As a follow-up to the benefit opinion piece Capsule recently ran, we chat to Ben Hoffman, a lawyer who specialises in the benefit system, about why the system is so hard to navigate and understand, even by those who are implementing the rules.
Capsule recently ran an opinion piece about my own experience being turned down for the benefit after losing my job, because I was in a relationship. We got a lot of feedback that can be summed up in two halves: first, “you’re wrong, that’s not how the benefit system works” and second, “you’re right, and this exact same thing happened to me/my sister/my friend, etc.” Anecdotally, the ones that reached out to us fell into two camps: people living with disabilities and solo parents. And all were women.
“It is not a mistake. It is a deliberate hole designed into the system.”
The ‘de-facto relationship blocking you from the benefit’ factor seems, from all the emails or DMs or threads we received from our story, incredibly and upsettingly complex, hard to navigate and common. Like most things, I suspected the reality of ‘You’re wrong/You’re right’ lay somewhere in the middle, so I reached out to an expert for some help. What I found was, to say the least, fascinating and distressing.
Enter our expert, Ben Hoffman, a lawyer who specialises in the benefit system, or as he says, “moves in the murky world of the benno wars.” He kindly agreed to help explain the workings of this problem to Capsule so we could help shine a light on why this is such an ongoing problem for thousands of Kiwis.
The problem, he explained, begins with the law, which goes back to the first Social Security Act passed in 1938 (now 84 years ago). Ben says the treatment of a person needing support as a couple – and not an individual – is a deliberate political creation.
“It is not a mistake,” he says. “It is a deliberate hole designed into the system since, ironically, the first Labour Government. They decided entitlement was to be fully means-tested against the spouse or partner. It goes so much to the heart of our social security system, no government since has dared revisit it. Now it has become one of so many problems; there’s an idea of ‘where do you even start?’ so it just gets kicked down the road.”
It gets even murkier, because one of the stickiest bits is: what counts as a relationship for benefit entitlement? “The legal criteria for a relationship for a benefit is fundamentally different than, say, the Property Relationships Act,” says Ben. “Again, this difference is deliberate but in this case, it’s a good thing. The problem is it’s not well understood by people needing help or MSD [Ministry of Social Development] staff. It’s horribly, misleadingly communicated and badly administered.”
“I am one of about three lawyers in New Zealand who specialise in the benefit system.”
In 1996, two trail-blazing South Auckland community lawyers (former Children’s Commissioner and Judge, Andrew Becroft and Paddy Driscoll) plus two barristers (Denise Bates QC and Frances Joychild QC) took MSD’s predecessor, the Department of Social Welfare, to the Court of Appeal about the criteria for a relationship in regard to the benefit. A South Auckland single mum had been convicted of ripping off the DPB (sole parent benefit) for allegedly being in a relationship with a man who was abusive and never supported her financially.
The Court of Appeal said for a relationship to be one “in the nature of marriage” (the words the Social Security Act uses) it must have two features (criteria). “Most important is an assumption of financial responsibility,” Ben says. “The two people must be willing to step up and support each other – more than just splitting the bills like flatmates – if needed. If the person needing support can’t look to the other party because they’re not that committed, they then should be able to look to the social security system.”
The second thing a relationship requires is “a genuine emotional commitment for the foreseeable future, coming together like a married couple would, just without the marriage,” Ben says. “Not simply being ‘boyfriend and girlfriend’ or staying out of fear because he is abusive.”
“I’d say once people have seen ‘de-facto,’ they don’t really look past that.”
So, in theory, those two criteria sound simple enough, right? No. “MSD is bloody horrible at, as we lawyers say, correctly applying the legal test; figuring out if the relationship is ‘one in the nature of marriage,’” Ben says. “They’ve been bad at it for years. They got chewed up good about it in the early 2000s but it’s still a huge problem.”
Ben first takes aim at how MSD tries to explain the relationship criteria to the public. “It’s horribly misleading.” he says. “It talks about a ‘de-facto relationship,’ which is a Property Relationships Act thing, and is vastly different. So, that trips people up at the start. It does tell people about the two required criteria but I’d say once people have seen ‘de-facto,’ they don’t really look past that.”
“Second, it asks people to see if their relationship ‘includes some of …’ then lists things like living together, socialising together, sharing bills or having sex. These come from two earlier cases called Excell and Thompson and, at the time, the court cautioned the list is not a ‘tick the box’ exercise. But the way MSD words it, it reads like the test IS tick-the-boxes, where if your relationship includes ‘some of [those] things,’ then it counts as a relationship. That is not true at all, it’s fundamentally legally wrong and very misleading.”
As if that wasn’t bad enough, MSD tells people to contact them if they need help figuring out if they are in a relationship. The problem? Ben says MSD staff are not as well-trained to understand the criteria or how to tease out if an individual’s situation meets them.
“Determining relationship status is really complex. They’re not lawyers. Their staff guidelines have about three pages on it, and they’re poorly written. I haven’t really seen staff use them; they just accept the person declaring they are in a relationship and do not check. Or they ask something like ‘oh, so you share money? ok, and there’s some commitment between you? Oh, ok so you’re in a relationship…’”
Ben lists examples of several relationship decisions he had fixed, resulting in significant back payment or debt-write off for the person. “Sadly though,” he says, “I can only see the people who come to me, many don’t.”
Very, very few people ever challenge an MSD decision. “Latest data shows only 0.05% of people formally dispute an MSD decision, and that is just the first stage, internal to MSD,” Ben says. “These are vulnerable, powerless, information-deprived and often afraid people or they think whatever ‘the government’ tells them must be right. Sometimes it will be, absolutely. But often, it is not, and it’s not something people really question.”
“[2020] is really the only time that anyone has cared, when it’s affected them.”
For example, over the last 10 years, Ben says, something like eight relationship disputes went to the second stage of disputing a MSD decision: the independent Social Security Tribunal (Appeal Authority) where MSD is properly held legally accountable by a judicial body.
Ben says one of the biggest problems is there are so few people who specialise in helping with benefit issues, especially lawyers. “I am one of about three lawyers in New Zealand who specialise in the benefit system. There are a few non-lawyer advocates left too, but not many, and not all have comprehensive knowledge. The days of a really strong benefit rights movement in the 1990s and early to mid-2000s are nearly all gone. It’s heartbreaking.”
“This is one of the largest government agencies, administering really complex law, making decisions that hugely affect people, and there are really only a couple of people around on the other side for the whole country. From a constitutional perspective about the rule of law and access to justice, it’s really worrying.”
“There’s so little money in helping beneficiaries. Some Legal Aid is available, as is a small amount from MSD, but that wouldn’t even pay one person part-time. It’s legally dubious whether we can charge even the few who can afford to pay and unlike ACC, the Social Security Act doesn’t allow us to get costs for helping someone before getting to the tribunal, so we basically must do it for free and nobody can sustain that.”
Mainstream critique of the benefit system got a rare moment in the spotlight in early 2020 when the Covid-19 redundancies started and, for the first time, being able to access the benefit became a white, middle-class problem.
“Help for the poor is not exactly a vote winner so it’s not really something that comes up.”
“That’s really the only time that anyone has cared, when it’s affected them,” Ben says. “Before that, it was only something that affected ‘poor people’ and you know, the prevailing attitude in the public is ‘they should just be bloody grateful and why haven’t they got a job yet?’ Help for the poor is not exactly a vote winner so it’s not really something that comes up, plus, I don’t think politicians have any idea of half the inequitable or absurd stuff in the benefit law anyway.”
So, what has happened? The Labour Government campaigning on a comprehensive welfare overhaul in 2017, and ran a detailed report from the Welfare Expert Advisory Group in 2019. There have been many positive updates: weekly benefit increases for all adults, increases to income limits for hardship assistance and a focus on how an increase in welfare support will lift an estimated 19-33,000 kids out of poverty.
A spokesperson says there are plans to review the settings that underpin financial assistance and eligibility – including the relationships definition. So what is a possible answer to the relationship means testing problem? Ben says “the individual entitlement social insurance being introduced will go a fair way to solving it. For others, a sensible middle-ground would be to disregard the average wage of the spouse or partner.”
At the moment, someone loses entitlement to Jobseeker Support once their spouse or partner has $48,152 income ($50,388 with children). For Supported Living Payment (formerly Invalids Benefit), it is slightly better; $56,309 ($58,538 with children). “You can’t expect a spouse or partner to assume total responsibility for the other using such modest sums” says Ben, “which is what the state is asking. Exempting the average wage of the other really is a sensible compromise. Now, if a fearless government of the day wants to fully individualise it, even better, but I doubt it will happen.”
And what about finding a solution to the MSD properly assessing relationships? “Aside from better training and oversight of MSD staff, that requires a much better system to challenge decisions than what we have now, including a sustainable pool of skilled and accessible lawyers and good advocates. We don’t have either and both require legislative reform and significant money. Whether it will happen is up to the politicians.”
