Bennett Paula: Social Security Amendment Bill (No 3) — First Reading 
Bennett Paula: Social Security Amendment Bill (No 3) — First Reading 
[Volume:671;Page:17808] 
Hon PAULA BENNETT (Minister for Social Development and Employment) 
: 
 I move  
That the Social Security Amendment Bill (No 3) be now read a first time. 
 At the appropriate time I will move that the bill be referred to the Social Services Committee that the committee report back to the House on or before 31 May 2011 and that the committee have the authority to meet at any time that the House is sitting except during oral questions and during any evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 187 and 190(1)(b) and (c). 
This bill is about fairness. I am proposing these changes to ensure that people in similar circumstances are treated the same. Two areas of the Social Security Act need changing. They are the treatment of weekly compensation and accommodation assistance for students. This bill makes the legislation clearer so that we treat people consistently. 
It is important that people receiving weekly compensation are treated the same regardless of who pays the compensation. Weekly compensation is paid when people cannot work because of an injury covered by the accident compensation scheme. The Social Security Act sets out how the payments are treated when injured persons or their partners claim a benefit. A recent Social Security Appeal Authority decision made it clear that the current wording in the Act does not cover weekly compensation paid under the accredited employer scheme. ACC introduced the scheme to encourage employers to better manage the risks of work-related accidents. The employer gets a reduced levy rate and is responsible for claims where a worker is injured in the workplace. It provides employers with good incentives to minimise the risk of accidents for their workers. 
For workers things are just the same as if they were working for any other employer. They continue to pay the same levy through PAYE and they have the same cover guaranteed under the Accident Compensation Act. If the accredited employer fails to make the compensation payments ACC steps in to pay the injured worker. That could happen where the employer became insolvent for example. It would be very unfair if the benefit system treated the injured worker differently just because the weekly compensation payments were made by an accredited employer rather than by ACC. The amendments set out in this bill will ensure that payments of weekly compensation continue to be treated the same whether paid by ACC or by an accredited employer—or for that matter by someone else acting on behalf of ACC or an employer. 
Work and Income already treats all of these payments the same. The changes set out in the bill confirm the current and past practice. They will be backdated to take effect from July 1999. That is the time when the wording was first changed to mention the Accident Compensation Corporation as the payer. The decision of the appeal authority though will not be overturned. The bill preserves the position of the person who successfully appealed the treatment of weekly compensation payments by an accredited employer. 
What does the change mean in practice? It affects two current practices: the backdating of benefit applications and the deduction of weekly compensation payments from benefit payments. The usual rule is that Work and Income cannot grant a benefit from a date earlier than the day on which the person applied for it. Backdating a grant is allowed when a person applies for a benefit after they have been getting weekly compensation for some weeks but their ACC claim has just been declined. If the person had known the claim would be denied then they would have applied for a benefit in the first place. The Act allows Work and Income to treat the person as if they were receiving a benefit during those weeks. The backdated benefit is used to offset the payments made by ACC. The bill makes sure that the backdating can apply whether the payments have been made by ACC or by an accredited employer. 
The second impact of the bill is for people who get less in their weekly compensation payments than the benefit rate that they could claim for their family. Those people can in effect have their weekly compensation rate topped up to the right benefit rate. Work and Income pays the benefit after deducting the compensation dollar for dollar so the payments cannot double up; the Crown is not providing twice for loss of income and families are provided with the level of income they need. The bill makes sure that all weekly compensation payments not just those made by the corporation are deducted dollar for dollar from benefit payments. That was and still is the Government’s aim. It would be unfair that a person who receives compensation from an accredited employer would be better off than a person who received the same amount of weekly compensation from ACC. That simply would not be fair and they should be treated the same. 
I now turn to how the bill affects students who need help with their accommodation costs. The Government provides assistance for full-time students through allowances and loans. That assistance is designed taking into account the fact that both the individual and the nation benefit from tertiary education. There is a shared approach to assistance with the Government students and their parents contributing resources. This has helped support our high levels of participation in tertiary education and it is a sensible approach. The accommodation supplement assists low to middle income people with accommodation costs when they are not getting other Government assistance such as income-related rent or a student allowance. 
A few students have worked out that they might get more by giving up their student allowance and the accommodation benefit that goes with it and claiming the accommodation supplement instead. It is not an easy thing to work out because so many different factors are involved. It depends on their family situation income where they live and their housing costs. The loophole in the Act has meant that students in very similar circumstances can end up getting quite different levels of accommodation assistance. That simply is not right. Students should get the assistance designed for them. The bill closes a loophole so that students cannot use it to claim an accommodation supplement. These are fair and reasonable changes and I commend this bill to the House.