Maharey Steve: Social Security (Social Assistance) Amendment Bill — First Reading 
Maharey Steve: Social Security (Social Assistance) Amendment Bill — First Reading 
[Volume:620;Page:15803] 
Hon STEVE MAHAREY (Minister for Social Development and Employment) 
: 
 I move  
That the Social Security (Social Assistance) Amendment Bill be now read a first time. 
 At the appropriate time I will move that the bill be referred to the Social Services Committee. The bill makes three significant changes to the Social Security Act. It does so in the following ways. Firstly it extends the eligibility for the accommodation supplement to residents of retirement villages who have “licence to occupy” tenure. Secondly it ensures that benefit applicants who work for part of the year such as seasonal workers are not financially disadvantaged by enabling them to elect a 52 or 26-week income assessment period for the calculation of their stand-down period. Thirdly it makes changes to the regime that encourages sole parents to establish paternity for children and apply for child support. 
Let me go through those three changes one by one. The bill extends eligibility for the accommodation supplement to residents of retirement villages who have a “licence to occupy” tenure and who meet other qualifying criteria including an income and cash asset test. This change ensures that people with a “licence to occupy” tenure are treated consistently in terms of access to financial assistance. It addresses a financial barrier facing older retired people on low incomes with limited cash assets and high accommodation costs who want to continue to live independently. The Working for Families package substantially addressed housing affordability pressures by increasing the maximum level of accommodation supplement in some areas and by making it available to more people. The amendment in this bill also assists people on low incomes with their housing costs. From 1 July 2005 it is expected that 200 to 300 retirement village residents will qualify for an accommodation supplement of on average between $37 and $54 a week. I imagine that that step will be applauded by the House. 
Secondly the bill changes benefit stand-down rules to improve incentives for people on a benefit to undertake seasonal work and other short-term employment. Currently a stand-down period of between 1 week and 10 weeks applies to most new applicants before their benefit commences. The stand-down period is calculated on the applicant’s income in the 26 weeks before becoming entitled to the benefit and the number of children in his or her care. But from 1 May 2005 benefit applicants will be able to elect a 26-week or 52-week income assessment period for the calculation of their stand-down period. At the moment some seasonal workers who work for part of the year can be disadvantaged by the 26-week assessment period. Although they may have earned a reasonable income over a short period if before they had a job they had a low income their annual income position will become lower. This change will benefit approximately 4500 benefit applicants a year by reducing the length of their initial stand-down period. This will reduce disincentives for people to undertake seasonal work and may also reduce the need for recoverable assistance. I am sure that the entire House will applaud that change. 
 I should stress that this Government has been extremely successful in the area of employment and unemployment and we are very keen to remove every single barrier we can to people going to work so we can also ensure that work pays. That measure will help. 
Thirdly as part of a broader package of initiatives this bill also puts into effect changes to the regime that encourages sole parents to establish paternity for their children and apply for child support. People bringing up children on their own are not uncommon in New Zealand. At the last census one-parent families made up around 29 percent of all families with dependent children; over double the number recorded in 1981. For these families the State will step in to help them financially when they cannot financially support themselves. However in doing so the State also expects the other parent to contribute to the costs of the child. It is not unreasonable to expect that single parents bringing up children on their own identify who in law is the other parent or to expect that they seek financial support for the child from the other parent. It is not unreasonable to penalise financially those who do not. It is not a new philosophy. 
Before the domestic purposes benefit and after its introduction in 1973 single-parent beneficiaries were financially penalised unless they sought financial support for the child where appropriate from the other parent. What is unreasonable is a parent not providing anything towards the cost of his or her child. I am sure that the approximately 93500 parents who are required to pay child support because the other parent of the child is on a benefit would agree. We actively encourage single-parent beneficiaries to name the other parent in law and apply for child support and the majority do so. Some do not and these people face a $22 a week penalty and miss out on that income. 
This Government is letting sole parents know the personal financial cost of their decision. We are ensuring that this group has full information about paternity and child support. We are sending out field officers to every one of these sole parents. All evidence shows that given the right information in the right environment sole parents will usually reconsider their decision not to name the other parent or apply for child support and our policies are having effect. When we came into office the number of sole parents penalised because they had not named the other parent or applied for child support had increased by over 40 percent since 1993. They were increasing at a rate of 1000 a year and that trend was not abating. We also found around 1500 people who had not met their obligations and whose benefits should have been reduced. However between March 2003 and March 2004 the number of beneficiaries receiving a penalty because they had not named the other parent in law or applied for child support increased by only around 200—down from the 1500 we found that the other Government had done nothing about. 
In this sense the bill is building on our successes. The $22 penalty per child has not been adjusted since 1993. From 1 July 2001 the Government will increase the penalty where 3 months have passed since the sole parent had the penalty imposed. During this period sole-parent beneficiaries will be given a reasonable opportunity to reconsider their decision. If they still refuse to comply with their obligations their benefit will reduce by an additional $6 a week per beneficiary not per child—that is per household. That additional $6 reduction will continue to apply until beneficiaries have met all their obligations. 
Some people will think we are being too tough some people will think we are being too soft but we think we have it about right. We will also ensure that there are exemptions where sole parents can prove such things as violence against them or their children or it is proper that they are able to be exempted because they are refugees asylum seekers or have parents who are overseas. Those kinds of conditions will allow people to seek a proper exemption. There are special circumstances where this needs to apply but I stress that this is working. It is working because we have begun talking with these beneficiaries and they have responded well to it. After a long period of time when nothing was done about this by previous Governments when the increase in the number of people in this situation was rising 40 percent over a period of 7 years this Government as usual has stepped in to do something sensible about the issue. I commend this bill to the House.