Social Security Amendment Bill (No 3) — Third ReadingText is incorporated into the Bound VolumeSocial Security Amendment Bill (No 3) — Third Reading[Sitting date: 02 April 2015. Volume:704;Page:2885. Text is incorporated into the Bound Volume.]Social Security Amendment Bill (No 3)Third ReadingDebate resumed from 31 March.Hon ANNE TOLLEY (Minister for Social Development):This legislation amends the Social Security Act 1964. The proposed amendments confirm policy intent in several areas by addressing ambiguities and technical errors. Our welfare system delivers assistance to over 1 million New Zealanders each year. It is important that people are treated consistently and as we intended.There is a major and deliberate difference between the support provided to students in tertiary education and the support provided to low and middle income families through the accommodation supplement. The accommodation supplement recognises the housing needs of low to middle income people and assists them with accommodation costs when they are not getting other Government assistance such as income-related rent or student support. The Government provides tertiary students with a package of support for their costs through substantially subsidised fees the student allowance accommodation benefit and access to student loans.A loophole in the Act has meant that some students can get a higher level of accommodation assistance by accessing the accommodation supplement. That is not right. Students should get the assistance designed for them. The adequacy of New Zealand’s student support is completely beyond the scope of this bill. New Zealand students are well provided for. That is right and proper. Having highly educated skilled people is a benefit to the whole country but there is also an individual advantage accruing from tertiary education in terms of the income a person can earn over their lifetime. This is why student support in New Zealand is shared between taxpayers individual students and their families. This bill closes the loophole so that students must use the assistance designed for them and cannot claim the accommodation supplement.It is important that people receiving weekly compensation are treated the same in the welfare system regardless of who pays the compensation. The Social Security Appeal Authority has said that the current wording in the Act does not cover weekly compensation paid under the Accredited Employers Programme. It would be unfair if the benefit system treated an injured worker differently just because the weekly compensation payments were made by an accredited employer rather than ACC. This is not what was intended. Work and Income has always treated all weekly compensation payments in exactly the same manner: a dollar for dollar deduction from benefits.The amendments 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. The change will be backdated to take effect from the July 1999 practice when the wording was first changed to mention ACC as the payer to validate previous practice.The income threshold at which the accommodation supplement starts reducing for non-beneficiary sole parents was raised in the legislation unintentionally as a result of the recent welfare reform changes. The bill resets the income threshold to align the legislation with what was intended and it is backdated to take effect from 15 July 2013 to validate previous practice.Through the welfare reforms the personal earnings exemption intended for people receiving the supported living payment because they are permanently and severely sick injured or disabled has been extended to all supported living payment recipients. The bill returns the personal earnings exemption to those it was intended for and is backdated to take effect from 15 July 2013 to validate previous practice.New Zealand superannuation and main benefits have a residency qualification which requires a person to have lived in New Zealand for a certain period. A person employed overseas but paying New Zealand income tax on their overseas earnings can be considered resident in New Zealand during this period for benefit purposes. This will not change. However the Social Security Appeal Authority has said that the Act allows people to be considered resident and present for benefit purposes during periods of overseas employment even if they did not pay the New Zealand income tax they were liable for on their overseas earnings. The bill clarifies that a person can be considered resident and present for periods of overseas employment only where a person has actually had tax deducted or withheld under New Zealand’s PAYE rules. The change is backdated to take effect from 23 June 1987 to validate previous practice.The changes in this bill will ensure that the welfare system treats people consistently and as intended by the Government. I commend this bill to the House.JAN LOGIE (Green):I rise to speak to the third reading of the Social Security Amendment Bill (No 3). The Greens are opposing this legislation because ultimately it is about making things harder for people who are trying to get ahead through study people on ACC who are also on a benefit and people who are caring for family members who otherwise might be in care. It is also I think another example from this Government of the double-speak attack on the vulnerable where we are presented with a piece of legislation and told that this is purely administrative; it is just a matter of fixing up some unintended consequences and delivering on what the Government intended. Yet when we look into the detail of the legislation we see small but actually very significant changes that in everyday people’s lives will make their lives harder. It is just a reality it seems of this political game that things are played in that way and that the impact of legislation on everyday people is not considered and is not put at the front of this process sadly.This seems also to be another example of the Government prioritising its own budgets over the well-being of the country as a whole. As this is possibly my last contribution before the Christian holiday of Easter I would suggest to the Government that it reflects on the messages of Easter. I do not think you have to be a Christian either to consider these messages valuable. At its heart the Easter story is a story of sacrifice and a story of love for the people. This piece of legislation asks people who really do not have many financial resources to sacrifice a bit more. It takes away their options and asks them to sacrifice more for the sake of this Government’s budget. I do not think that is consistent with the Easter message. This piece of legislation I would suggest shows no love for the people. I would again suggest to this Government that it goes back and reflects on the message of Easter and to those members on that side of the House who will be going to church over the Easter period to reflect on those messages think on this legislation and ask yourselves whether it lives up to those values and that love of the people because I do not believe it does.We are told that this legislation closes a loophole for students who are currently eligible for a student allowance but who choose not to apply for it because the accommodation supplement will offer them a higher income. This legislation removes that option and prevents these students from applying for the accommodation supplement. In real terms it prevents them from accessing a higher income. The Green Party wants a well-educated and well-paid society. To get this we know we have to offer enough financial support to students who do not have other means to be able to complete their studies. This is essential support for social mobility. If we are serious about addressing inequality we need to be doing more—not less—to support people on lower incomes to get through tertiary education to get higher qualifications and to be able to get ahead in life.The New Zealand University Students’ Association estimates that as many as one in six students would be better off turning down the student allowance and applying for the accommodation supplement instead. If you live in Auckland are on a low income and pay the average student rent of $220 a week then you would be entitled to a $118 per week accommodation supplement. Almost one-quarter of all students getting an allowance in Auckland receive less than that in total. We are told it is just fixing things up and making the legislation consistent but in real terms it is taking away an option for financial support from students and from families without much in the way of money to be able to support themselves. We do not support that.Another element of this misnamed Social Security Amendment Bill (No 3) is the changes that will result in someone who has been on a benefit while working part-time suddenly having their benefit reduced to zero after having an injury that entitles them to access ACC. I am sure people in this House get letters from people struggling between Work and Income and ACC and the difficulty of that situation. This legislation is just about to make that harder. You are going to get more letters and it is because people are going to be struggling more because of this legislation named the Social Security Amendment Bill (No 3).Another aspect of this bill is supposedly to clarify that the $20 personal earnings exemption which is currently accessible for people caring full time for people who would probably otherwise be in care will no longer be accessible to them. How extraordinary is it that on the eve of Easter when so many people are focusing on the story of love for the people and sacrifice this Government would pass a bill that takes away a $20 personal earnings exemption from people who have pretty much given up their opportunities to work full time who have subjected themselves pretty much assuredly to a low income because they want to care for a family member who is incapacitated? To me that is just mean—and I have been saying this too often in this House. This change has been brought in as a Supplementary Order Paper so it has not been through consultation it has not been to a select committee and those families have not been able to tell this House or Parliament or the country what they think about this change. This is after this House under urgency in response to the Budget took away the rights of people caring for family members to be able to be paid a minimum wage after the courts had ruled that they were entitled to be paid.We are starting to see a pattern here and it is a pattern of taking people for granted—of exploiting them I would say. Here we are again on the eve of Easter a Christian holiday of love and sacrifice just embedding the exploitation of people who are caring for the most vulnerable in our country. I think it is a sad day to be in this House. The Green Party does not support this misnamed bill.DARROCH BALL (NZ First):I rise on behalf of New Zealand First to once again oppose this bill. We actually share the same sentiments as the Green Party in so far as we understand that this bill is designed to sort out some loopholes but it is the ramifications and downstream effects of those loopholes that we are concerned about. What is ultimately concerning as well is the fact that the National Government is ignoring the fact that those ramifications and downstream effects are actually having real effects on people. In this particular case the clause I am talking about will affect students in particular.I have been in this seat for only about 6 months but this bill has surprised me on a number of levels. Firstly there is the fact that its first reading came through in 2011 and it has taken this long to get through to the third reading. But the second reading the Committee stage and the third reading took only a couple of weeks. Not only that but the Supplementary Order Papers that were put in were very recent. In fact the Supplementary Order Papers were larger than the bill itself. Logic dictates that with such large Supplementary Order Papers affecting the original bill the bill should have gone back to the Social Services Committee but it did not.We heard on Tuesday when this was being rushed through by the Government that the first speaker who was the Minister for Social Development took 45 seconds in the first speech. That reeks to me of trying to push this bill through very quickly with little or no fuss and with total ignorance of the effects downstream. That is what New Zealand First cares about and it is why we are opposing this bill.What is also surprising and interesting to me is the fact that Labour is supporting this bill too. In fact during every speech that Labour members make when they stand up they say the exact same things on that same clause that New Zealand First members say but they are deciding to support this bill. We have got submissions from the New Zealand Union of Students’ Association which is opposing this bill. It is very surprising to me that Labour wants to support it. However like I said we agree that the principal legislation does need to have the loopholes tied—that is the intent of this bill—but if we are looking at the student allowance and the accommodation clause there are real concerns for New Zealand First.The Minister during the first speech in the second reading used the word “equitable”—as have National backbenchers in every speech since. Being equitable is definitely a matter of perspective. I have an analogy that I want to use here for the benefit of the National Party. If we have got 100 people in the deep Pacific right in the middle of the Pacific who are keeping their heads above water and only a few of them have life jackets it would be equitable for all of those 100 people if we took those life jackets away from the few. That would be equitable but is that the right thing to do? Is that fair? What the Government is doing at the moment is proposing—and it looks like it will go through—to take away the life jackets of students who are just keeping their heads above water trying to survive and trying to get the basic necessities in life. That is why New Zealand First is not happy with the effects downstream and that is why we are not going to support this bill.I would like to remind the House that there were only two submissions. Both of them were against the specific clause I am talking about. These are the words of those students who are keeping their heads above water. This is a submission from the New Zealand Union of Students’ Association and might I remind the House that it represents 14 universities and polytechnics including Auckland Massey and Otago. This is the very first sentence that it has in its submission in its general statement: “NZUSA is opposed to the changes proposed to students’ access to accommodation costs support in the Social Security Amendment Bill (No 3).” That is the very first sentence that it has.It goes on to say: “These days student rents are high and rising student employment is much scarcer and particularly in the larger cities where many tertiary institutions are situated.” This submission was put forward in 2011. You can imagine what it is now. It also says: “[the] NZUSA rejects the assertion in the Regulatory Impact Statement that implies that students are not low to middle income earners.”—whereas in fact they are.This is the most disappointing part of the submission that the New Zealand Union of Students’ Association put forward: “It is disappointing to note the Ministry of Social Development undertook no consultation with either students or student representatives and advocates when exploring this proposal. This appears to be driven by cost-saving measures rather than a genuine concern for quality engagement with stakeholders or in upholding the principles of consistency and fairness.” So the Government is standing up there with all its rhetoric about equitability and fairness for all students and here are the students themselves—the ones who are being affected by the legislation that the Government is putting through—saying that is it not equitable; it is not fair. They are getting the raw deal.Bringing this into real terms is an article in the New Zealand Herald dated Monday 30 March—just this Monday. It says that renters are paying up to $60 more a week—this is in Auckland. Areas of Auckland are up 13 percent. Some areas are up 10 percent for a two-bedroom house—costing $531 a week. Across Auckland City costs are growing by an average of between 3 and 6 percent. People are finding it hard to get homes and the next option is to look for somewhere else to rent. So what this article is saying is that—especially in Auckland where we have got one of the largest universities—we are making it harder for students to afford to rent.Here is the kicker. The New Zealand Union of Students’ Association put out a poster on 1 April. It stated that on 1 April students received a 90c—90c—increase to their weekly loan or allowance payment. Average rents are skyrocketing—in Auckland by over $8 in Hamilton by over $3 in Wellington by over $11 and elsewhere by similar figures. So where is the fairness in that? Where is the equitability in that? Where is the brighter future for these students that this Government has promised them for the last 6 or 7 years?Bringing it back specifically to the bill I want to look at the regulatory impact statement. In Part B paragraph 38 it states: “The government provides assistance for full-time students through allowances and loans. Underpinning the design of this assistance is the fact that returns from tertiary education accrue to both the individual and the nation”. So the allowance that students are currently getting already accommodates for the accommodation allowance. What this is pointing out is that first of all rents are skyrocketing but students are getting a 90c increase per week for their accommodation allowance. So where is the fair share from the Government? This legislation is changing the ability for these students to be able to afford to study and to better their futures.Lastly what I would like to say is that there is nothing wrong with expecting students to work part-time and supplement their allowances and their income—to work their way through university. I had to do it a lot of people in here had to do it and a lot of students are doing it currently. New Zealand First considers students to be the future of our country. We need to ensure that we invest in our students and not see them as an expense. They are quite literally low-income earners. We need to give them the most support possible and not ensure that they get the least amount available. That is why New Zealand First opposes this bill.LOUISA WALL (Labour—Manurewa):Kia ora Mr Deputy Speaker. Thank you very much for the opportunity to contribute to this third reading debate on the Social Security Amendment Bill (No 3). I do note that Labour does support this legislation and we do so because the bill has two primary purposes the first of which is to ensure that those receiving ACC payments from their employer are treated the same as those receiving ACC payments from ACC itself and we believe in equal treatment.I do have some questions however around the second aim of the bill which is to correct and I quote from the Bills Digest “an inconsistency between policy and legislation as set out in Section 61EA of the Social Security Act 1964 which has the unintended effect of giving access to Accommodation Supplement to some full-time students when the policy intent is that financial assistance for students is provided under the Student Allowances Regulations 1998 and the Student Loan Scheme.” The interesting thing about section 61EA which is entitled “Accommodation supplement” is that subsection 4 says: “No person shall be granted an accommodation supplement if that person (a) is receiving a basic grant or an independent circumstances grant under the Student Allowances Regulations 1998;”. So essentially it is saying that if you are receiving a student allowance you cannot additionally receive an accommodation supplement. But it does not say that you do not have the right to choose—that as a low-income person you do not have the right to choose whether or not you want a student allowance or want to receive the accommodation supplement as a low-income person. So fair enough that you cannot get both but actually what is the issue about choosing the one that best suits your circumstances?The regulatory impact statement highlighted that this whole legislation was designed because there was a loophole and it was inequitable for the loophole to be left and for different payment levels to be available. Well the definition of “inequitable” is that it is unfair and unjust. I actually cannot see what is so unfair and unjust about a person deciding whether they want to apply to Work and Income as a low-income citizen of our country or as a student citizen of our country.I want to highlight also the research that the New Zealand Union of Students’ Associations did. On 10 September 2014 it highlighted that one in six students would actually be better off not receiving student allowances. They would be better off being a low-income person and receiving an accommodation supplement. That totals about 13500 students because we have approximately 82000 students receiving student allowances in our country. So the relevance from their point of view is that if they are living in Auckland for 23.1 percent of the students receiving a student allowance it would be better if they did not. It would be better if they got a low-income accommodation supplement. If you are a student in Wellington for 16.2 percent of you again rather than getting a student allowance it would be better if you were a low-income person and you received an accommodation allowance. If you were in Hamilton or Christchurch 14.3 percent of you would be better off to receive an accommodation supplement. So if we look at the principles that this piece of legislation is built on—those of what is equal what is equitable what is fair what is just—actually it seems pretty unjust that students do not get to choose based on their circumstances.What I also want to highlight is that the Social Services Committee made a very interesting I believe comment in its report. What it acknowledges is that the two submissions that it did receive which were about student allowances said that allowances were inequitable and they were inadequate—but to quote from its report the committee felt that “this bill would not be an appropriate vehicle to make significant changes to the assistance levels provided to students.” I think it is incredibly profound of the select committee to actually put that in its report because I believe there is an acknowledgement from the members of that select committee that our students are actually being hard-done-by and that something has to change. I guess my challenge to the Minister for Social Development is: if it is not this bill if this bill is only going to correct that anomaly then what is the bill that is going to meet the needs of our students to make sure that they are studying in a supported environment? Students who are having to work 30 to 40 hours a week in order to continue to pass their courses and actually achieve the qualifications that we need as a country to move forward—what is the National Government going to do to address that situation? Kia ora.A party votewas called for on the questionThat the Social Security Amendment Bill (No 3) be now read a third time.Ayes 95New Zealand National 59; New Zealand Labour 32; Māori Party 2; ACT New Zealand 1; United Future 1.Noes 25Green Party 14; New Zealand First 11.Bill read a third time.