be read as including clients who are in a civil union.

Benefits, pensions and hardship assistance

Types of benefits

Benefits are available to people with little or no income, and are paid to enable recipients to meet their living costs and to participate in the community. Two types of benefits can be distinguished:

·  main benefits

·  supplementary benefits.

Main benefits

To be eligible to receive a main benefit, clients must:

·  have insufficient income from all sources to support themselves and any dependants

·  meet the eligibility criteria for that benefit.

The level of income below which a main benefit can be provided depends on the type of benefit applied for and the circumstances of the client. A main benefit may also be work tested.

For information on eligibility for particular main benefits, see Section 3 of this report. See Appendix 1 for additional information about income testing, work testing and client development approaches applied when providing some main benefits.

Main benefits comprise:

·  Unemployment Benefits, Unemployment Benefits – Hardship, Unemployment Benefits – Training, Unemployment Benefits – Hardship – Training, Unemployment Benefits – Hardship – Students, Independent Youth Benefits, and Emergency Benefits

·  Domestic Purposes Benefits – Sole Parents, Domestic Purposes Benefits – Care of Sick or Infirm, Domestic Purposes Benefits – Women Alone, and Emergency Maintenance Allowances

·  Sickness Benefits and Sickness Benefits – Hardship

·  Invalid’s Benefits

·  Widow’s Benefits.

Transitional Retirement Benefits were also main benefits until they were abolished on 1 April 2004.

Payment rates for main benefits

The standard weekly rates of main benefits are increased yearly on 1 April, to reflect change in the Consumers Price Index (CPI) over the previous year. The rates for main benefits current from 1 April 2006 are listed in table 2.1.

Please note that:

·  some clients may receive their main benefit payments fortnightly, at double the rate shown in table 2.1

·  the rates shown in table 2.1 are maximum rates unless stated otherwise (the amount a person actually receives will depend on their income from other sources)

·  where a couple are married or living as married, each partner receives one-half of the main benefit payment (as noted earlier, numbers of main benefit recipients shown in this report include only one partner from each such couple)

·  from 1 April 2005 the child component of main benefits (ie the additional payment for children) was removed from main benefits and included in Family Support (see table 2.2 for current rates of Family Support). This change was part of the Working for Families package.


Table 2.1 Weekly payment rates for main benefits (payable from 1 April 2006)

Main benefit / Status1 / Weekly payment rate2,3
Number of children
None / 1 or more
Unemployment Benefit / Married, each / $144.92 / $144.92
Single 25+ / $173.92
Single 18–24 / $144.92
Single 18–19 (Living at Home) / $115.94
Sole parent / $249.10
Independent Youth Benefit / $144.92
Sickness Benefit granted after 1July1998 / Married, each / $144.92 / $144.92
Single 25+ / $173.92
Single 18–24 / $144.92
Single 18–19 (Living at Home) / $115.94
Sole parent / $249.10
Sickness Benefit granted before 1July19984 / Married, each / $144.92 / $144.92
Single 25+ / $173.92
Single 18–24 / $147.34
Single 18–19 (Living at Home) / $115.94
Sole parent / $249.10
Invalid’s Benefit5 / Married, each / $181.16 / $181.16
Single 18+ / $217.38
Single 16–17 / $175.91
Sole parent / $285.57
Domestic Purposes Benefit5 / Sole Parent / $249.10
Women Alone / $181.16
Domestic Purposes Benefit
– Care of Sick or Infirm5,6 / Single 18+ / $217.38
Single 16–17 / $175.91
Sole parent / $285.57
Half married rate / $181.16
Emergency Maintenance Allowance / Age 16–17 (Living at Home) / $115.94
Age 16–17 (Away from Home) / $249.10
18 or over / $249.10
Widow’s Benefit5 / $181.16 / $249.10

Notes

1  “Married” includes people who are married, living as married, or in a civil union.

2  Rates shown are the net amount set by regulations, and apply from 1 April 2006. Tax at the “M” rate is calculated retrospectively and paid to Inland Revenue.

3  Rates shown exclude Family Support payments. Benefit recipients with dependent children qualify for Family Support, a programme funded by Inland Revenue. See table 2.2 for rates of Family Support.

4  People who have received a Sickness Benefit since before 1 July 1998 receive the old (higher) Sickness Benefit rates.

5  Some recipients are paid weekly, while others are paid fortnightly at double the indicated rates.

6  Only the caregiver receives payment.

Supplementary benefits

Under the Social Security Act 1964, Work and Income delivers supplementary benefits to:

·  people receiving a main benefit or pension

·  other people with low incomes and few assets

·  people with particular needs (eg costs arising from a health issue or a medical condition).

Supplementary benefits are available to assist with accommodation costs, with childcare costs, with health-related or medical-related costs and with meeting some other urgent and essential needs.

Supplementary benefits may be paid on an ongoing basis or as one-off payments. Eligibility for supplementary benefits usually depends on income and assets.

For more information about eligibility for supplementary benefits, see Section 4 of this report.

Payment rates for supplementary benefits

Table 2.2 shows maximum weekly rates for a selection of the main supplementary benefits available. In some cases, the payment actually made may be less than the amount shown. This occurs because the level of supplementary benefit paid depends on the costs incurred by the client, or because other income is taken into account.

Table 2.2 Weekly payment rates for selected supplementary benefits (payable from 1 April 2006)

Supplementary benefit1 / Status / Maximum weekly payment rate2
Accommodation Supplement3 / Living in North and Central Auckland / $225.00
Living in other high cost housing areas4 / $165.00
Living in other main provincial centres5 / $120.00
Living elsewhere in New Zealand / $75.00
Training Incentive Allowance / Maximum weekly rate / $88.20
(Maximum per year $3,528.00)
Disability Allowance / Maximum amount / $51.04
Child Disability Allowance / Fixed rate / $38.46
Childcare Subsidy6 / Maximum amount / $165.50
Unsupported Child’s Benefit and Orphan’s Benefit (per child)7 / Child aged 14 years or over / $133.05
Child aged 10–13 years / $124.24
Child aged 5–9 years / $115.42
Child aged under 5 years / $97.76
Family Support8,9 / First child or only child 15 years or under / $72.00
Second or subsequent child 0–12 years / $47.00
Second or subsequent child 13–15 years / $55.00
First child or only child 16 years and over / $85.00
Second or subsequent child 16 years or over / $75.00

Notes

1  This is a selection of the more common types of supplementary benefits. These benefits may be received in combination with some main benefit or pension, and may also be available to low-income earners.

2  All rates payable from 1 April 2006.

3  Maximum amounts of Accommodation Supplement available are subject to household circumstances and to income and asset tests. Amounts shown are payments per family of three or more people (eg two adults and one child, one adult and two children).

4  Includes South and West Auckland, Wellington, Tauranga, Nelson, Queenstown, Wanaka and Arrowtown.

5  Includes Christchurch, Hamilton, Hastings, Napier, Palmerston North and Rotorua.

6  Maximum amount shown is for the maximum number of subsidised hours (50) at the highest level of subsidy. The actual rate of subsidy received depends on hours subsidised and income.

7  Some recipients are paid weekly, while others are paid fortnightly at double the indicated rates.

8 Administered by Inland Revenue, but payments to Work and Income clients may be made through Work and Income.

9 Payments under this programme are not included in the expenditures reported in this publication. See the Inland Revenue Annual Report for information on expenditures under this programme.